Production and cost — Economics STD 12 Humanities & Commerce — Question

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

1. When Marginal Propensity to consume is greater than Marginal Propensity to Save, the value of investment multiplier will be greater than 5.
2. The value of Marginal Propensity to Save can never be negative.

Discuss any three measures by which deficient demand in an economy can be corrected?

Why should MC be rising at the point of equilibrium?

OR

Equilibrium is never struck in a situation of falling MC. Why?

The data below shows the relationship between total output and the amount of labour hired at Papa's Pizza Shop

Number Workers(per day)	Total Product (Pizzas per day)
0	0
1	100
2	200
3	300
4	400
5	500

Does the production function in the above table exhibit diminishing marginal returns? Explain.

Give an example of a person who is staying abroad for a period more than one year and still he is treated as normal resident of India.

Would the Central Bank need to intervene in managed floating system? Explain why?

The supply for a good rises to 1000 units in response to rise in price by ₹ 1. If the original supply was 800 units at the price of ₹ 10, calculate price elasticity of supply.

When price of a commodity falls by 20%, the quantity demanded of it increases by 80%. Find out its price elasticity of demand.

Derive the inverse relation between price of the good and its demand from single commodity equilibrium condition “marginal utility = price”.

OR

Show the demand of a commodity is inversely related to its price. Explain with the help of utility analysis.