Non-Competitive Markets — Economics STD 12 Humanities & Commerce — Question

Explain the effect of change in prices of related goods on demand of a given good.

What is investment multiplier? Explain its working using a suitable numerical example.

With the help of suitable example explain the problem of ‘for whom to produce’.

A consumer consumes only two goods. Explain consumer's equilibrium with the help of utility analysis.

Read the passage given below and answer the following questions from 1 to 4.
In the Government of India's budget for the year 2013 - 14, the Finance Minister proposed to raise the Goods and Services Tax (GST) on cigarettes. He also proposed to increase income tax on individual earning more than rupee one crore per annum.

1. Identify the taxes proposed to be increased by the Budget 2013 - 14. The taxes proposed are:

1. Goods and Services tax on cigarettes.
2. Income tax on individuals earning Rs. 1 crore or above.
3. Both [a] and [b]
4. None of the above

2. What was the objective(s) behind the proposals put forth in the Budget 2013 - 14?

1. Revenue generation
2. Social welfare
3. Both [a] and [b]
4. None of these

3. What welfare objective the government wishes to achieve by increasing GST on cigarettes?

1. This will discourage their cigarettes
2. This will encourage their cigarettes
3. Both [a] and [b]
4. None of the above

4. What would be the effect of increase in direct tax on the rich?

1. It will reduce the gap between rich and the poor, thereby reducing inequalities in income
2. It will increase the gap between rich and the poor
3. Both [a] and [b]
4. None of the above

Distinguish between increase in demand and increase in quantity demanded of a good.

What causes change in inventory stock?

The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?

Explain the geometric method of measuring price elasticity of supply. Use diagram.