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

Define budget deficit and trade deficit. The excess of private investment over saving of a country in a particular year was Rs. 2,000 crores. The amount of budget deficit was (–) Rs. 1,500 crores. What was the volume of trade deficit of that country?

Define equilibrium price of a commodity. How is it determined? Explain with the help of a schedule.

Market for a good is in equilibrium. There is decrease in supply for this good. Explain the chain of effects of this change. Use diagram.###Explain the chain effects of decrease in supply of a good on its price, supply and demand.

Distinguish between perfect oligopoly and imperfect oligopoly. Also explain the "interdependence between the firms" feature of oligopoly.

Explain the effect of the following on demand for a good:

1. Rise in income.
2. Rise in prices of related goods.

Explain the problem of ‘excess demand’ in an economy with the help of a diagram. Explain the role of bank rate in correcting it.

Calculate Net Domestic Product at Factor Cost and Private Income:

		(₹ crore)
(i)	Gross National Disposable Income	600
(ii)	Net current transfers to abroad	(–) 20
(iii)	Consumption of fixed capital	60
(iv)	Current transfers from government	30
(v)	Indirect tax	100
(vi)	Income accruing to government	80
(vii)	Subsidies	10
(viii)	Net factor income to abroad	(–) 10
(ix)	National debt interest	40
(x)	Personal tax	150

Complete the following table:

Output units	Total cost Rs.	Average variable cost Rs.	Marginal cost Rs.	Average fixed costRs.
0	30
1	---	---	20	---
2	68	---	---	---
3	84	18	---	---
4	---	---	18	---
5	125	19	---	6

Explain determination of equilibrium level of income using consumption plus investment (C + l) approach. Use diagram.

State the phases of the law of variable proportions in terms of total physical product. Use diagram.