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Discuss any four factors affecting price elasticity of demand.
Concept: Concept of Elasticity of Demand
What is meant by production function?
Concept: Production Function
State whether the following items will be included in the estimation of National Income or not? Give a reason for your answer.
Fresh tomatoes used by a food processing company.
Concept: National Income Aggregates >> Gross National Product at Market Price
Answer the following question.
Discuss the relationship between the income of the consumer and demand for a commodity with respect to normal goods, inferior goods, and necessities.
Concept: Concept of Demand
Differentiate between the expansion of demand and an increase in demand, using diagrams.
Concept: Movement along the Demand Curve and Shift of the Demand Curve
The figure given below shows the relation between the quantity demanded for the good X and the price of the good Z. What type of goods are X and Z?
Concept: Concept of Demand
Milk is used for making curd, sweets and chocolates.
What type of demand does milk have? Give a reason.
Concept: Concept of Demand
Figures (A), (B) and (C) given below represent different types of Demand curves.
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| (A) | (B) | (C) |
What kind of goods do each of these Demand curves represent? Give a reason for each of the curves.
Concept: Demand Curve
Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.
Elasticity of demand is equal to zero
Concept: Demand Curve
Read the passage given below and answer the questions that follow.
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In India, Fixed deposits have long been a favourite investment choice of people, especially senior citizens, as it promise steady returns. It attracts those who are seeking a stable income. But it’s an illusion in the period of inflation. Inflation is the rate at which the general level of prices for goods and services rises, subsequently eroding the purchasing power of money. In simple terms, what money could buy today might not a few years down the line. Fixed deposits are financial instruments offered by banks where you deposit a lump sum amount for a fixed period at a predetermined rate of interest. Consider an investment of Rs 1 crore in a fixed deposit at a 6% annual interest rate and the annual rate of inflation is 5%. By the 10th year your pre inflation return is 1.79 crore, but post inflation it’s just 1.10 crore. The nominal value of investment in fixed deposits may appear to grow, inflation significantly diminishes their real value and purchasing power over time.
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- What is the theme of the extract? (2)
- Differentiate between Demand pull and Cost push inflation. (2)
- What are the demand deposits and time deposits? (2)
- Since 1998 RBI has been using new measures of money supply, M0, M1, M2 and M3. Which one of these measures incorporates fixed deposit as one of its components? Mention the other components of that measure. (2)
Concept: Concept of Demand
Define marginal utility.
Concept: Total Utility and Marginal Utility
The aggregate utility obtained from the consumption of a specific unit of a commodity is called ______.
Concept: Cardinal Approach (Utility Analysis)
Utility maximising consumers would like to decrease the consumption when ______.
Concept: Total Utility and Marginal Utility
Draw a diagram to show the elasticity of demand when it is greater than one.
Concept: Concept of Elasticity of Demand
The price of a good decreases from ₹100 to 80 per unit. If the price elasticity of demand for the good is 2 and the original quantity demanded is 30 units, calculate the new quantity demanded.
Concept: Concept of Elasticity of Demand
Which one of the following will cause a rise in the equilibrium price of rice when the demand for rice remains the same?
Concept: Movements Along and Shifts in Supply Curve
The price of a mobile handset has risen in the market. But the dealers have not been able to increase the supply proportionately.
What will be the price elasticity of supply for the mobile handset? Draw the supply curve to indicate the type of elasticity.
Concept: Measurement of Elasticity of Supply
An increase in the number of firms in the market causes a rightward shift in the market supply curve, but the individual supply curve may shift leftward. Justify the statement.
Concept: Movements Along and Shifts in Supply Curve
Give two differences between intended supply and actual supply.
Concept: Determinants of Supply
Prices of air conditioners and refrigerators have shot up in the new year as consumer durables makers pass on the impact of rising raw material costs and higher freight charges to customers, while home appliances like washing machines may witness a 5–10 per cent price hike later this month or by March.
(Source: The Economic Times)
Explain the behaviour of supply of this consumer durable. Illustrate the same in a diagram.
Concept: Determinants of Supply
