{"id":41389,"date":"2019-06-10T06:13:05","date_gmt":"2019-06-10T06:13:05","guid":{"rendered":"https:\/\/www.aplustopper.com\/?p=41389"},"modified":"2020-11-24T16:59:03","modified_gmt":"2020-11-24T11:29:03","slug":"plus-two-microeconomics-chapter-wise-questions-answers-chapter-1","status":"publish","type":"post","link":"https:\/\/www.aplustopper.com\/plus-two-microeconomics-chapter-wise-questions-answers-chapter-1\/","title":{"rendered":"Plus Two Microeconomics Chapter Wise Questions and Answers Chapter 1 Introduction"},"content":{"rendered":"
Question 1.
\nThe diagram shows:
\n(a) A movement from \u2018a\u2019 to \u2018b\u2019 has no opportunity cost.
\n(b) A movement from \u2018f\u2019 to \u2018b\u2019 has an opportunity cost.
\n(c) Higher is the production of good 2 greater is the opportunity cost of reducing its production.
\n(d) Higher is the production of good 2 lesser is the opportunity cost of reaching its output.
\n
\nAnswer:
\nThe concave shape of PPC shows that higher the production of goods 1 and 2. Goods 2 higher will be the opportunity cost of reducing production.<\/p>\n
Question 2.
\nState economic terms. The allocations of scarce resources and the distribution of the final goods and services.
\nAnswer:
\nThe central problem of an economy.<\/p>\n
Question 3.
\nAs a result of liberalisation policy, the inflow of foreign capital has increased. What is its impact on production possibility frontier?
\nAnswer:
\nPPC shifts upward as a result of the increase in the availability of capital resources.<\/p>\n
Question 4.
\nWhat is the shape of a production possibility curve?
\n(i) Convex to origin
\n(ii) Concave to origin
\n(iii) Horizontal
\n(iv) Vertical
\nAnswer:
\n(ii) Concave to origin<\/p>\n
Question 5.
\nHow does a market economy solve central economic problems?
\n(i) Central planning
\n(ii) Price mechanism
\n(iii) Both (i) and (ii)
\n(iv) None of the above
\nAnswer:
\n(ii) Price mechanism<\/p>\n
Question 6.
\nScarcity definition was given by:
\nAnswer:
\n(i) Adam Smith
\n(ii) Alfred Marshall
\n(iii) Lionel Robbins
\n(iv) Samuelson
\nAnswer:
\n(iii) Lionel Robbins<\/p>\n
Question 1.
\nFill in the blanks.
\n
\nAnswer:
\n<\/p>\n
Question 2.
\nClassify the following statement into two branches of economics.<\/p>\n
Answer:<\/p>\n
Question 3.
\nDistinguish between centrally planned economy and a market economy.
\nAnswer:
\nIn a centrally planned economy, the government or the central authority plan all the important activities in the economy. All important decisions regarding production, exchange, and consumption of goods and services are made by the government.<\/p>\n
On the other hand in a market economy, all the important decisions are made on the basis of demand and supply conditions. The central problems regarding what and how much to produce are solved through the coordination of economic activities brought about by the price signals.<\/p>\n
Question 4.
\nGive two examples of underutilization of resources.
\nAnswer:<\/p>\n
Question 5.
\nGive a few examples of resources in economics.
\nAnswer:
\nBy the term \u2018resources\u2019, we mean land, labour, tools, machinery, etc. in economics.<\/p>\n
Question 6.
\nThe government should increase tax on tobacco products. Explain whether the statement is positive or normative.
\nAnswer:
\nThis is a normative statement because it says how the government should tax. It is only an opinion. This cannot be proved. Since it contains a value judgment it is a normative statement.<\/p>\n
Question 7.
\n\u201cStudy of aggregates is equally important to study individual units.\u201d
\nSubstantiate the above statement by distinguishing the two branches of Economics. Give two examples for each.
\nAnswer:<\/p>\n
Question 1.
\nClassify the following into Microeconomics and Macroeconomics.
\nAnswer:
\nDemand analysis, Consumption function, Theory of international trade, Income determination, Pricing of factors of production, Investment function.
\n<\/p>\n
Question 2.
\nMatch Column B and C With Column A.
