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

Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.

S.No.	Particulars	Amount (In ₹ crores)
(i)	National Income	71,000
(ii)	Gross Domestic Capital Formation	10,000
(iii)	Government Final Consumption Expenditure	?
(iv)	Mixed Income of Self Employed	?
(v)	Net Factor Income from Abroad	1,000
(vi)	Net Indirect Taxes	2,000
(vii)	Profits	1,200
(viii)	Wages & Salaries	15,000
(ix)	Net Exports	5,000
(x)	Private Final Consumption Expenditure	40,000
(xi)	Consumption of Fixed Capital	3,000
(xii)	Operating Surplus	30,000

Giving reasons, classify the following into fixed costs and variable costs.

1. Wages to the daily wage workers.
2. Salary of the permanent staff.
3. Expenditure on purchase of raw materials.
4. Interest on borrowed capital.
5. Electricity Meter rent.
6. Sales Tax.

How is the equilibrium price determined under perfect competition? Explain with the help of a diagram.

OR

Show the determination of market equilibrium with the help of demand and supply schedules and a diagram.

OR

Explain the process of price determination under perfect competition with the help of a schedule and a diagram.

Market for a good is in equilibrium. There is increase in demand for goods. Explain the chain of effects of this change. Use diagram.###How does an increase in demand of a commodity affect its equilibrium price and equilibrium quantity? Explain with the help of a diagram.###How will equilibrium price and quantity be affected when there is rightward shift of demand curve?### X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.

Explain the income method of estimating national income.

Calculate National Income and Personal Disposable Income:

		(₹ crores)
(i)	Corporation tax	100
(ii)	Private final consumption expenditure	900
(iii)	Personal Income tax	120
(iv)	Government final consumption expenditure	200
(v)	Undistributed profits	50
(vi)	Change in stocks	(-)20
(vii)	Net domestic fixed capital formation	120
(viii)	Net imports	10
(ix)	Net indirect tax	150
(x)	Net factor income from abroad	(-)10
(xi)	Private income	1000

Market of a good is in equilibrium. If the demand for the good 'decreases'. Explain the chain of effects of this change.

C = 100 + 0.4 Y is the consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1100. Calculate.

1. Equilibrium level of National Income.
2. Consumption expenditure at equilibrium level of national income.

Given below is the cost schedule of a firm. Its average fixed cost is it produces 3 units.

Output (Units)	1	2	3
Average Variable Cost(₹)	30	28	32

Calculate its marginal cost and average total cost at each given level of output.

Explain with the help of diagram the effect of the following changes on the demand of a commodity.

1. A rise in the price of a complementary good.
2. A rise in the price of substitute good.