Class Assignment: Time: N/A
Standard: 12th COM Economics
Date: 15 /08/2024 Marks: N/A
Question 1. Total utility is maximum when:
(a) Marginal utility is zero.
(b) Marginal utility is at its highest point.
(C) Marginal utility is equal to average utility.
(D)Average utility is maximum.
Question 2. Which of the shaded area in the diagrams below represent total utility?
Question 3. What does the area under the marginal utility curve depict?
(a) Average Utility
(b) Total Utility) Indifference Curve
(d) Consumer Equilibrium
Question 4. Which one of the following is not an assumption of the theory of demand
based on analysis of indifference curve?
(a) Given scale of preferences as between different combinations of two goods.
(b) Diminishing marginal rate of substitution.
(c) Constant marginal utility of money.
(d) Consumers would always prefer more of a particular piece of goods to less of it,
other things remaining the same.
Question 5. The consumer is in equilibrium at a point where the budget line-
(a) is above an indifference curve.
(b) Is below an indifference curve.
(C) Cuts an indifference curve.
(D) is tangent to an indifference curve.
Question 6. An indifference curve slopes down towards right since more of one
commodity and less of another result in-
(a) Same satisfaction.
(b) Greater satisfaction.
(c) Maximum satisfaction.
(d) Decreasing expenditure.
Question 7. The second glass of lemonade gives lesser satisfaction to a thirsty boy. This
is a clear case of
(a) Law of demand.
(B) Law of diminishing returns.
(c) Law of diminishing utility.
(D)Law of supply.
Question 8. The consumer is in equilibrium when the following condition is satisfied:
(a) MUxMUy > PxPy
(b)MUxMUy < PxPy
(c)MUxMUy = PxPy
(d) None of these.
Question 9. Which of the following options is a property of an indifference curve?
(a) It is convex to the origin.
(b) The marginal rate of substitution is constant as you move along an indifference
curve.
(c) Marginal utility is constant as you move along an indifference curve.
(d) Total utility is the greatest where the 45 degrees line cuts the indifference curve.
Question 10. When economists speak of the utility of a certain good, they are referring
to-
(a) The demand for the good.
(b) The usefulness of the good in consumption.
© The satisfaction gained from consuming the good.
(D) The rate at which consumers are willing to exchange one unit of good for an
other one.
Question 11. Budget set is-
(a) Right angled triangle formed by the budget line with the axes.
(b) All points on the budget line
© Points inside the budget line.
(D) Points on Y-axis from where budget line starts and the point on X-axis where
budget line ends.
Question 12. If indifference curve is straight line downward sloping,
(a) MRS is increasing
(b) MRS is decreasing
© MRS is constant
(c) MRS is zero
Question 13. If X and Y are two commodities, indifference curve shows-
(a) X and Y are equally preferred
(b) Y is preferred to X
© X is preferred to Y
(c) None of these.
Question 14. If Marginal Rate of Substitution is constant throughout, the Indifference
curve will be:
(a) Parallel to the x-axis.
(b) Downward sloping concave.
© Downward sloping convex
(c) Downward sloping straight line.
Question 15. If Marginal Rate of Substitution Is increasing throughout, the Indifference
curve will be:
(a) Downward sloping convex.
(b) Downward’ sloping concave.
© Downward sloping straight line..
(c) Upward sloping convex.
Question 16. Which of the can be referred to as ‘point of satiety’?
(a) Marginal Utility is negative
(b) Marginal utility is zero
(c) Total Utility is rising
(d) Total Utility is falling
Note: Questions 1, 2 and 3 have same figure.
SHORT ANSWER QUESTIONS (KNOWLEDGE BASED)
Question 1. Explain with diagram, the relationship between TU and MU.
Question 2. How many chocolates will a consumer have, if they are available free of
cost?
Question 3. "Total Utility remains the same, whether Marginal Utility is positive or
negative". Defend or refute.
Question 4. State with reasons if the following statements are true or false:
1. At a grand family get-together party you go on eating and eating since you have not to
pay.
2. As we consume more units of a commodity, our total utility from its consumption
keeps falling.
Question 5. Explain the law of diminishing marginal utility with the help of a total utility
schedule.
Question 6. Derive MU Schedule from TU Schedule.
Question 7. A person’s marginal utility schedule is given below. Derive their total utility
schedule.
Question 8. Calculate
Question 9. Derive the inverse relation between price of the good and its demand from
single commodity equilibrium condition “marginal utility = price”.
Question 10. A consumer consumes only two goods X and Y. At a consumption level of
these two goods, he finds that the ratio of marginal utility to price in case of X is higher
than that in case of Y. Explain the reaction of the consumer.
Question 11. A consumer consumes only two goods X and Y. At a certain consumption
level of these goods, he finds that the ratio of marginal utility to price in case of X is
lower than that in case of Y. Explain the reaction of the consumer.
Question 12. Explain the meaning of diminishing marginal rate of substitution with the
help of a numerical example.
Question 13. Why is an Indifference curve generally, convex to the origin?
The consumer forgoes less and less units of y as he acquires additional unit of x.
Question 14. Explain why an Indifference curve has a negative slope (i.e. IC slope down-
wards to the Right).
Question 15. Why do Indifference curves not intersect each other?
Question 16. Explain that Higher IC provides higher level of satisfaction, or ‘Higher
indifference curve represents higher level of satisfaction to the consumer’. Explain the
statement, also state the underlying assumption related to this property of indifference
curve.