\n
\nAnswer:
\n<\/p>\n
Question 3.
\n\u201cSince resources are limited, they should be properly used\u201d. Comment on this statement in the light of utilization of energy resources in Kerala.
\nAnswer:
\nThis statement relates to the problem of scarcity of resources and thus connected to the scarcity definition of Lionel Robbins. According to this statement, the scarcity of resources forces the economy to choose the most urgent need that is to be satisfied.<\/p>\n
Since energy resource in Kerala is limited in supply, it has to be judiciously utilized. Control over the utilization of energy is necessary in states like Kerala so that this scarce resource can be protected.<\/p>\n
Question 4.
\nClassify the following features under the title centrally planned economy and market economy. Price mechanism, comprehensive planning, welfare motive, profit motive, public sector, private sector.
\nAnswer:
\n<\/p>\n
Question 5.
\n\u201cLabour intensive technique is the best technique of production\u201d. Give arguments in favour of and against this statement.
\nAnswer:
\nArguments in favour of:<\/p>\n
Arguments against:<\/p>\n
Question 6.
\nGiven below a Production Possibility Curve of an economy. Compare the points in the context of production possibilities of the economy.
\n
\nAnswer:
\nThe Production Possibility Curve is an analytical tool presenting the alternative production possibilities of an economy. It is used to explain the central problems of an economy and how they are solved.
\nIn the diagram:
\n1. Point A indicates the efficient utilization of available resources.<\/p>\n
2. Point B shows that the available resources of the economy are not fully utilized. In other words, it is an indication of the underutilization of resources.<\/p>\n
3. Point C is outside the Production Possibility frontier. This means that the economy cannot produce at this point using the available resources.<\/p>\n
Question 7.
\nSuppose there is growth of resources in an economy. How does it affect the PPC?
\nAnswer:
\nWhen there is growth of resources the PPC shifts outwards as shown, below.
\n
\nThe PPC shifts from PP to P due to growth of resources in the economy. Therefore, economy produces more of food and cloth.<\/p>\n
Question 8.
\nWith the \u20b9500 cash award received by a student prepares a list of goods. She writes to have each of the goods priced @\u20b9500.<\/p>\n
Explain opportunity cost. Identify the opportunity cost of buying one economic textbook.
\nAnswer:
\nOpportunity cost is the next best alternative forgone. The opportunity cost of buying an economic textbook is the foregone movie with friends.<\/p>\n
Question 9.
\nDifferent economic systems solve basic economic problems using different mechanisms. Complete the following table by writing the basic economic problems as well as the mechanisms used. Also, give one example for each economic system.
\n
\nAnswer:
\n<\/p>\n
Question 10.
\nRead the following statements and write the terms used in economics.
\nAnswer:<\/p>\n
Answer:<\/p>\n
Question 1.
\nClassify the following statements into positive and normative statements.<\/p>\n
Answer:<\/p>\n
Question 2.
\n\u201cThe implementation of Vizhinjam project will shift our PPC rightward\u201d. Suggest two points in favour and against this statement.
\nAnswer:
\nA production Possibility Curve is an analytical tool presenting the alternative production possibilities of an economy.
\nPoints in favour of:<\/p>\n
Points against:<\/p>\n
Question 3.
\nPrepare a production possibility schedule showing constant marginal opportunity cost.
\nAnswer:
\n
\nIt is clear from the tables that in each production possibility to increase the production of wheat by one tonne, 20 kgs of rubber have to be sacrificed. This shows that there is constant marginal opportunity cost operating in this case. In this case, the PPC of rubber and wheat becomes a straight line.<\/p>\n
Question 4.
\nDifferentiate between microeconomics and macroeconomics.
\nAnswer:<\/p>\n
Microeconomics<\/td>\n | Macroeconomics<\/td>\n<\/tr>\n |
Deals with individual units<\/td>\n | Deals with aggregates<\/td>\n<\/tr>\n |
Provides worms\u2019 eye view<\/td>\n | Provides bird\u2019s eye view<\/td>\n<\/tr>\n |
Deals with partial equilibrium analysis<\/td>\n | Deals with general equilibrium analysis<\/td>\n<\/tr>\n |
Known as price theory<\/td>\n | Known as income theory<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Question 5.
|