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Numerical
1. Ed of a commodity is equal to (-)(1) and a consumer demands 400kg of a commodity at the price of
Rs10 per unit. At what price will he demanded 360kg of that commodity.
2. Ed of a commodity is equal to (-)(0.8) and a consumer demands 80 kg of a commodity at the price of
Rs1 per unit. If price doubles find demand.
3. Ed of a commodity is equal to (0.4) and a consumer demands a given amount of a commodity at the
price of Rs 4 per unit if price rises 25% calculate demand.
4. Ed of a commodity is equal TO (-)(1.6) and a consumer demands 80kg of a commodity at a given price
if price rises by Rs1 then calculate demand.
5. A consumer spends Rs160 on a commodity at the Rs 2per unit if price doubles then calculate demand
Ed=(0.4).
6. A consumer spends Rs 320 on a commodity and demands 80 units at what price will he demand 48kg
of that commodity. PEd=(-)(0.2).
7. PEd of X known to be twice that of Y if price of Y rises by 1Rs and becomes Rs5 then his demand
changes by 10% calculate % fluctuation in demand of commodity X if its price rises by 6%.
8. A 5% fall in the price of x leads to10% rise in the demand for x. A 20% rise in the price of y leads to 6%
fall in the demand for Y. Calculate the price elasticities of demand of x and y. Out of x and y, which
commodity is more elastic?
9. If ratio of change in quantity (delta Q) to original quantity (Q) is 0.5 and elasticity of demand is (-)1.25
calculate the percentage change in price.
10. If deltaQ/Q=-0.6 and price elasticity is (-)0.75, calculate the percentage change in price. Also
calculate the new expenditure if initial expenditure was Rs500 at the price of Rs20.
11. The demand function of commodity ‘X’ is given as: Qx=20-2Px. Calculate its price elasticity of
demand when price falls from Rs5 to Rs3.
12. The demand for commodity ‘A’ rises by 20% due to fall in price by Rs2 from the original price of Rs8.
(i) Calculate elasticity of demand by ‘Percentage Method’.
(ii) Whether demand of ‘A’ is elastic or inelastic? Give reason for your answer.
(iii) What will be the shape of demand curve of A?
(IV) If new demand of commodity ‘A’ is 84 units, then calculate its original demand.
(v) Determine the price elasticity by ‘Total Expenditure Method’.
(vi) Whether price elasticity of demand calculate in (i) and (v) give the same answer?
13. If the price of X is Rs2 and the elasticity of demand is 0.4, how much will a 10% reduction in quantity
demanded increase the price? If the new quantity demanded is 9 units, will the total spending on X rise?
If so, by what percentage?
14. The price elasticity of demand of commodity X is1/2 of price elasticity of demand of commodity Y.
When price of X falls by 40%, its demand rises by 20 units. Calculate price elasticity of demand of
commodity X and Y, if originally 100units of X were demanded at price of Rs5per unit.
15. If deltaP/P=0.2 and price elasticity is (-)2, calculate the percentage fall in demand. Also calculate the
original expenditure if new expenditure is Rs180 at price of Rs6.
16. The demand function of good ‘A’ is given as: Qa=40-5Pa. Calculate its price elasticity when price rises
from Rs4 to Rs6.
17. The ratio of change in price (P) is 0.4 and elasticity of demand is (-) 1.50, calculate the percentage
change in demand.
18. Price elasticity of demand for a product is unity. Its demand is 25 units at a price of Rs5 per unit. If
the price of product rises to Rs6 per unit, how much quantity of the product will be demanded?
19. Price elasticity of demand of two goods A and B is (-)3 and (-)4 respectively. Which of the two goods
has higher elasticity and why?
20. What is the significance of negative sign in Ed.
21. When price of a good rises from Rs5 Per unit to Rs6 per unit, its demand falls from 20 units to 10
units. Compare expenditures on the good to determine whether demand is elastic or inelastic.
22. When price of a good falls from Rs10 per unit to Rs9 per unit, its demand rises from 9 units to
10units. Compare expenditures on the good to find price elasticity of demand.
23. Price elasticity of demand of a good is (-)1. The consumer buys 50 units of that good when price is
Rs. 2per unit. How many units will the consumer buy if the price rises to Rs.4 per unit? Answer this
question with the help of the total expenditure method of determining price elasticity of demand.
24. Price elasticity of demand of a good is (-)1. The consumer spends Rs50 on the good at the prevailing
price. When price changes he buys 25 units. What is the new prices? Use the total expenditure method
of calculating price elasticity of demand to answer this question.
25. Identify the different output levels which make the different phases of the operations of the law of
variable proportions from the following data. Calculate APP and MPP.