COMPETENCY BASED QUESTIONS
Higher Order Thinking Skills (Hots)
Question 1. What does budget line in terms of price and money income indicate? [1
Mark]
Question 2. What is the slope of budget line?
[1 Mark]
Question 3. What is the horizontal (X-axis) intercept of budget line? [1 Mark]
Question 4. What is the Vertical (Y-axis) intercept of budget line?
Question 5. “Law of diminishing marginal utility will operate even if consumption takes
place in intervals.” Defend or refute.
[3-4 Marks]
Question 6. Derive the law of demand from the two commodity equilibrium condition
“Marginal Utility price ratio through utility approach”.
Question 7. Define market rate of exchange.
[3-4 Marks]
Question 8. How is the law of diminishing marginal utility applied with regard to
education/knowledge? [1 Mark]
Application Based Questions
Question 9. A consumer has Rs 10, and both goods X and Y are priced at Rs 2 and are
available in. Integer units, (a) give the bundles that this consumer can afford to buy (bj
give the bundles that cost exactly Rs 10 (c) give two bundles that this consumer cannot
afford to buy. [3-4 Marks]
Question 10. A consumer has Rs 40 and both goods X and Y are priced at Rs 20 and are
available in integer units, (a) Give the bundles that this consumer can afford (b) give the
bundles that cost exactly Rs 40. [3-4Marks]
Question 11. Give reasons for the following statements
1. If the income of a consumer changes and prices of the two goods remain
unchanged, a new budget line will be formed which will be parallel to the
original line.
2. If the income of the consumer remains unchanged and if the price of goods
X rises, intercept of the budget line of Y-axis will remain the same, but on
the X-axis it will shift to the left.
Question 12. Giving reasons, comment on the following statements:[3-4 Marks]
1. A consumer’s equilibrium is always formed at a point on the given budget
line.
2. A consumer’s equilibrium will shift to a higher indifference curve with an
increase in consumer’s income.
Question 13. Giving reasons, state why the following two conditions must be
satisfied when a consumer is in equilibrium. [3-4 Marks]
1. A budget line must be tangent to an indifference curve.
2. Marginal rate of substitution must be diminishing.
. Ch 4
Q1. Define presentation of data.
Answer: The presentation of data is a representation of data in an attractively and
transparent manner that everybody understands and analyses.
Q2. What is tabulation?
Answer: Tabulation means presenting data in tabular form.
Q3. Define table.
Answer: Table refers to the systematic representation of data with rows and columns.
Q4. Explain a simple table.
Answer: A simple table only displays one characteristic of the data.
Q5. What is a complex table?
Answer: It is a table that shows more than one characteristic of the data.
Q6. Define a derived table.
Answer: A derived data is something where the information is not displayed according
to the way it was collected. It is first into rations or percentages and then presented.
Q7. What are the two principal parts of a table?
Answer: The two principal parts of a table are (i) Table number and (ii) Title
Q8. What are the different kinds of a table?
Answer: Tables can be classified into three parts. (1) Purpose (ii) Originality, and (in)
Construction
Q9. What are the two types of complex table?
Answer: The two types of a complex table are (i) Double or two-way table and (ii)
Manifold table
Q10. What are a different forms of presentation of data?
Answer: The different form of presentation of data are (1) Textual and descriptive
presentation (ii) Tabular presentation, and (iii) Diagrammatic presentation
Q11. What kinds of diagrams are more effective in representing the following?
(i) Monthly rainfall in a year
(ii) Composition of the population of Delhi by religion
(iii) Components of cost in a factory
Answer
(i) Monthly rainfall in a year-simple bar diagram as only one variable i.e. monthly
rainfall is to be present and compared visually.
(in) Composition of the population of Delhi by religion – Simple bar diagram Plotting
different religion on the x-axis and the number of people on the y-axis, one can easily
compare the number of the population religion-wise.
(ii) Components of cost in a factory – Pie chart as entire circle represents the total
cost and various components of costsare shown by different portions of the
circle.
Q12. Suppose you want to emphasise the increase in the share of urban non-workers
and lower level of urbanisation in India as shown in Example 4.2. How would you do it
in the tabular form?
Q13. How does the procedure of drawing a histogram differ when class intervals are
unequal in comparison to equal class intervals in a frequency table?
AnswerWhen the class intervals are equal then by normal method we can make
histogram which has equal width of rectangle. When the class intervals are unequal,
heights of rectangles are to be adjusted to yield comparable measurements by using
frequency density (class frequency divided by width of the class interval) instead of
absolute frequency.
Q14. The Indian Sugar Mills Association reported that, “Sugar production during the
first fortnight of December 2001 was about 3,87,000 tonnes, as against 3,78,000 tonnes
during the same fortnight last year (2000). The off-take of sugar from factories during
the first fortnight of December 2001 was 2,83,000 tonnes for internal consumption and
41,000 tonnes for exports as against 1,54,000 tonnes for internal consumption and nil
for exports duringthe same fortnight last season.'
(i) Present the data in tabular form.
(ii) Suppose you were to present these data in diagrammatic form which of the
diagrams would you use and why?
(iii) Present these data diagrammatically.
Q15. The following table shows the estimated sectoral real growth rates (percentage
change over the previous year) in GDP at factor cost.
