MICROECONOMICS CH : 5 THEORY OF DEMAND — Economics STD 11 Commerce — Question

A department store sells stereo systems, television sets and radios. The percentage distribution of the total sales volume (in ₹) is estimated as 30% stereos, 50% televisions and 20% radios. The price of one stereo, one television and one radio in 2009 was ₹ 20,000, ₹ 15,000 and ₹ 500 respectively, while their respective price in 2012 were ₹ 25,000, ₹ 20,000 and ₹ 800.
A weighted price index for 2012 with base 2009 is to be computed.

1. Which index number formula is appropriate? Why?
2. Compute the index.

What do you mean by mode? Where mode is considered as ill-defined?

Calculate coefficient of correlation of the following data by the Product Moment Method:

X	8	6	4	3	4
Y	9	7	4	4	6

Explain the advantages and disadvantages of textual presentation of data.

Explain with the help of a diagram the effect of an increase in demand for a commodity on its equilibrium price and equilibrium quantity.

Price elasticity of demand is found to be (-) 2. Price falls from ₹10 per unit to ₹8 per unit. Find the percentage change in quantity demanded.

Find out TC, given the following information on MC for a firm which has spent ₹50 thousand on its establishment even when output was zero.

Output (Units)	1	2	3	4	5	6	7
MC (₹ thousand)	7	6	5	4	3	2	1

When price of a good rises from ₹5 per unit to ₹6 per unit, its demand falls from 20 units to 10 units. Compare expenditures on the good to determine whether demand is elastic or inelastic.