Sandeep Garg solutions for Introductory Microeconomics [English] Class 11 chapter 1 - Introduction [Latest edition]

Scarcity refers to the limitation of ______ in relation to ______ for a commodity.

______ deals with study of jute industry.

______ Science deals with what ought to be or how the economic problems should be solved.

Microeconomics is that part of economic theory which studies the behaviour of ______ units of an economy.

______ is the cost of next best alternative foregone.

The problem of ______ involves selection of goods and services to be produced and the quantity to be produced of each selected commodity.

Production Possibility Frontier is ______ shaped because of increasing marginal rate of transformation.

Macroeconomics is also known as ______.

______ is also known as Price Theory.

______ is a system which provides people with the means to work and earn a living.

______ is that part of economic theory which studies the behaviour of aggregates of the economy as a whole.

__________ Economics deals with what are the economic problems and how are they actually solved.

Production Possibility Frontier is convex shaped when marginal rate of transformation is __________.

Two branches of Economics are __________ and __________.

Growth of resources shifts the production possibility frontier towards __________.

The part of economics which deals with the question of what, how and for whom to produce is known as __________.

The problem of __________ deals with technique of production.

PPF will shift towards __________ when there is technological degradation in case of both the goods.

__________ (Positive/Normative) statement is based upon facts and not suggestive in nature.

__________ measures the slope of Production Possibility Frontier.

Microeconomics and Macroeconomics are both __________ (Independent/Interdependent) Branches of Economics.

True or False with Reason:

The problem of ‘how to produce’ involves choice between consumer goods and capital goods.

True or False with Reason:

Economy always operates on production possibility frontier.

True or False with Reason:

Macroeconomics deals with study of cotton textile industry.

True or False with Reason:

If the economy is operating inside the production possibility frontier, it indicates that the economy is saving resources for growth and expansion in future.

True or False with Reason:

Central problems are found only in the developing economies like India and Bangladesh and not in developed countries like USA.

True or False with Reason:

Production possibility frontier shifts towards right when an economy moves from a situation of underutilisation to fuller utilisation of resources.

True or False with Reason:

Economy can never operate outside the production possibility frontier with the given resources and technology.

True or False with Reason:

Production possibility frontier is concave shaped as production of one good can be increased only by reducing quantity of another good.

True or False with Reason:

The problem of price determination of a product comes under the purview of macroeconomics.

True or False with Reason:

Growth of resources shifts the production possibility frontier towards right.

True or False with Reason:

Microeconomics is concerned with study of problems of the economy like inflation or unemployment.

True or False with Reason:

Microeconomics and macroeconomics are independent branches of economics.

True or False with Reason:

The opportunity cost of a machine which can produce only one product is high.

True or False with Reason:

Economising of resources refer to saving resources for future use.

True or False with Reason:

‘No Scarcity’ means no economic problem.

True or False with Reason:

The part of economics which deals with the question of what, how and for whom to produce is known as macroeconomics.

True or False with Reason:

Production Possibility Curve shows the point at which the economy actually operates.

True or False with Reason:

Main tools of Macroeconomics are demand and supply.

From the set of statements given in Column I and Column II, choose the correct pair of statements:

Match the statements given under A with the correct options given under B.

Match the statements given under A with the correct options given under B.

Match the statements given under A with the correct options given under B.

Match the statements given under A with the correct options given under B.

Match the statements given under A with the correct options given under B.

Match the statements given under A with the correct options given under B.

The law of scarcity ______.

Assume that a PPF for butter and guns is drawn so that it is a straight line. It means ______.

Which of these is not an assumption of PPC?

In which situation, can PPC be a straight line:

Which of these economic problem deals with technique of production?

Ramesh is working at a salary of ₹ 35,000 per month. He receives two job offers: (i) To work as an accountant at a salary of ₹ 30,000 per month; (ii) To work as a sales manager at a salary of ₹ 25,000 per month. In the given case, his opportunity cost will be:

PPF is concave to the origin because of ______.

An economy operate on PPF when there is ______.

Identify the central problem which deals with deciding the quantity of goods to be produced ______.

Scarcity refers to limitation of ______ in relation to ______ for a commodity.

The word ‘Economics’ is most closely connected with the word ______.

A point outside the PPF indicates ______.

Opportunity cost is the ______.

Which economic problem involves selection of category of people who will ultimately consume the goods?

Which of the following will not lead to shift in PPF?

The fundamental economic problem being faced is ______.

Which part of economic theory aims to determine income and employment level of the economy?

What will happen to PPF if there is technological upgradation in case of both the goods?

Answer the following question with the help of following diagram:

Which of the following point represents underutilisation of resources? 

Which of the following point represents fuller and efficient utilisation of resources?

Which of the following point shows unattainable combination?

Labour-intensive techniques are chosen in a ______.

Which of the following is related to Microeconomics?

Which of the following is a cause of economic problem?

Which of the following is not a central problem of economy?

Which of the following illustrates a decrease in the unemployment using the PPC?

The problem of ‘What to produce’ covers the issue relating to ______.

Consider the following table:

The opportunity cost of increasing guns production from 2 to 3 units is ______ units of butter.

Consider the following table:

All possibilities A to E deal with ______.

Consider the following table:

If at some other point say G, the economy produces 2 units of guns and 6 units of butter, then ______.

Consider the following table:

If the above points A to E are depicted on a graph, then such PPF would be ______.

Economics is the study of ______.

Which point on the following PPC shows a “productively efficient” level of output?

In deciding “How to produce”, the economy should consider ______.

Opportunity Costs arise ______.

Which of these statements is true about production possibility curve?

The Production Possibility Frontier is generally ______.

Due to ‘Make in India’, there has been large inflow of foreign capital. It will lead to the following change in PPC:

The shift in PPC is caused due to ______.

In case of decreasing MRT, the shape of PPC will be depicted by the following diagram:

The following change in PPC is due to:

In the order of sequence, the points of ‘Underutilisation’ and ‘Unattainable’ are ______.

Which of the following is an assumption of Production Possibility Frontier?

Macroeconomics focuses on all of the following except ______.

Which of the following is an example of a Positive Economy?

The statements like ‘Economy should control pollution’ or ‘Unemployment in the economy ought to be reduced’ fall within the scope of ______.

An economy has 2 alternatives of production from the available resources: (i) 20X + 1Y; or (ii) 18X + 2Y. If the economy chooses the second alternative, then what is the MOC of producing Y?

The Opportunity Cost arises ______.

In the context of rising prices, following statements are made by two people:

Udit: Prices in the economy are continuously rising;
Shivam: The Government should take reasonable steps to control rising prices.

Identify the statements as Positive Statement and Normative Statement.

Production Possibility Frontier is ______.

In the given figure, the movement on the production possibility curve from point A to point B shows ______.

(Choose the correct alternative) 

In the given figure X₁Y₁ and X₂Y₂ are Production Possibility Curves in two different periods T₁ and T₂ respectively for Good X and Good Y. A₁ and A₂ represent actual outputs and P₁ and P₂ represent potential outputs respectively in the two time periods. The change in actual output of Goods X and Y over the two periods would be represented by movement from ______.

(Fill up the blank) 

Shift from Point A on Production Possibility Curve X₁Y₁ to Point B on X₂Y₂ in the given figure indicates:

(Choose the correct alternative) 

In the given figure X₁Y₁ and X₂Y₂ are Production Possibility Curves in two different time periods T₁ and T₂ respectively. A₁ and A₂ represent actual outputs in T₁ and T₂ periods respectively. P₁ and P₂ are potential outputs in T₁ and T₂ periods respectively. The change in potential production over the two periods would be represented by a shift from ______.

(Choose the correct alternative). 

Positive Economic analysis is concerned with ______.

‘Fit India Movement’ launched by the Indian Government will lead to ______.

Out of the following, which one is Macro variable?

Which of the following is the salient feature of resources?

If there is unemployment in the economy, then we would be producing ______ the PPC.

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative:

Assertion (A): Tools of microeconomics are demand and supply.

Reason (R): Microeconomics studies the behaviour of individual units of an economy.

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative:

Assertion (A): Production Possibility Frontier (PPF) is a Concave Shaped curve.

Reason (R): PPF shows all the maximum possible combination of two goods, which can be produced with the available resources and technology.

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative:

Assertion (A): Human wants differ in priorities.

Reason (R): For every individual, some wants are more important and urgent as compared to others.

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative:

Assertion (A): Macroeconomics is also known as Income and Employment Theory.

Reason (R): Macroeconomics aims to determine income and employment level of the economy.

In the following Question, read the following statement: Assertion (A) and Reason (R). Choose the correct alternative:

Assertion (A): Positive Economics avoids economic value judgements.

Reason (R): Positive Statements can be verified as true or false by comparing with actual data.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Scarcity is universal as every individual, organisation and economy faces scarcity of resources. 

Statement 2: There would have been no economic problem, if resources were not scarce.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Positive economics statements are statements of truth.

Statement 2: Positive economics aims to make real description of an economic activity.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Marginal Rate of Transformation measures the slope of Production Possibility Frontier. 

Statement 2: In case of Production Possibility Frontier, marginal opportunity cost is always decreasing.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Production Possibility Frontier will shift towards left when there is decrease in resources with respect to both the goods. 

Statement 2: An economy cannot operate at any point outside Production Possibility Frontier as it is unattainable with the available productive capacity.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Marginal rate of transformation increases because it is assumed that all resources are equally efficient in production of all goods. 

