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

Discuss briefly the meaning of "Price discrimination" and "Product differentiation" with example.

How is exchange rate determined in the foreign exchange market? Explain.

Why are the banks required to keep only a fraction of deposits as cash reserves?

What is a budget line? Explain why is it a straight line?

State three features of perfect competition.

Explain the concept of surplus in the balance of payments account.

Net National Product at Factor Cost of a particular country in a year is Rs. 1,900 crores. There are no interest payments made by the households to the firms/ government, or by the firms/ government to the households. The Personal Disposable Income of the households is Rs. 1,200 crores. The personal income taxes paid by them is Rs. 600 crores and the value of retained earnings of the firms and government is valued at Rs. 200 crores. What is the value of transfer payments made by the government and firms to the households?

Give the meaning of normal goods and inferior goods. Give examples in each case.

OR

Explain the difference between an inferior good and a normal good.

Define capital receipts of government. Describe briefly the groups in which these are classified.

State whether the following statements are true or false. Give reasons for your answer.

1. AVC can fall even when MC is rising.
2. The difference between TC and TVC falls with increase in output.
3. As soon as MC starts rising, AVC also starts rising.