Q1. What changes in total revenue will result in (a) decrease in marginal revenue (b) an
increase in marginal revenue?
Q2. Explain the law of diminishing marginal utility with the help of a utility schedule.
Q3. Explain the geometric method of measuring price elasticity of supply.
Q4. Which of the following have inelastic demand: a) salt b) medicines c) mobile phones.
Q5. Suppose that the demand curve for XYZ co. slopes downwards to the right. Would you
conclude that the firm is a price taker or a price maker. Give reasons.
Q6. How does TU change with the change in MU of a commodity? Explain.
Q7. Trace the effects of demand shifts on equilibrium price and quantity. Use diagram.
Q8. Explain the relationship between price elasticity of demand and marginal revenue with
the help of a diagram.
Q9. What is the relationship between elasticity of demand and change in expenditure on a
Q10. Explain the concept of marginal rate of substitution with the help of a schedule and
diagram.Give reasons behind diminishing MRSXY .
Q11. Explain the relationship between marginal cost and average cost with the help of a
cost schedule and diagram.
Q12. Explain the concept of PPC with the help of a diagram.
Q13. Explain how the supply of a commodity is affected by a change in price of other
Q14. Explain with the help of diagram, the geometric method of measuring price elasticity
of demand.
Q15. Suppose that a sole proprietorship is earning total revenue of Rs 1,00,000 and is
incurring explicit cost of Rs 75,000. If the owner could work for another company for
30,000 a year, would you conclude that the firm is incurring an economic loss or economic
Q17. What is meant by consumer equilibrium? State its condition in case of two
commodities given by the utility approach.
Q18. Explain the implications of the following features of a perfectly competitive market.
a) Large number of buyers and seller. b) Freedom of entry and exit.
c) Homogenous product.
Q19. What is market supply? What is the effect on the market supply of a good when
(i) the government imposes a tax (ii) the government gives a subsidy on the production of
the good?
Q20. How will an increase in the income of the consumer of an inferior good affect its
equilibrium price and quantity demanded? Explain the chain of reaction of this change
with the help of a diagram.
Q21. Explain different situations/conditions under which a budget line shifts. Use diagram.
Q22. Why is the total revenue curve of a price taking firm an upward sloping straight line?
Why does the curve pass through the origin.
Q23. How is PPC affected by unemployment in an economy? Explain.
Q24. Explain the effect of technological changes on the supply of a commodity. Use
Q25. If the market demand for agricultural commodities is price-elastic, would a bad
harvest lead to an increase or a decrease in the incomes of the farmers as a group? Why?
Q26. Give the meaning of perfectly elastic and perfectly inelastic demand for a commodity.
Show their respective demand curves.
Q27. Explain the features of monopolistic competition.
Q28. Prepare a schedule based on imaginary data about TR, AR and MR assuming that
the price is same at all the levels of output.
Q29. If at a given price, there is excess demand for a commodity, how will equilibrium
price be reached? Explain with the help of a diagram.
Q30. Explain consumer’s equilibrium using indifference curve analysis.
Q31. When is the demand for a commodity said to be elastic?
Q32. What is meant by market period?
Q33. Mention one determinant of demand for a commodity other than the price of the
Q34. What is the value of elasticity of demand on a rectangular hyperbola demand curve?
Q35. Draw a demand curve with unitary price elasticity.
Q36. When does a demand curve shift?
Q37. Explain the problem of “how to produce”.
Q38. Discuss three properties of Indifference curve.
Q39. Differentiate between movement along the supply curve and shift in supply curve with
the help of diagrams.
Q40. What is substitution effect? How does number of substitutes of a commodity affects
its price elasticity?
Q41. Explain four causes of the leftward shift of the supply curve.
Q42. An ice-cream seller sells ice-creams for Rs 40 each. Rahul, who loves ice-cream has
already eaten 4. His marginal utility from eating 4 ice-creams is 120. Suppose that the
marginal utility one rupee is 4. Should he eat more ice-cream or should he stop?
Q43. Define Oligopoly. Explain the features of Oligopoly.
Q44. How is equilibrium price of a good determined? Explain with the help of diagram a
situation when both demand and supply curve shift to the right but equilibrium price
remains the same.
Q45. Explain the relationship between ATC, AVC, and MC with the help of suitable
Q46. What will be the effect of the following on the demand for the commodity:
a) A change in the income of the consumers.
b) A change in the price of related goods.
c) A change in taste and preferences of the consumers ?