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

What happens to the equilibrium price of a commodity when its demand decreases? Show with the help of a diagram.

Define Marginal Rate of Substitution. Explain its behaviour along an indifference curve.

How is foreign exchange rate determined? Use diagram.

Explain the effect of rise in the prices of related goods on the demand for a good

OR

How is the demand for a good affected by a rise in price of other goods? Explain.

Giving reasons, state whether the following statements are true or false.

1. When MPC is zero, the value of investment multiplier will also be zero.
2. Value of Average Propensity to Consume can never be less than zero.

Calculate autonomous consumption expenditure from the following data about an economy which is in equilibrium:

National Income	=	₹ 500
Marginal Propensity to Save	=	0.30
Investment expenditure	=	100

Giving reason, classify the into stock or flow.
Machinery of a firm.

Calculate revenue deficit from the following data:

S. No.	Items	₹(in crore)
(i)	Revenue receipts	50,000
(ii)	Revenue expenditure	60,000

Distinguish between domestic product and national product. When can domestic product be more than national product?

State the conditions for consumer's equilibrium given by the utility approach (in case of one and two commodities).