Market Equilibrium — Economics STD 12 Humanities & Commerce — Question

Economists say in consistent things, as price falls, demand rises, but as demand rises, price rises. Defend or refute.

At a price of 40 per unit, the quantity supplied of a commodity is 400 units. When its price falls by 10 percent, its quantity supplied falls by 36 units. Calculate its elasticity of supply. Is its supply elastic?

A consumer spends Rs. 1,000 on a good priced at Rs. 10 per unit. When its price falls by 20 percent, the consumer spends Rs. 800 on the good. Calculate the price elasticity of demand by the Percentage method.

Calculate Total Variable Cost and Marginal Cost from the following cost schedule of a firm whose Total Fixed Costs are Rs.12:

Output (Units)	Total Cost (Rs.)
1	20
2	26
3	31
4	38

What happens when the government fixes the maximum price (or price ceiling) lower than the market equilibrium price for the commodity? Explain with the help of a diagram.###Explain the effects of a 'Price Ceiling'.

Calculate Total Variable Cost and Marginal Cost from the following cost schedule of a firm, whose Total Fixed Costs are ₹ 12:

Output (unit)	1	2	3	4
Marginal Cost (MC) (₹)	20	26	31	38

A consumer spends ₹ 100 on a good priced at ₹ 4 per unit. When its price falls by 25 percent, the consumer spends ₹ 75 on the good. Calculate the price elasticity of demand by the Percentage method.

The value of marginal propensity to consume is 0.6 and initial income in the economy is ₹ 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of ₹ 80 crores.

Explain the effect of technological changes on the supply of a commodity.

What happens to the demand of a good when consumer's income charges? Explain.