Define fixed cost. Give an example. Explain with reason the behaviour of Average Fixed Cost as output is increased.
Define marginal product. State the behaviour of marginal product when only one input is increased and other inputs are hold constant.
When price of a commodity falls from Rs 12 per unit to Rs 9 per unit, the producer supplies 75 percent less output. Calculate price elasticity of supply
Why do central problems of an economy arise? Explain the central problem of 'for whom to produce'?
Examine the effect of (a) fall in the own price of good X and (b) rise in tax rate on good X, on the supply curve. Use diagrams.
Explain the implications of the following in a perfectly competitive market
(a) Large number of sellers
(b) Homogeneous products.
Explain the implications of the following in an oligopoly market:
(a) Barriers to entry of new firms
(b) A few or a few big sellers
a. In an oligopoly market, there are barriers to the entry of new firms. The patents rights are largely created for these firms and hence entry is restricted to new firms. The existing firms need not face any problem of new firms and they are able to earn-extra normal profit.
b. Only few number of firms in the industry but they are big firms dominate the market for product. They establish brand loyalty through intense advertising. Hence, they are able to earn extra-normal profit.
National income is the sum of factor incomes accruing to:(Choose the correct alternative):
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents