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CBSE Class 12 Economics Solved Question Paper 2013

Short Answer Type

Give two examples of fixed costs.

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Define marginal cost.

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When is the demand for a good said to be inelastic?

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Given the meaning of market demand.

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Under which market form a firm’s marginal revenue is always equal to price?

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Explain the difference between an inferior good and a normal good.

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7.
Explain the law of diminishing marginal utility with the help of a total utility schedule.

According to the Law of Diminishing Marginal Utility, marginal utility of a good diminishes as an individual consumes more units of a good. In other words, as a consumer takes more units of a good, the extra utility or satisfaction that he derives from an extra unit of the good goes on falling.

Schedule showing diminishing marginal utility

No: of Dose consumed per day.

Total utility

Marginal Utility

-2

-5

As per the schedule, marginal utility of the second unit is 10. For the consumption of the third unit, the marginal utility falls to 8. Next, for the consumption of the fourth unit, the marginal utility falls to 6 and so on. For the consumption of the 7th unit the marginal utility turns to negative and for the 8th unit negative utility increases. Thus, any extra unit beyond six gives disutility rather than positive satisfaction.

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Explain the condition of consumer’s equilibrium with the help of utility analysis.

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When the price of a good rises from Rs 20 per unit to Rs 30 per unit, the revenue of the firm producing this good rises from Rs 100 to Rs 300. Calculate the price elasticity of supply.

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