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UNIT 3 & 4 IMPORTANT QUESTIONS
Class 11 - Economics
1. Which one of the following leads to the law of variable proportions? [1]
a) None of these b) Some factors are constant
c) Some factors are more efficient than others d) Specialisation of factors
2. With the increase in production the difference between total cost and total fixed cost: [1]
a) Decreases b) Both Increases or Decreases
c) Increases d) Remains Constant
3. The marginal revenue become negative when [1]
a) TR is constant and maximum b) TR stops rising at increasing rate
c) TR starts falling d) TR starts rising
4. A firm maximizes its profits only when MR=MC [1]
a) Can’t say b) FALSE
c) None of these d) true
5. Due to the installation of a machine with the latest technology, the cost of production has decreased. It will lead [1]
to:
a) Increase in supply b) Decrease in supply
c) Expansion in supply d) Contraction in supply
6. Movement along the supply curve occurs due to: [1]
a) decrease in own price of the commodity b) increase in own price of the commodity and
decrease in own price of the commodity
c) increase in own price of the commodity d) factors other than own price of the
commodity
7. Is AR = price [1]
a) Yes b) Can’t say
c) No d) None of these
8. Fill in the blanks: [6]
(i) In constant proportions type production function, the scale of output ________ with the change in output.
(changes, does not change)
(ii) Marginal cost curve cuts average cost curve at its ________ point. (minimum/maximum)
(iii) When AR is falling, it is ________ than MR. (higher/lower)
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(iv) If the firm increases its output even after MR = MC and equilibrium is struck, then MC becomes
________ MR. (greater than, equal to)
(v) Quantities of a particular commodity offered for sale by all the firms at a given price in the market is
known as ________.
(vi) Product differentiation is not possible under ________ competition.
9. Do you agree with the view that TP increases even when MP is decreasing? [1]
10. What is the law of diminishing marginal product? [3]
11. How does the total fixed cost change when output changes? [1]
12. Complete the following table when total fixed cost is Rs.60. [3]
Output AVC TC MC
(Units) (Rs.) (Rs.) (Rs.)
1 20 - -
2 15 - -
3 20 - -
13. Distinguish between Fixed Cost and Variable Cost. [4]
14. What changes should take place in total revenue, so that [3]
i. Marginal revenue is positive and constant and
ii. MR is falling?
15. Explain the conditions of producer’s equilibrium with the help of a marginal cost and marginal revenue [6]
schedule.
16. When is supply of a good said to be perfectly elastic? [1]
17. Explain the concept of price elasticity of supply. When is the value of price elasticity of supply equal to one? [3]
18. When price of a commodity rises by 10%, its supply rises by 40 units. Its elasticity of supply is 1. Calculate its [4]
supply at original price.
19. How does an increase in output price affect the equilibrium quantity exchanged in the product market? [1]
20. How does cost-saving technology affect the market price and quantity exchanged? [1]
21. How are the equilibrium price and quantity affected when demand and supply curves shift in opposite [6]
directions?
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