Posted by
Anjali Kaur
on
Nov 22, 2021
Practice Test 6
Practice Test 6, for microeconomics, class XI, CBSE. Given below is the cost schedule of a firm. Its TFC is 120/-. Calculate the MC and AVC at each level of output.
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1. Following information is given about a firm:
From this information find out:
- AFC of producing 4 units.
- AVC of producing 5 units.
- Least AC.
- MC of producing 3rd unit
- TVC of producing 6 units.
Answer.
For formulas, read this post; Important formulas.
2. Given below is the cost schedule of a firm. Its TFC is 120/-. Calculate the MC and AVC at each level of output.
Answer.
Steps to be followed, first find TC with the help of ATC. (TC = ATC X Output)
Then find TVC, which is TC – TFC
Find AVC = TVC/Output
Find MC, which is a change in TVC/ change in Output
3. The price elasticity of a commodity is (-) 1.5. When its price falls by Rs 1 per unit, its quantity demanded rises by 3 units. If quantity demanded before the price change was 30 units, what was the price at this demand? Calculate.
Answer. In the question, we have changed in price = 1
Change in quantity demanded = 3
We also have original or old quantity = 30
Now, Ped = Change in Q/ Change in P X P/Q
1.5 = 3/1 X P/30
1.5 = 3P/30
1.5 X 30 = 3P
45/3 = P
P = 15.
4. When the price of a good rises from 10 to 12 per unit, its demand falls from 25 units to 20 units. What can you say about Ped of the good through ‘expenditure approach’?
Answer.
Total expenditure = Price x Quantity
If price and expenditure moves in the opposite direction (Here, price is increasing and expenditure falls), then Ped > 1
5. Total revenue is 400, when the price of a commodity is 2 per unit. When price rises to Rs 3, the quantity supplied is 300 units. Calculate price elasticity of supply.
Answer.
Total Revenue = Price x Quantity Supplied
So, Price elasticity of supply = Change in Supply/ Change in Price x P/Q
Pes = 100/ 1 x 2/200
Pes = 1
Thank You.
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