The theory of the firm under perfect competition — Economics STD 12 Humanities & Commerce — Question

Distinguish between

1. Elastic and inelastic demand
2. Perfectly elastic and perfectly inelastic demand.

The price elasticity of demand of a commodity is (-)1.5. When its price falls by ₹ 1 per unit its quantity demanded rises by 3 units. If the quantity demanded before the price change was 30 units, what was the price at this demand?

An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and explicit cost ore from this information. Explain.

Given the price of a good, how does a consumer decide as to how much of that good to buy.

Or

Explain the condition of determining how many units of a good consumer will buy at a given price.

OR

Explain why the price a consumer is willing to pay for a good equals the marginal utility of X when in equilibrium.

OR

Explain why consumer's equilibrium is attained when the utility of a product in terms of money is equal to its price.

At the market price of ₹ 10, a firm supplies 4 units of output. The market price increases to ₹ 30. The price elasticity of the firm's supply is 1.25. What quantity will the firm supply at the new price?

A producer supplies ₹ 200 units of a good at a price of ₹ 10 per unit. Price elasticity of supply is 2. How many units will the producer supply at ₹ 11 per unit.

Define full employment in an economy. Discuss the situation when aggregate demand is more than aggregate supply at full employment income level.

Calculate Net Domestic Product at Factor Cost by the expenditure method and production method.

S.No.	Contents	₹ (in crore)
(i)	Value of Output in Economic Territory	4,100
(ii)	Net Exports	(-)50
(iii)	Intermediate Purchase by Primary Sector	600
(iv)	Private Final Consumption Expenditure	1,450
(v)	Intermediate Purchases by Secondary Sector	700
(vi)	Government Final Consumption Expenditure	400
(vii)	Net Domestic Fixed Capital Formation	200
(viii)	Intermediate Purchases by Tertiary Sector	700
(ix)	Net Change in Stock	(-)50
(x)	Net Indirect Taxes	100
(xi)	Consumption of Fixed Capital	50

What are the reasons or causes for excess demand?

Differentiate between increase in demand and expansion in demand (increase in quantity demanded).