Statement 2: There exists a direct relationship between change in quantity of one commodity and change in quantity of the other commodity in case of Production Possibility Frontier.

In the following Question, read the following statements and choose the correct alternative:

Statement 1: Microeconomics aims to determine price of a commodity or factors of production.

Statement 2: Microeconomics is also known as Income and Employment Theory.

What is meant by scarcity?

What is the basic reason for economic problem in all economies?

What is meant by economizing resources?

Define an economy.

What is meant by economic problem?

How is an economic problem, a choice-making activity?

Why does an economic problem arise? Explain.

State 2 features of resources that give rise to an economic problem.

What is economics all about?

Name the two important branches of Economics.

Define microeconomics.

Give two examples of microeconomics studies.

Define macroeconomics.

Give two examples of macroeconomic studies.

Is the study of cotton textile industry a macroeconomic study or a microeconomic study?

Why is the study of the problem of unemployment in India considered a macroeconomic study?

Is the study of general price level a macro economic study?

What are the central problems of an economy?

What is meant by the central problem of what to produces?

What is meant by the problem of “How to produce”?

What is meant by the problem of “For whom to produce”?

Why the problems of what, how and for whom to produce are known as central problems?

Define opportunity cost.

What is the opportunity cost of an input which has no alternative use?

Why does production possibility curve look concave to the origin?

What does a rightward shift of production possibility curve indicate?

Give examples of ‘Growth of resources’.

When does a PPF shift to the right?

Give an example of decrease in resources.

When is the fuller utilisation of available resources said to have taken place?

What does increasing marginal opportunity cost along a PPF mean?

State two characteristics of the economic resources which give rise to economic problem.

Harish earns ₹ 10 lakhs per year from his business. He gets an offer from a company to work at a salary of ₹ 8,40,000 per year. Determine opportunity cost of Harish.

Define ‘Marginal Rate of Transformation’.

What do you mean by alternate uses of resources?

How in any one way can an economy increase its production capacity?

A country’s resources are fully and efficiently employed. The problem of scarcity exists. What advice will be given to raise the efficiency level of the human resource to fight scarcity?

Unemployment is reduced due to the measures were taken by the government. State its economic value in the context of production possibilities frontier.

The government has started promoting foreign capital. What is its economic value in the context of Production Possibilities Frontier?

A large number of technical training institutions have been started by the government. State its economic value in the context of production possibilities frontier.

Name the economic value achieved through the spread of education in the context of production potential.

Name the economic value achievable when attempts are made to increase resources in the country.

State any two central problems under ‘problem of allocation of resources’.

What does concavity of PPC indicate?

What is the effect on marginal rate of transformation when we move downwards along a production possibility curve?

Define normative economics with a suitable example.

State any one assumption for the construction of the curve that shows the possibilities of potential production of two goods in an economy.

‘Pradhan Mantri Kisan Samman Nidhi’ which provides assured income support of ₹ 6,000 per year should provide a big relief to small and marginalized farmers. State with reason whether this statement is positive or normative.

Why does an economic problem arise? Explain.

Distinguish between the following.

Micro Economics and Macro Economics.

What are the three central problems of an economy? Name them.

Why do central problems of an economy arise?

What is meant by the problem of allocation of resources?

Distinguish between positive economics and normative economics, with suitable examples.

Explain the central problem of how to produce.

Explain the central problem of ‘choice of technique’.

Explain the problem “What to produce” with the help of an example.

Explain the central problem of the choice of products to be produced.

Answer the following question.
Explain the central problem for whom to produce.

Explain the central problem of distribution in an economy.

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

Discuss meaning of production possibility curve through a schedule and diagram.

Why do central problems arise? Explain.

Why is Production Possibilities Curve concave? Explain

Draw a production possibility curve and show the following situation:

Fuller utilisation of resources

Draw a production possibility curve and show the following situation:

Economic growth

Draw a production possibility curve and show the following situation:

Decrease in resources

Draw a production possibility curve and show the following situation:

Under utilisation of resources

What does a production possibility curve show? When will it shift to the right?

How is production possibility curve affected by unemployment in the economy? Explain.

What is meant by marginal opportunity cost?

Why is marginal opportunity cost increasing in case of PPF?

Give the various reasons for shift in production possibility curve.

What is ‘Marginal Rate of Transformation’? Explain with the help of an example.

Define Production Possibilities Curve.

Explain why the Production Possibilities Curve is downward sloping from left to right.

Explain the meaning of opportunity cost with the help of a production possibility schedule.

State any three assumptions on which a ‘Production Possibilities Curve’ is based.

State the meaning and properties of production possibilities frontier.

What will be the effect on PPC of Bihar if better job opportunities are created in Bihar?

Using a diagram, explain what will happen to the PPC of Bihar if the river Kosi causes widespread floods?