Variable Inputs
Total Physical Product
0
0
1
8
2
20
3
20
4
16
26. Given that the total fixed cost is Rs.60, complete the following table:
Output(units)
Average Variable Cost
1
2
3
20
15
20
Total Cost
(RS)
Marginal Cost
(Rs)
27. Complete the following table:
Output
(Units)
1
3
-
Total Variable Cost
(Rs)
10
27
-
Average Variable Cost
(Rs)
8
10
Marginal Cost
(Rs)
6
13
Average Variable Cost
(Rs)
12
10
-
Marginal Cost
(Rs)
10
-
Marginal Cost
(Rs)
20
16
20
Total Cost
(Rs)
164
198
-
28. Complete the following table:
Output
Total Variable Cost
(Units)
(Rs)
1
2
20
4
40
29. Complete the following table:
Output
(units)
1
2
3
4
5
Average fixed Cost
(Rs)
40
24
30. Complete the following table:
Output
(units)
1
2
3
4
5
Average Fixed Cost
(Rs)
18
20
22
Marginal Cost
(Rs)
60
120
-
Total Cost
(Rs)
20
18
-
31. Given the fixed cost is Rs. 12, calculate TVC, TC and AVC from the following:
Output (Units)
MC(Rs)
1
9
2
7
3
2
4
4
5
8
6
12
32. Complete the following table:
Output (Units)
AR(Rs)
MR(Rs)
TR(Rs)
1
10
10
10
2
8
-
3
8
-
4
0
-
5
20
33. Complete the following table:
Price
Output
Total Revenue
Marginal Revenue
(Rs)
(Units)
(Rs)
(Rs)
1
6
4
2
3
6
1
(-)2
34. From the following schedule find out the level of output at which the producer is in equilibrium. Give
reasons for your answer.
Output
(Units)
1
2
3
4
5
6
7
Price
(Rs)
24
24
24
24
24
24
24
Total cost
(Rs)
26
50
72
92
115
139
165
35. On the basis of the information given below , determine the level of output at which the producer
will be in equilibrium. Use the marginal cost- marginal revenue approach. Give reasons for your answer.
Output
AR(Rs)
TC(Rs)
1
7
7
2
7
15
3
7
22
4
7
28
5
7
33
6
7
40
7
7
48
36. Es of a commodity = 0.5 and a producer supplies 100kg of a commodity at the price of Rs.20per unit.
At what price will he supply 120kg of that commodity.
37. Es of a commodity =0.8 and A producer supplies 10kg of a commodity. At the price of Rs.4per unit if
price rises by 25%. Calculate supply.
38. Ps of a commodity=0.2 and a producer supplies a given amount of commodity. If price rises by 1Rs.
And becomes Rs2. Then calculate supply.
39. If producer earns Rs 320 from the sale of a commodity and supplies 80unit. If price doubles find
supply ES=0.4.
40.Consuming two goods X and Y Misha is in equilibrium when prices of the two goods are Rs4 and Rs2
per unit respectively. At this point, the marginal rate of substitution will be equal to 6. True or False.Give
reason.
41. When elasticity of demand is infinity, slope of demand curve will also be infinity. True or False. Give
reason.
42.Find change in expenditure of the commodity when Ed=-0.4 and quantity demanded of the
commodity decreases by 10%.
Ans. 12.5%
43. A consumer consumes only two goods X and Y both priced at Rs3 per unit. If the consumer chooses a
combination of these two goods with marginal rate of substitution equal to 3, is the consumer in
equilibrium ? Give reasons. What will a rational consumer do in this situation? Explain.
44. A consumer consumes only two goods x and Y whose prices are Rs4 and Rs5 per unit respectively. If
the consumer chooses a combination of the two goods with marginal utility of X equal to 5 and that of Y
equal to 4, is the consumer in equilibrium ? Give reasons. What will a rational consumer do in this
situation? Use utility analysis.
45. A consumer wants to consume two goods. The prices of the goods are Rs4 and Rs5 respectively. The
consumer’s income is Rs20.
(i) Write down the equation of the budget line.
(ii) How much of Good-1 can the consumer consume if she spends her entire income on that good?
(iii) How much of Good-2 can she consume if she spends her entire income on that good?
(iv) What is the slope of the budget line?
46. Consider the demand curve D(p)= 10-3p. What is the elasticity at price 5by3?
47. Suppose a consumer can afford to buy 6 units of Goods -1 and 8 units of Good-2 if she spends her
entire income. The prices of the two goods are Rs6 and Rs8 respectively. How much is the consumer’s
income?
48.Giving reason, comment on the shape of production possibility curve based on the following
schedule. Also, find the marginal opportunity cost of producing Good-1.
Good-1(units)
Good-2(units)
0
25
1
20
2
15
3
10
4
5
5
0
49.Giving reason comment on the shape of production possibilities curve based on the following
schedule:
Good X(Units)
Good Y(Units)
0
10
1
9
2
7
3
4
4
0
50.find the marginal opportunity cost for producing Rice. Also, draw the PPC, from the given
information.
Production of Wheat (kg)
Production of Rice (kg)
1000
0
900
250
700
500
400
750
100
850
0
870