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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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Dear Children
I
take pride to be your teacher for ECONOMICS, and assure you all my cooperation for your success in your examination. I have compiled the questions ,that
are asked in the CBSE examination for revision and practice. It does not
include numerical. However ,I have solved a number of problems in
the class.
T
hese questions are also discussed in the class. I am sure all of you practice these
questions and if you have any problem please consult me. I have also prepared
comprehensive slides for MICRO and MACRO ECONOICS Which will be
useful for your revision.. It is not the replacement for your text book but compliment in
learning and remembering your studies. It is concise and help you in your revision.
All of
you are intelligent
and sure that you will come out in
colours
flying
in the final examination. I assure you all my support and pray GOD to
“GIVE MY CHILDREN happiness ,prosperity and good marks.” You should bring name
and fame to you, your family, your school and your teachers who work day and night
with you for your success. You are known for your behaviour with your classmates,
seniors, teachers and elders.
Remember !
 Winners are always not born but made
 You can make your future
 You have the ability to excel
 There can be no great success without commitment
 you are never defeated unless you accept defeat
“Education is a companion which no future can depress, no crime can destroy, no enemy can
alienate it and no nepotism can enslave.”
Ropo Oguntimehin
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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POINTS TO REVISION
1.
2.
3.
4.
5.
6.
7.
8.
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10.
11.
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13.
14.
15.
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18.
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23.
24.
25.
Definition of Demand?
Elements of demand
Determinants of demand
Demand Function
Kinds of demand
Demand Schedule
Demand Curve
Individual and market demand
Law of Demand
Assumptions
Why does demand curve slope downwards
Exceptions of Law of demand
Extension of demand
Increase of demand
Contraction of demand
Decrease of demand
Movement along demand curve
Shift in demand curve
Factors affecting changes in demand.
Income demand
Cross Demand
Substitute Goods
Complementary Goods
Inferior Goods
Normal Goods
“When God measures man, He puts tape around the heart not the head “
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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VERY SHORT ANSWER
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
What is meant by commodity in Economics?
What is increase in demand ? Define it.
What term is used for rightward shift of the demand curve?
What is meant by inferior goods?
What will be the shape of
the Income Demand curve
concerning Normal good?
What will be the shape of
the Income Demand curve
concerning Inferior Good?
What do you understand by substitute goods? Give an
example.
What happens to the demand for substitute goods of a
commodity when the price of the commodity falls?
What happens to the demand for substitute goods of a
commodity when the price of the commodity rise?
What will be the shape of demand curve in the case of
substitute goods?
What do you understand by complementary goods? Give an
example
When does the consumer buy less of commodity at a given
price?
When does the consumer buy more of commodity at a given
price?
What do you understand by unrelated goods?
Mention any one determinant of demand for a commodity
other than the price?
If the demand of good Y increases as the price of another
good X rises how are the goods related?
The roots of education are bitter, but the fruit is sweet.
Aristotle
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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17
18
19
20
21
If the quantity demanded of commodity X decreases as the
household’s income increases what type of good is ‘X’?
If the demand of good Y Decreases as the price of another
good X falls how are the goods related?
If the demand of good Y increases as the price of another
good X falls how are the goods related?
If the demand of good Y Decreases as the price of another
good X rises how are the goods related?
State one factor that causes an increase in demand of good
SHORT ANSWER QUESTIONS
1
2
3
4
5
6
7
8
9
Define Demand. What factors influence the demand of a
commodity?
Name 4 factors that affect the consumer’s Demand for the
commodity by an individual house hold.
What is demand function ? Explain in brief.
What is demand schedule? Distinguish individual and market
demand schedule.
Explain the relationship between household and market
demand.
What is demand curve? Distinguish individual and market
demand curve.
Explain the Law of Demand .Give the assumptions also.
Why does the demand curve slope downwards from left to
right?
What is income effect of fall in price of a commodity on its
demand.?
“There is nothing training cannot do. Nothing is above its reach. It can turn bad morals to good;
it can destroy bad principles and recreate good ones; it can lift men to angelship.”