Explain the behaviour of’marginal rate of transformation’ along a production possibility curve.

What will likely be the impact of the large-scale inflow of foreign capital in India on Production Possibilities Curve and why?

Explain the concept of 'Marginal Rate of Substitution' with the help of a numerical example. Also, explain its behaviour along an indifference curve

In what circumstances may the production possibility frontier shift away from the origin? Explain.

Comment upon the shape of production possibility curve, if the marginal rate of transformation is constant.

Discuss briefly the concept of normative economics, with suitable example.

An unemployed person, Ramesh is looking out for a job. Ramesh received 2 job offers: one for ₹ 20,000 from ICICI Bank and other offer of ₹ 15,000 from HDFC Bank. What is the opportunity cost for Ramesh if he accepts the offer of ICICI Bank?

Calculate the marginal opportunity cost (MOC) of commodity X for the given combinations:

A country produces two goods: A and B. Its production possibilities are shown in the following table. Calculate the values of MRT. Construct a PPF, with the help of given possibilities and discuss the shape of PPF.

Giving reason, comment on the shape of Production Possibilities curve based on the following schedule:

Giving reason, comment on the shape of the Production Possibilities curve based on the following schedule:

Giving reason, comment on the shape of Production Possibilities Curve based on the following table:

Refer to the following conversation between four friends:

In this conversation, the normative statement is made by:

Production Possibility Frontier is based on the following assumptions:

(i) The amount of resources in an economy is not fixed.
(ii) With the help of given resources, only two goods can be produced.
(iii) The level of technology is assumed to be constant.
(iv) Resources are equally efficient in the production of all products.

Alternatives:

Choose the incorrect statements:

(i) Resources are limited in relation to their demand.
(ii) All wants of humans have equal intensity.
(iii) All human wants can not be satisfied.
(iv) Economics is the study of satisfying limited wants.

Alternatives:

‘There has been establishment of educational institutes for skill development of Human resources’. It will lead to following change in Production Possibility Curve (PPC) ______.

Economics is all about making choices in the presence of scarcity. (True/False)

In case of Production Possibility Curve, _______ (Decreasing/Increasing) Marginal Opportunity Cost operates because productivity and efficiency of factors of production _______ (Increase/Decrease) as they are shifted from one use to another.

From the set of statements given in Column I and Column II, choose correct pair of statements.

Alternatives:

Read the following statements carefully and choose the correct alternative from the following:

Statement 1: Microeconomics studies the economy in general, while Macroeconomics concentrates on the working of the individual components. Statement 2: There is no degree of aggregation in microeconomics.

Cyclone Remal caused significant damage in West Bengal and a lot of production facilities were destroyed. How will it affect the Production Possibility Curve of an economy?

Discuss the concept of attainable and unattainable combinations in the Production Possibility Curve with the help of a diagram.

Which of the following statements are incorrect about the Production Possibility Frontier (PPF)?

(i) It slopes upwards as an increase in the production of one good requires an increase in production of the other.
(ii) It shows the maximum available possibilities.
(iii) An outward shift in PPF means that the economy can produce more of both commodities, which was not possible earlier.
(iv) It is concave shaped due to decreasing marginal rate of transformation.
(v) It will rotate when there is no change in productive capacity concerning both the goods.

Alternatives: 

Which of the following statements are not related to positive economics?

(i) It can be verified with actual data.
(ii) It aims to determine the ideals.
(iii) It is based upon facts.
(iv) It is suggestive in nature.

Alternatives: 

Rakesh is working as a Branch Manager at IDFC Bank at a salary ₹ 1,50,000 per month. He received 2 more job offers: An offer of ₹ 1,20,000 from HDFC Bank and an offer of ₹ 1,15,000 from Axis Bank. Opportunity Cost of Rakesh for working as a Branch Manager in IDFC Bank is:

The main reasons for existence of economic problems are:

(i) Wants of people are unlimited and keep on multiplying and cannot be satisfied due to limited resources.
(ii) Resources are unlimited in relation to their demand and economy can produce all that people want.
(iii) Resources are not only scarce but they can also be put to various uses.

Alternatives:

‘Around 22% of India’s population is below the poverty line.’ It is an example of Normative Economics. (True/False)

______ (Human wants/Resources) are scarce, while ______ (Human wants/Resources) are unlimited.

Read the following statements carefully and choose the correct alternative from the following:

Statement 1: Human wants are limited, but the means to satisfy them are unlimited. Statement 2: Resources differ in priorities, while human wants have alternative uses.

‘Riya says that India is larger than China in terms of land area, while Seema says that China is larger than India in terms of land area’. State whether both these statements are Positive or Normative.

‘Macroeconomics is more important branch of economics as compared to microeconomics.’ Defend or refute the given statement.

‘More of one good or service usually means less of others.’ In the light of given statement, discuss the relevant central problem.