Production and cost — Economics STD 12 Humanities & Commerce — Question

Explain any two functions of money.

Define fixed cost. Give an example. Explain with reason the behaviour of Average Fixed Cost as output is increased.

Differentiate between decrease in supply and contraction in supply (decrease in quantity supplied).

Explain the feature of few firms in an oligopoly market.

A consumer spends ₹ 400 on a good priced at ₹ 8 per unit. When its price rises by 25 percent, the consumer spends ₹ 500 on the good. Calculate the price elasticity of demand by the Percentage method.

Draw Average Variable Cost (AVC), Average Total Cost (ATC) and Marginal Cost (MC) curves in a single diagram. State the relation between MC curve and AVC and ATC curves.

What type of production function is this in which only one input is increased and others kept constant? State the behaviour of total product in this production function.

Giving reasons categorise the following into revenue expenditure and capital expenditure:

1. Subsidies.
2. Grants given to State Governments.
3. Repayment of loans.
4. Construction of school buildings.

Total fixed cost is ₹ 90, complete the following table:

Output (Units)	MC	TC	ATC
1	10	-	-
2	20	-	-
3	15	-	-

Explain the problem of ‘what to produce'. Explain the central problem of “What is produced and in what quantities”.