Introduction — Economics STD 12 Humanities & Commerce — Question

Give reasons for the following statements.

1. If the income of a consumer changes and prices of the two goods remain unchanged, a new budget line will be formed which will be parallel to the original line.
2. If the income of the consumer remains unchanged and if the price of goods X rises, intercept of the budget line of Y-axis will remain the same, but on the X-axis it will shift to the left.

Complete the following table.

Units of labour	0	1	2	3	4	5
Total product	-	-	-	-	-	-
Average product	-	-	-	-	-	-
Marginal product	0	10	12	14	14	12

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

Calculate Personal Income from the following data:

		(Rs. crores)
1	Undistributed profits of corporations.	20
2	Net domestic product accruing to the private sector.	500
3	Corporation tax.	55
4	Net factor income from abroad.	- 10
5	Net current transfers from government.	15
6	National debt interest.	40
7	Net current transfers from the rest of the world.	15

Explain the central problem “what to produce.”

Regulation of prices in the case of agricultural products is not only desirable but necessary. Explain.

Explain ‘large number of buyers and sellers' as a feature of perfectly competitive market.### Explain the implications of large number of buyers in a perfectly competitive market.### Explain the implications of large number of sellers in a perfectly competitive market.

What is elasticity of demand?

Suppose the price of a good is higher than equilibrium price. Explain the changes that will establish equilibrium price.

State any three functions of money.