Production and cost — Economics STD 11 Commerce — Question

What do you mean by 'monotonic preferences'?

Explain the concept of an indifference curve. Use diagram.

An individual is both the owner and the manager of the shop taken on rent. Identify the implicit cost and explicit costs from this information. Explain.

Giving reasons, state why the following two conditions must be satisfied when a consumer is in equilibrium.

1. A budget line must be tangent to an indifference curve.
2. Marginal rate of substitution must be diminishing.

In recent times, it has been observed that petrol and diesel price have fallen several times due to changing market conditions. Do you think this will solve the problem of 'what to produce' in developing countries like India?

Give reasons for the following statements.

1. If the income of a consumer changes and prices of the two goods remain unchanged, a new budget line will be formed which will be parallel to the original line.
2. If the income of the consumer remains unchanged and if the price of goods X rises, intercept of the budget line of Y-axis will remain the same, but on the X-axis it will shift to the left.

Calculate MC and TC from the following cost schedule of a firm whose total fixed costs are ₹ 15.

Output (units)	1	2	3	4
TVC (₹)	10	19	29	40

What is budget line?