MICROECONOMICS CH : 8 CONCEPTS OF COST — Economics STD 11 Commerce — Question

"Discovery of natural gas in the international market leads to a cut in the petrol and diesel prices." Explain the economic theory to analyse the impact of the statement on the cost of production of the transport firms in India. Also analyse its impact on the cost of transportation.

Explain market equilibrium.

What is the relation between market price and average revenue of a price taking firm?

Can TP ever fall when more and more of the variable factor is combined with the fixed factor?

"Petrol is becoming cheaper, yet the demand for cars is not rising."
Does it mean that the law of demand is not operative?

Suppose a consumer can afford to buy 6 units of Good-1 and 8 units of Good-2, if she spends her entire income. The prices of the two goods are ₹6 and ₹8 respectively. How much is the consumer's income?

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?

How do the equilibrium price and quantity of a commodity change when price of input used in its production changes?

'Stage of increasing returns (when MP is increasing) is economically redundant, because the producer will not strike his equilibrium in this stage.' Defend or refute the statement.

If more & more resources are constantly explored and new techniques of production are constantly discovered, don't you think a day will come when our central problems will be solved once for all?