Download Economics

Summer Vacation Assignment – May/June 2013
Class XII: Economics
General Instructions:
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For the summer vacation you have to answers all the questions mentioned.
You are expected to complete the work in around 20 hours
All the questions are arranged chapter and Marks wise
Use a 100 page register to answer all the questions
Assessment of the answers will be done on the basis of CBSE guidelines
We strongly recommend that you do a self-assessment before submission
The answer register is to be submitted on June 20, 2013
Questions carrying 1 mark are required to be answered in one sentence each.
Questions carrying 3 marks are required to be answered in around 60 words each
Questions carrying 4 marks are required to be answered in around 70 words each.
Questions carrying 6 marks are required to be answered in around 100 words each.
Chapter 1: Introduction
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Question
What do you mean by a PPC?
What does rightward shift of production possibility curve indicate?
State two features of resources that give rise to an economic problem
How does change in technology affect the possibilities of production
In an underdeveloped economy why there is the need of efficient utilization of
resources?
Define macroeconomics.
Define microeconomics.
Give one example each of microeconomics and macroeconomics.
Why does an economic problem arise? Explain.
Why is the PPC concave to the origin?
Define Opportunity cost.
Define economics. Why is it important to study economics?
How does change in technology affect the possibilities of production?
Explain the central problems of an economy with the help of examples.
Distinguish between micro and macro economics. Give one example of each
What are various types of economies?
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Chapter 2: Theory of Consumer Behavior
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What happens to total utility when marginal utility is negative?
Define Total Utility
Define Marginal Utility
Define an Indifference Curve
What do you mean by utility
When is Total Utility Maximum
When can Total Utility be negative?
In economics what we assume about the marginal utility of money?
Explain the relationship between total and marginal utility
Why does budget line slope downwards from left to right?
What are the exceptions to the law of Diminishing Marginal Utility
Describe law of Diminishing Marginal Utility
Explain the various features of Indifference Curves
Define an indifference map. Explain why an indifference curve to the right shows
higher utility level.
Explain the conditions of consumer’s equilibrium in case of two goods. Use
indifference curve approach.
Explain the conditions of consumer’s equilibrium in case of (1) single commodity and
(2) two commodities. Use utility approach.
For a consumer to be in equilibrium why must marginal rate of substitution be equal
to the ratio of prices of the two goods?
Chapter 3: Demand
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What is Individual demand?
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What is Aggregate demand?
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When demand for a good rise due to rise in price of substitute goods, what is such a
change in demand called?
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What is law of demand?
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Define Giffin Goods.
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Why does the demand curve slopes downward?
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State any three factors that cause an ‘increase’ in demand of a commodity.
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Explain the effects of change in income of the buyers of a good on its demand.
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Explain any there determinants of demand for a commodity for a household.
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Explain various exceptions to the law of demand
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Explain the various assumptions of law of demand
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Distinguish between a normal good and an inferior good. Give example in each case.
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Explain how a fall in price of the related good affects the demand for the given good.
Give example.
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Explain the effect of increase the income of buyer of a normal commodity on its
equilibrium price.
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Derive the law of demand with the help of Indifference Curve Analysis
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Derive the law of demand with the help of Marginal Utility Analysis
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Explain how the following influence demands for a good.
(i) Rise in prices of the related goods
(ii) Fall in income of the consumer.
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Chapter 4: Elasticity of Demand
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What happens to total expenditure on a commodity when its price falls and its demand
is price elastic?
When is the demand of a commodity said to be inelastic?
Why the demand of the commodity which have alternative uses, is more elastic?
Define Price Elasticity of Demand.
Define Income Elasticity of Demand.
Define Cross Elasticity of Demand.
Explain any three factors that affect elasticity of demand.
How does the nature of a commodity influence its price elasticity of demand?
How is the price elasticity of demand of a commodity affected by the number of its
substitutes? Explain.
Explain the geometric method of measuring price elasticity of demand.
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Chapter 5: Theory of Production
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Define production function in the short run
What do you mean by return to a factor?
What do you mean by return to scale?
What are various factors of production
What are the compensation paid to the factors of productions
Define production function in the long run
Define short run
Distinguish between production in the short run and in the long run
Explain the relationship between Average and Total Product
Explain the relationship between Average and Marginal Product
Explain the relationship between Total and Marginal Product
Explain the meaning of increasing returns to a factor with the help of Total Product
schedule and Total Product curve.
Giving reason, explain the behavior of total product under the law of variable
proportion. Use numerical example.
Giving reasons, state whether the following statement are true or false:
(i) When there are diminishing returns to a factor, total product always decreases.
(ii) Total product will increase only when marginal product increases.
(iii) When marginal revenue is zero, average revenue will be constant.
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Chapter 6: Theory of Costs
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What is meant by cost in economics?
Define implicit cost.
What is the behavior of average fixed cost as output increases
What is the behavior of Total fixed cost as output increases
What is meant by Fixed Cost?
What is meant by Marginal Cost?
Define Explicit Cost
Write the formulae for the followings:
 Total Cost
 Average Cost
 Average Fixed Cost
 Average Variable Cost
 Marginal Cost
Give the relation between marginal cost and average variable cost with the help of
diagram.
Giving example distinguish between total fixed cost and total variable cost
Define marginal cost. State the relation between marginal cost and average cost.
Explain the relation between average fixed cost, average variable cost and average
total cost.
Explain the behavior of Cost in the long run.
Why does the difference between Average Total Cost and Average Variable Cost
decrease with an increase in the level of output? Can these two be equal at some level
of output? Explain.
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