Mark Twain
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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10
11
12
13
14
15
16
17
18
19
20
21
22
23
What is substitution effect of fall in price of a commodity on
its demand.?
Why does the demand of a commodity fall with the rise in
price?
Why do household buy more at a lower price?
When does the consumer buy more of a commodity at a
given price?
Define Increase in Demand. What Factors causes increase in
demand?
Define decrease in Demand. What Factors causes decrease
in demand?
Distinguish between ‘Extension of demand’ and ‘Increase in
demand’.
Distinguish between ‘Contraction of demand’ and ‘Decrease
in demand’
Distinguish between ‘Movement along the demand curve’
and ‘Shift in
demand curve’.
How do the changes in income of a buyer of a commodity
affect the
demand for the commodity.?
Distinguish between ‘Substitute’ and ‘Complimentary’ goods.
Distinguish between ‘Inferior’ and ‘Normal’ goods
What will happen to the demand for the commodity if the
price of complementary good changes?
What will happen to the demand for the commodity if the
price of
Substitute good falls?
“The beautiful thing about learning is that no one can take it away from you”.
B.B. King
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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LONG QUESTIONS
1. Define Demand. Explain the factors influencing the demand for
a commodity in the market
2. What is ‘Law of Demand’ ? State the assumptions.
3. What is demand curve? Why it is sloped downwards?
4. Explain Income substitution and price effects.
5. Explain with diagrams extension of demand and increase in
demand.
6. How is demand for commodity affected by changes in prices of
related goods? Give suitable Examples Price Elasticity and
consumer Equilibrium
Definition of Elasticity of demand
Price Elasticity
Determinants of price Elasticity
Types
Measurements
a. Total Outlay or Expenditure Method
b. Percentage or Proportionate Method
c. Geometric or Arc method
6. Problems applying the measurement concepts
7. Consumer Equilibrium
8. Marginal utility approach
9. Law of diminishing marginal utility
10. Relationship between Total Utility and Marginal Utility
11. Consumer Equilibrium
1.
2.
3.
4.
5.
“While we try to teach our children all about life, our children teach us what life is all
about”.
Angela Schwindt
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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VERY SHORT ANSWER
Give the range of price Elasticity of demand
What is arc elasticity?
What is the shape of perfectly inelastic demand curve?
What is the shape of perfectly elastic demand curve?
What is the shape of perfectly unitary elastic demand curve?
When is the demand for commodity is said to be completely
inelastic?
7. Define Equilibrium
8. What is utility?
9. What is the Law of diminishing Utility?
10. What is the budget line?
1.
2.
3.
4.
5.
6.
“Education's purpose is to replace an empty mind with an open one”.
Malcolm Forbes
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HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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SHORT ANSWER
1. Define Price Elasticity of demand. How it is measured?
2. Explain the factors on which price elasticity of demand for a
commodity depends.
3. How does the close substitute of a good affect price elasticity of
demand?
4. Explain with illustration the price elasticity using expenditure
method.
5. What is the price elasticity demand for life saving drugs?
6. What is the relationship between slope and elasticity of demand
curve?
7. Explain Paradox of plenty.
8. What does consumer equilibrium position convey?
9. Explain the cardinality and Ordinality
10. Explain Rationality
11. When the price of Wheat goes up by 10% its demand falls from
800 units to 600 units. Calculate price elasticity. Will the demand
curve for Wheat be flatter or steeper?
12. The consumer spends Rs 40 at a price Rs 1/- per unit and Rs 60 at
a price Rs 2/-per unit. What is the price elasticity of demand? What
kind of good it is? What is the shape of its demand curve?
13. Price of good X rises from Rs20 to 30 per unit , consequently the
demand falls by 20 units and become 100 units. Find elasticity of
demand.
14. The market demand for a good at Rs 5/- per unit is 100 units.
When price change market demand raises to 150 units. Find out
the new price if price elasticity of demand is –2.5
“Education is the ability to listen to almost anything without losing your temper.”
