Class 11 - Economics Introduction to Microeconomics & Central Problems Test 01 Question No, 1 to 6 are based on the given text. Read the text carefully and answer the questions: ‘Think for a moment, if you had all the money inthe world, where would you live? I’ probably not where you're living today. You have probably made a housing decision based on scarcity. What location did you pick? Given limited time, ‘you may have chosen to live close to work or school. Given the demand for housing, some locations are more expensive than others, though, and you may have chosen to spend more money for a convenient location or to spend less money for 2 place that leaves you spending more time on transportation. There is a limited amount of housing in any location, so ‘you are forced to choose from what’s available at any time. Housing decisions always have to take into account what someone can afford, Individuals making decisions about where to live must deal with limitations of financial resources, ions created by bi available housing options, time, and often other res regulations. A decision to produce one good requires a decision to produce less of some other good. So choice involves sacrifice. ‘Thus every society is faced with the basic problem of deciding what itis willing to sacrifice to produce the goods it ‘wants the most. lers, landlords, city planners, and government 1, What does scarcity mean? a. People are seared. b. None of these «Too much of something. 4. There is not enough of something 2, Statement 1: Economic problem arises when no alternative use is available. Statement 2: Choosing one alternative and not choosing the other is a problem of choice. a. Statement 1 is incorrect and statement 2 is correct b, Statement 1 is correct and statement 2 is incorrect c. Both the statements are correct 4. Both statements are incorrect 3. You have probably made a housing decision based on scarcity. Because of this scarcity, what do we have to make? a. money b. products c.None of these 4. choices ‘To practice more questions & prepare well for exams, download myCBSEguide App. It provides complete study ‘material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams. Teachers can use Examin8 App to create similar papers with their own name and logo. 4, What is the main economic problem in the economy based on the above text? a. scarcity b. All ofthese 00 many resources 4. not enough needs 5. How is the value of the location of housing will be decided? 4. By looking only at the monetary cost. b. By looking at the benefit. ¢. None of these4, By looking at the missed opportunity. 6. Every time we make an economic choice like in the above para choice between the location of housing, what two things ‘occur based on such choice? A benefit and profit, b. A profit and a loss. . None of these 4. A benefit and a cost. 7. What isthe other name for opportunity cost in economics a, Marginal cost b. Total Cost ‘¢. Economic problem 4, Economic cost 8, Which of the following is an example of microeconomics? a. General Price level b. Price of a commodity «Income and employment 4, National income {9, Which of the following is not concerned with the problem of choice? 4, Alternative use of resources b, Excessive income . Unlimited wants 4, Limited (scarce) resources 10, When an economy is operating on the PPC, it indicates: 4, potential output < actual output b. potential output = actual output . potential output > actual output 4. none of these - Assertion (A): The government is planning to introduce a bill forthe contro ofthe population in India. This type of decision is covered in positive economics. Reason (R): Positive economies concems with the description and explanation of economic phenomenon. 4 Both A and R are true and R is the correct explanation of A. b. Both A and R are true but R is not the correct explanation of A. A is true but R is false, 1 4. A\Is false but R is true, 12, Assertion (A): Indian economy was labelled as the non-agricultural economy. Reason (R): When one is talking about the Indian economy one is referring to the nature and level of production, Consumption, investment and exchange in India, 4. Both A and R are true and R is the correct explanation of A. b. Both A and R are true but R is not the correct explanation of A. cA true but R is false, 4. Ais false but Ris true, 13, State True or False: 4, For whom to produce is a problem concerned with the distribution of income, a.Twe . False ’ The production possibility curve is normally a straight line,a. Thue b. False 14, Fill in the blanks: 4, Microeconomics main instruments are ‘and supply. b. ‘of transformation is the slope of production possibility curve. ‘To practice more questions & prepare well for exams, download myCBSEguide App. It provides complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams. Teachers can use Examin8 App to create similar papers with their own name and logo, 15, Why isthe study of consumers equilibrium a subject matter of microeconomics? 16. Give two examples of growth of resources. 17. What is Marginal Rate of Transformation? Explain with the help of an example. 18, i, Do you think the actual level of output in the Indian economy is less than its potential level? ii, Does it mean that the level of our PPC could be higher than what itis now? 19, Define Production Possibility Curve and state its properties. 