Practice Test 5
Practice test 5 on microeconomics for class XI, CBSE Students.
Let’s understand this topic. But before that, please subscribe to our newsletter. It’s free of cost.
You can also subscribe to my YouTube Channel. You can also buy my book at Amazon: https://amzn.in/bEGJyKF
Disclosure: Some of the links on the website are ads, meaning at no additional cost to you, I will earn a commission if you click through or make a purchase. Please support me so that I can continue writing great content for you.
1. ‘Homogeneous Product’ is a characteristic of:
a. Perfect competition only
b. Perfect Oligopoly
c. Both a and b
Answer. a. Perfect competition only
2. Define demand.
Answer. Demand is the ability and willingness to buy a product.
3. Identify the commodity whose demand will not change inspite of rise or fall in the price of the commodity.
a. Cosmetics
b. Salt
c. Television
d. Garments
Answer. b. Salt because it is a necessity good.
4. Average revenue and price are always equal under
a. Perfect competition only
b. Monopolistic competition only
c. Monopoly only
d. All market forms
Answer. d. All market forms
Because Total revenue = Price x quantity
Average revenue = Total revenue / quantity
AR = PRICE X QUANTITY/ QUANTITY
AR = PRICE Always.
5. Explain the “close substitute” feature of monopolistic competition.
Answer. The product of the seller are differentiated but close substitutes for one another.
The buyers can make choices as the same product produced by 1 firm is different from the product produced by the other firm. For example, Dove soap and LUX soap.
6. Distinguish between microeconomics and macroeconomics.
Answer.
7. State the meaning and properties of production possibilities frontier.
Answer. This is a curve that shows the different production possibilities or the production combination of two goods that an economy can produce, given the resources and technique of production.
This is the slope of the production possibility curve. Marginal Opportunity Cost (MOC) refers to the rate at which the production (or quantity) of one commodity is sacrificed (Good Y) to produce one more unit of other commodities (Good X). To construct the production possibility curve we calculate marginal opportunity cost using the slope formula. MOC = Δy/Δx
It is read as a sacrifice in the production of good Y, to produce more units of good X (or change in Y over a change in X).
With the help of marginal opportunity cost, we can easily depict the shape of the production possibility curve. Let’s see what are the three main shapes of the production possibility curve.:
- If the marginal opportunity cost is increasing, then the production possibility curve is concave in shape.
- MOC is decreasing so PPC will be convex in shape
- If the marginal opportunity cost is constant, then the production possibility curve will be a negatively sloped straight line(like a demand curve).
8. Complete the following table:
Answer:
Step 1: Find TFC, which. is same as TC AT 0 level of output
Step 2: Find TVC = TC – TFC.
Step 3: Use MC to find TVC, whichever is possible. TVC = Summation of MC, whereas MC changes in TVC by a change in output level.
Step 4: Find AFC, which is TFC/Q. Similarly, complete the rest.
9. When price of a commodity X falls by 10%, its demand rises from 150 units to 180 units. Calculate its price elasticity of demand.
Answer. Price elasticity of demand is the percentage change in quantity demanded by the percentage change in price.
Percentage change in demand = Change in demand by original demand X 100.
Percentage change in demand = 30/150 x100 = 20 %
Ped = 20% / 10% = 2
10. Differentiate between movement along demand curve and shift in demand curve.
11. State different phases of the law of variable proportions on the basis of total product.
Answer. https://learnwithanjali.com/microeconomics/the-law-of-diminishing-returns-to-a-factor/
12. Explain briefly the factors determining elasticity of demand.
13. Explain the conditions of consumer’s equilibrium under indifference curve approach.
Answer. https://learnwithanjali.com/microeconomics/consumer-equilibrium-using-indifference-curve-analysis/
14. What is producer equilibrium? Explain its condition with the help of schedule and diagram.
Answer. https://learnwithanjali.com/microeconomics/producer-equilibrium/
Thank You!
- Real and nominal GDP
- National income
- National income formula list
- Value-added method
- Income method
- Expenditure method
You can read more posts by me on national income:
Feel free to join our Facebook group and subscribe to this website to get daily educational content in your mailbox.
Happy Learning!
Disclosure: Some of the links on the website are ads, meaning at no additional cost to you, I will earn a commission if you click through or make a purchase. Please support me so that I can continue writing great content for you.