MICROECONOMICS CH : 8 CONCEPTS OF COST — Economics STD 11 Commerce — Question

Calculate total variable cost and total cost from the following cost schedule of a firm whose fixed costs are ₹10:

Output (Units)	1	2	3	4
Marginal Cost (₹)	6	5	4	6

Read the following case study carefully and answer the questions 1-2 on the basis of the same:
The elasticity of demand is great for high prices, and great, or at least considerable, for medium prices; but it declines as the price falls; and gradually fades away if the fall goes so far that satiety level is reached. Water is one of the few things the consumption of which we are able to observe at all prices, from the very highest down to nothing at all. At moderate prices the demand for it is very elastic. But the uses to which it can be put are capable of being completely filled: and as its price sinks towards zero the demand for it loses its elasticity. Nearly the same may be said of salt. Its price in England is so low that the demand for it as an article of food is very inelastic: but in India the price is comparatively high and the demand is comparatively elastic.
1. From a point of intersection of the two demand curves, a flatter demand curve shows higher elasticity of demand. Do you agree?
2. Higher the price level, higher should be the elasticity of demand. Comment.

Explain whether marginal cost can increase when average cost decreases.

30 families in an area spend the following monthly expenditure on food:
115, 159, 196, 205, 212, 223, 256, 271, 310, 129, 335, 169, 184, 234, 245, 241, 265, 298, 144, 135, 172, 173, 229, 220, 238, 278, 243, 220, 238, 238.

1. Prepare a frequency distribution with the class interval of.

100 - 150, 150 – 200, 200 – 250, 250 – 300, 300 – 350.

2. Find the number of families whose monthly expenditure on food is.

1. less than ₹ 250
2. more tha ₹ 300
3. between ₹ 200 and ₹ 300

Differentiate between inclusive and exclusive series.

Give formula for arithmetic mean in individual series by all the methods.

Given the following data:

Item	Base year		Current Year
	Price (₹)	Quntity	Price (₹)	Quntity
A	1	10	2	5
B	1	5	X	2

Distinguish between 'change in supply' and 'change in quantity supplied' of a commodity. Use diagrams. ### Distinguish between movement along the supply curve and shift in supply curve with the help of suitable figures.

What is first quartile? Show it graphically.

Read the following hypothetical information carefully and answer the questions 1-6 on the basis of the same:

Price (₹)	Supply (Units)
1	5
5	10
10	15

1. On the basis of the data given above when price changes from 1 to 5, that situation will be called ______.
(a) extension of supply
(b) contraction of supply
(c) increase in supply
(d) decrease in supply

2. On the basis of your answer of the above question, what will be the shape of new supply curve?
(a) There is upward movement on the same supply curve
(b) There is downward movement on the same supply curve
(c) There is forward shift in supply curve
(d) There is backward shift in supply curve

3. On the basis of the data given above when price changes from ₹ 10 to ₹ 1, that situation will be called ______.
(a) extension of supply
(b) contraction of supply
(c) increase in supply
(d) decrease in supply

4. On the basis of your answer of the above question, what will be the shape of new supply curve?
(a) There is upward movement on the same supply curve
(b) There is downward movement on the same supply curve
(c) There is forward shift in supply curve
(d) There is backward shift in supply curve

5. Read the following statements carefully and choose the correct alternative among those given below:
Statement 1: Increase in supply occurs when more is supplied at the existing price.
Statement 2: Decrease in supply leads to a backward shift in supply curve.
(a) Both the statements are true
(b) Both the statements are false
(c) Statement 1 is true and Statement 2 is false
(d) Statement 2 is true and Statement 1 is false

6. If the producer expects price of the commodity to rise in the near future, current supply of the commodity will reduce. (True or False)