20, Giving reason, comment on the shape of Production Possibil Curve based on the following schedule. Good x (units) 0 1 2 3 4 Good ¥ (units) 30 27 2 2 0Class 11 - Economics Consumer’s Equilibrium - Utility & Indifference Curve Test 01 Question No. 1 to 6 are based on the given text. Read the text carefully and answer the questions: ‘When consumers make choices about the quantity of goods and services to consume, itis presumed that their objective is to maximize total utility. In maximizing total utility, the consumer faces a number of constraints, the most important of ‘hich are the consumer's income and the prices of the goods and services that the consumer wishes to consume, The consumer's effort to maximize total utility, subject to these constraints, is referred to as the consumer's problem. The solution to the consumer's problem, which entails decisions about how much the consumer will consume of a number of ‘goods and services, is referred to as consumer equilibrium, Itis the state of balance obtained by end-users of products, which refers to the number of goods and services they can buy with their existing level of income and the prevailing level of cost prices. CConsumer’s equilibrium permits a consumer to get the most satisfaction possible from his income. Units of X Px Marginal utility Difference maximum 1 10 20 10 2 10 16 6 3 10 10 0 4 10 4 6 5 10 0 10 6 10 6 “16 1, Statement 1: If MUm rises and Px is constant the consumer will find his equilibrium only if MUx ris Statement 2: The consumer is in equilibrium when given his income and market prices he plans his expenditure in such ‘a manner that he minimizes his total expenditure. 4 Both the statements are correct b, Statement 1 is correct and statement 2 is incorrect . Statement 1 is incorrect and statement 2 is correct, 4. Both the statements are incorrect 2. Determine consumer equilibrium unit from the above table as shown. S. a.2unit b.4 unit .Sunit 4.3 unit 3. Noor continues to buy goods X. She reached equilibrium as shown from the above table. After that, she continues to purchase more units. After equilibrium unit 2. total gains will rise », total losses will fall total gains will fall 4. total losses will rise4, Sidharth (a customer) buys good X from the market. Various factors are to be kept while buying a commodity. Which of the following factors are not to be taken in course by Sidharth while purchasing goods based on the above text? a. Marginal utility of money b, Price of substitute . Price of the commodity 4, Marginal utility of the commodity 5. Ina situation when MRS > Px/Py, the consumer would react by: a, Increasing the consumption of commodity-y b, Increasing the consumption of commodity-x . None of these 4, Diminishing the consumption of commodity-x 6. Which of the following is true if Clarice is at her consumer equilibrium at 3 units as shown in table? i, Clarice is on her budget line. ii, Clarice is on her highest atainable indifference curve. i. Clarice is i ait and iti b. tit only ing her budget equally across all goods. cionly diiand it 7. Which of the following statements regarding utility is not true? a. Itis purely a subjective entity, b. Ttisa sat . Ithelps consumers to make choices. . Utility is always measurable. 8. A shift in the budget line, when prices are constant, is due to: a. change in income ». change in utility change in dema 4, change in preferences, ‘9, What is the value of marginal utility at the point of satiety? a. Maximum b, Minimum, c. Negative 4. Zero 10, What does monotonicity of preferences imply? a Consumer always prefer bundle giving minimum satisfaction 18 power of a commodity. ». Consumer always prefer bundle giving maximum satisfaction . Consumer will not prefer bundle giving maximum satisfaction 4. Consumer always prefer bundle giving same satisfaction 11, Assertion (A): Equilibrium occurred only at the point where the price line intersects the indifference curve and not the point below the intersection. Reason (R): At any point below the intersection the consumer is getting the same amount of good as the point of intersection he is getting a lesser amount of another good. a. Both A and R are true and is the correct explanation of A. b, Both A and R are true but R is not the correct explanation of A. c. Ais true but R is false.12, 13, 14, 15, 16, 17, 18, 19 20. d. A is false but R is true. Assertion (A): Marginal rate of substitution is diminishing, ‘Reason (R): As the consumer is having more and more of Good!, his intensity of desire to have it tends to fall down, a. Both A and R are true and R is the correct explanation of A. b, Both A and R are true but R is not the correct explanation of A, ¢. Ais true but Ris false. d. Ais false but R is true. State True or False: ‘a. A consumer strikes his equilibrium when: MRSxy- &. a. True b. False b. An increase in income of the consumer is the only cause that leads to a parallel shift of budget line to the right. a. Tue b. False Fill in the blanks: a 4s defined as the difference between what the consumer is willing to pay for a product and what he actually pays. b. A movement along a given indifference curve is known as ‘To practice more questions & prepare well for exams, download myCBSEguide App. It provides complete study material for CBSE, NCERT, JEE (main), NEET-UG and NDA exams. Teachers can use Examin8 App to create similar papers with their own name and logo. Define an indifference map. Define indifference curve. Define ar How is equilibrium of the consumer affected when MUm happens to rise and Px is constant. Define Marginal Rate of Substitution. Why is an Indifference Curve convex? ‘What do you understand by consumer's equilibrium? Give logical reasoning as to how he reaches his state of difference curve, Why is it convex to the origin? equilibrium.