Commerce (English Medium) Class 12 - CBSE Question Bank Solutions for Economics

What does the price elasticity of supply mean? How do we measure it?

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?

The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the initial and final output levels of the firm.

At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?

What do the short run marginal cost, average variable cost and short run average cost curves look like?

At which point does the SMC curve intersect SAC curve? Give reason in support of your answer.

What is the relation between marginal cost and average variable cost when marginal cost is rising and average variable cost is falling?

Draw Average Variable Cost, Average Total Cost ad Marginal Cost curves in a single diagram.

What is the relation between Average Variable Cost and Average Total Cost, if Total Fixed Cost is zero?

What happens to the difference between Average Total Cost and Average Variable Cost as production is increased?

State the relation between MC curve and AVC and ATC curves.

Answer the following question.
Explain the relation between the Average Variable Cost (AVC) curve and the Marginal Cost (MC) curve. Use diagram

Explain whether the statement is true or false with reasons.

Total cost curve and Total variable cost curve are parallel to each other.

What is opportunity cost? Explain with the help of a numerical example.

Explain the concepts of Opportunity Cost and Marginal Rate of Transformation using a production possibility schedule based on the assumption that no resource is equally efficient in production of all goods.

Define opportunity cost.

A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain.

Explain the difference between "Shift of Supply Curve" and "Movement along Supply Curve". State one factor responsible for each. Use diagrams. 

When does 'shift' in supply curve take place?

What is 'change in supply'? Explain the effect of tax imposed on a good on the supply of the good.