Theory of consumer behaviour — Economics STD 12 Humanities & Commerce — Question

A consumer buys 14 units of a good at a price of ₹ 8 per unit. At price ₹ 7 per unit he spends ₹ 98 on the good. Calculate price elasticity of demand by the percentage method. Comment upon the shape of demand curve based on this information.

The demand for a good at ₹ 10 per unit is 40 units. Price falls by ₹ 5. If price elasticity of demand is (-) 3, calculate the new quantity demanded.

What is the relationship between total variable cost and marginal cost? Explain.

Distinguish between APS and MPS. The value of which of these two can be negative and when?

If the real GDP is ₹ 500 and Price Index (base = 100) is 125, calculate the Nominal GDP.

Calculate Gross National Product at Factor Cost from the following data by:

1. Income method.
2. Expenditure method.

S.No.	Contents	₹ (in crore)
(i)	Private Final Consumption Expenditure	1,000
(ii)	Net Domestic Capital Formation	200
(iii)	Profits	400
(iv)	Compensation of Employees	800
(v)	Rent	250
(vi)	Government Final Consumption Expenditure	500
(vii)	Consumption of Fixed Capital	60
(viii)	Interest	150
(ix)	NFIA	(-)10
(x)	Net Exports	-20
(xi)	Net Indirect Tax	80

Explain how government budget can be helpful in bringing economic stabilisation in the economy.

Distinguish between decrease in demand and decrease in quantity demanded.

State and discuss the components of Aggregate Demand in a two sector economy.

Explain the effect of change in prices of the related goods on demand for the given good.