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Explain Average Fixed Cost curve.
Concept: Cost - Average Cost
Assertion: A firm is able to sell more quantity of a commodity by reducing its price.
Reason: As it sells additional units of the commodity at a lower price, the firm’s marginal revenue will be less than its average revenue.
Concept: Total, Average and Marginal Revenue
Given that the fixed cost is Rs. 30. Calculate TVC and TC from the following data:
| Output (units) | 0 | 1 | 2 | 3 |
| Marginal Cost | 0 | 10 | 15 | 25 |
Concept: Cost - Marginal Cost
Draw a well labelled diagram to show AFC curves. State the nature of a curve.
Concept: Cost - Average Cost
Answer the following question.
What is meant by production function?
Concept: Production Function
Answer the following question.
Explain the law of variable proportions with the help of a diagram.
Concept: Law of Variable Proportions
Which one of the following is NOT a ceteris paribus assumption of the Law of Supply?
Concept: Law of Variable Proportions
When the Marginal Product turns negative, Total Product will ______.
Concept: Law of Variable Proportions
Why is the AVC curve U-shaped?
Concept: Law of Variable Proportions
At the point of inflexion, ______ is maximum.
Concept: Law of Variable Proportions
With the help of a diagram, explain the relationship between Average Product and Total Product under the Law of Variable Proportions.
Concept: Law of Variable Proportions
Study the data given below and identify the laws followed in the production of A and B depicted in the Table I and Table II. Justify your answer with a reason for each.
| Table I | Table II | ||||
| Machines | Labour | Output of A (units) | Machines | Labour | Output of B (units) |
| 5 | 10 | 1000 | 5 | 10 | 400 |
| 5 | 11 | 1150 | 10 | 20 | 800 |
| 5 | 12 | 1310 | 15 | 30 | 1200 |
Concept: Law of Variable Proportions
Normal profits for a firm imply that the firm is breaking even. Explain.
Concept: Concept of Production
What are Average product?
Concept: Law of Variable Proportions
What are Marginal product?
Concept: Law of Variable Proportions
With the help of a suitable diagram, discuss the relationship between Average product and Marginal Product.
Concept: Law of Variable Proportions
Which stage of the Law of Variable proportions will be the best for the producer? Explain with a reason.
Concept: Law of Variable Proportions
Medium of exchange and measure of value is ______.
Concept: Functions of Money > Primary Function
With reference to money, which one of the following statements is correct?
Concept: Meaning of Money
Read the passage given below and answer the questions that follow.
| A change in the rupee-dollar exchange rate represents a change in the external value of the rupee. The value of the rupee, in terms of the dollar, has been falling continuously over a period of time. Since the rupee-dollar exchange rate is determined by the demand for and supply of dollars, it is possible that the value of the rupee will slide further if appropriate measures are not taken. The Reserve Bank of India, in charge of both the internal and external value of the rupee, has repeatedly emphasised maintaining stability in the foreign exchange market. |
- What kind of exchange rate system is being referred to in the passage?
- The value of the rupee, in terms of the dollar, has been falling continuously over a period of time.” Give the economic term for this phenomenon.
- How would this phenomenon affect balance of payments?
- Explain the role of the Reserve Bank of India as custodian of foreign exchange.
- Suggest any two measures to correct adverse balance payments.
Concept: Meaning of Money