Robert Frost
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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LONG ANSWER
1. How is the concept of price elasticity of demand useful?
2. Discuss the point method of measuring elasticity of demand.
3. Draw the downward sloping straight line demand curve touching
both the axes. Mark the price elasticity at different points. Mention
3 factors affecting price elasticity.
4. Explain law of Equi marginal utility with examples. What is
saturation point.
PRODUCTION AND COST
1. Meaning of production
2. production function
a. Definition
b. Types
3. Aspects of production
c. Short run Vs Long Run
d. Fixed factors Vs Variable Factors
e. Level of Production Vs Scale Of Production
4. Concept of Production
f. Total Product (TP)
g. Average Product(AP)
h. Marginal Product(MP)
i. Relation Ship between AP,MP,TP
5. Law of variable Proportion
j. Statement
k. Assumption
l. Stages
m. Reasons
“Those who educate children well are more to be honored than parents, for
these only gave life, those the art of living well. “
Aristotle
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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6. Law of return to Scale
n. Statement
o. Three stages
p. Reasons
7. Difference between return to factor and return to scale
8. Producer Equilibrium
VERY SHORT AND SHORT QUESTIONS
1. Define Production and give example
2. Distinguish Short run and Long run production
3. As a variable input labour is increased by one unit , total output
falls. What would you say about Marginal productivity of labour ?
4. What happens to total output when the marginal product of
variable input is negative
5. What is production function
6. What are the types of production functions?
7. What is the relationship between MP and AP
8. Explain the law of diminishing return.
9. What do you mean by increasing return to scale? How do they
arise ?
10. What do you mean by decreasing return to scale? How do they
arise ?
11. Define Total product and Marginal Product . What happens to MP
when TP is decreasing?
12. Explain Law of Variable proportions in terms of behaviour of total
product.
“Develop a passion for learning. If you do, you will never cease to grow.”
Anthony J. D'Angelo, The College Blue Book
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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13. Explain Law of Variable proportions in terms of behaviour of
Marginal product
LONG ANSWER
1. Explain Law of diminishing returns
2. Explain Law of Variable proportion with the help of diagram.
NCERT QUESTIONS
1. How does the total fixed cost change when output changes?
2. How does the TVC derived from marginal cost schedule?
3. What does the division of labour mean?
4. What are volume discount ?
5. “ Increasing and Decreasing returns to scale respectively imply
downward and upward sloping portion of long run average cost
curve” Defend or Refute.
6. Classify the following as Fixed and Variable Cost:
a. Rent for shed
b. Minimum Telephone Bill
c. Cost of Raw material
d. Wages to permanent staff
e. Interest on capital
f. Payment for transportation of goods
g. Daily Wages
h. Telephone charges beyond the minimum
“I have never met a man so ignorant that I couldn't learn something from him.”
Galileo Galilei
TO MY LOVING CHILDREN “ IF YOU NEED ME, I AM HERE. I AM HERE FOR YOU. I AM
HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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SHORT QUESTIONS
1. Distinguish Between
a. Explicit Cost Vs Implicit Cost
b. Private Cost Vs Social Cost
c. Fixed Costs Vs Variable cost
d. Short Period Vs Long Period
e. Short Period Vs Very Short Period
f. Marginal Cost Vs Average Cost
g. Marginal Cost Vs Total Cost
h. Marginal Revenue Vs Average Revenue
Note : Each one can be a 3 mark question asked in CBSE
2. Give two example of implicit and explicit cost in :
i. Tailoring Shop
j. House hold enterprise
3. Can marginal cost rise when average cost is falling? Explain with
diagram.
4. What is revenue? Explain the meaning and calculation of Average
Revenue, Marginal Revenue.
5 What is the nature of Total cost at zero level of production? Explain
with Reasons
6. What are the Features of AFC Curve?
7 Explain the relationship between MC and AC.
8 Explain the relationship between MC and TC.
9 Explain the relationship between MR and AR.
10 Explain the relationship between MR and TR.
11 Define Break Even Point.
12 What would you say about the average cost of the firm if the marginal
cost of production is less than Average Cost.
“I have learned silence from the talkative, toleration from the intolerant, and kindness
from the unkind; yet, strange, I am ungrateful to these teachers.”
