MICROECONOMICS CH : 2 CENTRAL PROBLEMS OF AN ECONOMY — Economics STD 11 Commerce — Question

Do you agree with the view that TP increases even when MP is decreasing?

If IC is not convex at the point of equilibrium, the consumer cannot reach the point of stable equilibrium. Comment.

If demand curve is found to be positively sloped, what it could be due to? Give your answer in terms of nature of the commodity, income effect and substitution effect.

FDI not only brings investment in the domestic economy, it also brings new technology. How would the availability of new technology (relating to auto industry) impact the short period production function of a car manufacturer in India?

Utility Analysis studies consumer's equilibrium on the assumption that utility can be expressed in terms of units like 2, 4, 6. Indifference Curve Analysis, on the other hand, assumes that utility cannot be expressed in terms of units; it can at best be compared. Does it mean that consumer's equilibrium (in terms of the consumption of goods X and Y) should be different, using different assumptions?

What is the relation between Good-X and Good-Y, if with rise in the price of Good-X, demand for Good-Y rises? Give an example.

What do you mean by an 'inferior good'? Give some examples.

Explain how scarcity and choice go together.

If power tariff is lowered during off-peak hours, do you think the problem of load-shedding for household consumption can be solved to some extent? Use the concept of elasticity of demand.

Firm's demand curve as a horizontal straight line under perfect competition shows that an individual producer has no control over price of his product.' Defend or refute the given statement.