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Economics 6 Marks Question

Model Paper 2 · CBSE STD 11 Commerce (CBSE - English Medium). 2 questions.

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6 Marks Question

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Question 16 Marks
Answer the following questions
(i) When price of a commodity falls by Rs 1 per unit, its quantity demanded rises by 3 units. Its Price Elasticity of Demand is (-) 2. Calculate its quantity demanded if the price before change was Rs 10 per unit.
(ii) A consumer buys 30 units of a good at a price of Rs. 10 per unit. Price elasticity of demand for the good is (-)1. How many units the consumer will buy at a price of Rs. 9 per unit Rs. Calculate.
Answer
Answer the following questions
(i) Given, $\Delta P= Rs 1$ per unit, $\Delta Q=3$ units
$\begin{array}{l}
E_{d d}=(-) 2, P=R s 10 \\
E_{d}=\frac{\Delta Q}{\Delta P} \times \frac{P}{Q} \\
\text { or }(-) 2=\frac{3}{-1} \times \frac{10}{Q} \\
Q=\frac{3 \times 10}{2} \\
Q=15 \text { units }
\end{array}$
$\therefore$ Quantity demanded before change m price $=15$ units.
(ii) Given,
$\begin{array}{l}
Q_1=30 \\
Q_2=?
\end{array}$
$\begin{array}{l}P_1=R s .10 \\ P_2=R s .9 \\ E_d=-1 \\ E_d=\frac{\Delta Q}{Q} \times \frac{P}{\Delta P} \\ \Delta Q=Q_2-Q_1=Q_2-30 \\ \Delta P=P_2-P_1=9-10=-1 \\ -1=\times \frac{Q_2-30}{30} \times \frac{10}{-1} \\ 3=Q_2-30 \\ 33=Q_2\end{array}$
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Question 26 Marks
Explain the Law of Variable Proportion with the help of total and marginal physical schedule.
Answer
Law of Variable Proportions states that as we increase the quantity of input, keeping other inputs fixed, the total product initially increases at an increasing rate, then at a decreasing rate and finally at a negative rate.
Variable factor (Labour)TPMPPhase
1
2		10
30		10
20		1st
3
4
5		45
52
52		15
7
0		2nd
648-43rd
Law of variable proportion can be discussed in three phases:
i. Increasing Returns to a Factor: In the first phase, every additional variable factor adds more and more to the total output. It means TP increases at an increasing rate and MP of each variable factor rises.
ii. Diminishing Returns to a Factor: In the second phase, every additional variable factor adds a lesser amount of output. It means TP increases at a diminishing rate and MP falls with increase invariable factor.
iii. Negative Returns to a Factor: In the third phase the employment of additional variable factor causes TP to decline. MP now becomes negative.
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