Kahlil Gibran
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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LONG ANSWER
What are fixed Cost? Explain the nature and shape of the total
fixed and average fixed cost
5 Why is average fixed cost curve is ‘U’ shaped in short run?
6 Explain the relationship between AC and MC.
7 Explain the concept of TR, MR, AR with their Relationship.
8 What is the difference between SAC and LAC . Why is it LAC also
‘U’ Shaped
9 With the help of diagram explain Break Even Point.
Supply and Elasticity
4.
Points for Revision
Meaning of Supply
Factors determining Supply
Supply
a. Schedule
b. Curve
4
Increase in supply
5
Extension in supply
6 Decrease in supply
7 Contraction in supply
8 Reasons for increase in supply
9 Reasons for decrease in supply
10 Movement along the supply curve
1
2
3
“The whole art of teaching is only the art of awakening the natural curiosity of young
minds for the purpose of satisfying it afterwards”.
Anatole France
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HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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11
c.
d.
e.
f.
Shift in supply curve
12 Elasticity of supply
Meaning
Degree
Measurement
Factors affecting
VERY SHORT ANSWER
1 What is meant by supply ? Define it.
2. State the law of supply.
3 What is meant by elasticity of supply?
4 What is perfectly inelastic supply?
5 What is perfectly elastic supply?
Perfectly elastic curve?
6
7
8
9.
What
What
What
What
What will be the shape of
will be the shape of Perfectly inelastic curve?
is increase in supply?
is decrease in supply?
is unitary elastic curve?
Short Answer Questions
12.
13.
14.
15.
Define supply. What factors influence the supply of a commodity?
Name 3 factors that affect the supply of a commodity.
What is Supply function ? Explain in brief.
What is Supply schedule?.
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HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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16. Why does the supply curve slope upwards?
17. What do you understand by contraction of supply? Show it with
example and diagram
18. Define Increase in supply. What Factors causes increase in supply?
19. Define decrease in supply. What Factors causes decrease in supply?
20. Distinguish between ‘Extension of supply’ and ‘Increase in supply’.
21. Distinguish between ‘Contraction of supply’ and ‘Decrease in supply’
22. Distinguish between ‘Movement along the supply curve’ and ‘Shift
in supply curve’.
23. Will a crop disease which reduces yield of wheat on farm result in a
contraction or decrease in the supply of wheat?
24. Price elasticity of a good is 5. A producer sells 500 units at Rs 5.
How much will he be selling at Rs 6
25.
LONG ANSWER
1
2
3
4
5
6
7
8
Define Supply. Explain the factors
influencing the Supply for a commodity in the market
What is ‘Law of Supply with diagram’ ? State the assumptions if
any. Or What is Supply curve? Why it is sloped upwards?
Explain with diagrams extension of Supply and increase in Supply
Explain with diagrams Contraction of Supply and Decrease in
Supply
Distinguish between ‘Movement along the supply curve’ and ‘Shift
in supply curve’.
Define Price elasticity of supply.
How it is measured?
Draw the supply curve for
Elasticity of supply > 1
Elasticity of supply < 1
Elasticity of supply =1
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HERE TO MAKE YOU COMFORTABLE IN ECONOMICS
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BHARAT NATIONAL PUBL IC SCHOOL
QUESTIONS ON MICRO C LASS XII
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What is meant by change in supply? What factors affect the change
in supply ?
9.
“You cannot teach a man anything; you can only help him find it within himself”.
Galileo
If one wishes a subject to be taught with maximal effectiveness, he should:
1.
Present it in its most interesting form.
a.
b.
2
Demonstrate its general use in life.
Demonstrate its specific use to the student in life.
Present it in its simplest form (but not necessarily its most elementary).
a. Gauge its terms to the understanding of the student.
b. Use terms of greater complexity only as understanding progresses.
3.
Teach it with minimal altitude (prestige).
a. Do not assume importance merely because of a knowledge of the subject.
b. Do not diminish the stature of the student or his own prestige because he does
not know the subject.
From: Teaching by L. Ron Hubbard.
To my children Chitra
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