SVPrecis Book Num 01_Micro & Macro Economics_Numerical

1. 2. 3. 4. 5. 6.

At the per unit price of Rs. 10, demand for a commodity is 100 units. When the price falls to Rs. 8 per unit, demand expands to 150 units. Calculate elasticity of demand. [Ans. Ed = 2.5] A consumer spends Rs. 80 on a commodity when its price is Re. 1 per unit and spends Rs. 96 when its price is Rs. 2 per unit. What is price elasticity of demand for the commodity? [Ans. Ed = 0.4] The demand by a consumer for a commodity declines by 10% when its price increases from Rs.5 to Rs. 6 per unit. What is price elasticity of demand for the commodity [Ans. Ed = 0.5] As a result of 5 per cent fall in the price of food, its demand rises by 12%. Find out price elasticity of demand and say demand is elastic or inelastic and why. [Ans. Ed = 2.4] Price of a good falls from Rs. 10 to Rs. 8. As a result its demand rises from 80 units to 100 units. What can you say about price elasticity of demand by total expenditure method? [Ans. Total expenditure = 800] Price elasticity of demand for goods X and Y is known to be 1 and 2 respectively. Price of good X rises by 5% while that of good Y falls by 5%. What are percentage changes in quantities of X and Y? [Ans. % Q of X is 5 & of Y is 10.] The coefficient of price elasticity of demand of a commodity is 5. When its price is Rs. 10 per unit, its quantity demanded is 40. If price falls to Rs 5 per unit, how much will be its quantity demanded? [Quantity demanded = 50] The price elasticity of demand for a commodity is 2. A household demands 20 units of the commodity when its price is Rs. 5. How many units of the commodity will the household demand when its price falls to Rs. 4 per units? [Ans. Demand by the household = 28 units] A consumer buys 100 units of good X at Rs. 5 per unit. The price elasticity of demand for the good is 2. At what price will he be willing to buy 140 units of the good. [Ans. 140 units at reduced price of Rs.4 per unit] A consumer buys 10 units of good X at a price of Rs. 5 per unit. The price elasticity of demand for this good is 2. Price falls to Rs. 4 per unit. How many units of good X will he now buy at this price? [Ans. Consumer will buy 14 units.] The market demand for a good at Rs. 4 per unit is 100 units. The price rises and as result its market demand falls to 75 units. Find out the new price if the price elasticity of demand of that good is (-1).[Ans. New price = Rs. 5 per unit] A consumer buys 160 units of a good at a price of Rs. 8 per unit. Price falls to Rs. 6 per unit. How much quantities will the consumer buy at the new price if price elasticity of demand is (-) 2? [Ans. The consumer will buy 240 units at new reduced price] At a price of Rs. 20 per unit, the quantity demanded of a commodity is 300 units. If price falls by 10%, its quantity demanded rises by 60 units. Calculate its price elasticity. [Ans. Ed = 2] The price elasticity of demand is 2. The % change in price is equal to 5. What is % change in quantity? [Ans. % change in quantity = 10] The price elasticity is 0.5. The % change in quantity is 4. What is % change in price? [Ans. % change in price= 8] As the price of peanut packets increases by 5%, the number of peanut packets demanded falls by 8%. What is elasticity of demand for peanut packets? [Ans. Ed = 1.6] At price of Rs. 4 per unit a consumer buys 50 units of a goods. The price elasticity of demand is 2. How many units will the consumer buy at Rs. 3 per unit? [Ans. The consumer will buy. 75 units] The quantity demanded of a commodity at price 8 per units is 600 units. Its price falls by 25% and quantity demanded rises by 120 units. Calculate Ed Is its demand elastic? Give reasons for your answer. [Ans. Ed = 0.8]

7.

8.

9. 10.

11. 12.

13. 14. 15. 16. 17. 18.

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19.

At price of Rs. 50 per unit, quantity demanded of a commodity is 1000 units. When its price falls by 10%, its quantity demanded rises to 1080 units. Calculate price elasticity of demand. Is demanded inelastic? Give reasons for your answer. [Ans. Ed = 0.8] Price elasticity of demand of a good is 3.80 units of this good are bought at a price of Rs.5 per unit. How much units will be bought at a price of Rs. 4 per unit? Calculate. [Ans. 128 units] A consumer buys 40 units of a good at a price of Rs. 3 per unit. When price rises to Rs. 4 per unit, he buys 30 units. Calculate Ed by the expenditure method. [Ans. Ed = 1] A consumer buys 80 units of a good at a price of Rs. 5 per unit. Suppose price elasticity of demand is (-2), at what price will he buy 64 units? [Ans. Rs. 5.50] If price of sugar rises from Rs. 16 per kg to Rs. 18 per kg, the quantity supplied expands from 100 kg to 150 kg. What is elasticity of supply of sugar? [Ans. Es = 4] Calculate elasticity of supply when price falls from Rs. 6 to Rs. 4 per unit. Price (per unit) Supply (units) 6 5000 5 4000 4 3500 3 2000

20. 21. 22. 23. 24.

[Ans. Es = 0.9]

25. 26.

When price of a commodity increases from Rs. 10 to Rs. 12 per unit, its supply goes up from 100 units to 140 units. Calculate elasticity of supply. [Ans. Es = 2] A seller of potatoes sells 80 qtls. A day when the price of potatoes is Rs. 4 per kg. The price elasticity of supply of potatoes is known to be 2. How much quantity of potatoes will the seller supply when the price to Rs. 5 per kg. [Ans. Seller will supply 120 qtls.] If price of a commodity falls from Rs. 60 per unit to Rs. 58 per unit, its supply expands from 300 to 400 units. Find out its elasticity of supply. [Ans. Es = 10] The coefficient of elasticity of supply of a commodity is 3. A seller supplies 20 units of this commodity at a price of Rs. 8 per unit. How much quantity of this commodity will the seller supply when price rises by Rs.2 per unit? [Quantity supplied = 35] Price elasticity of supply of a good is 5. A producer sells 500 units of good at a price of Rs. 5 per unit. How much will he be willing to sell at the price of Rs. 6 per unit? [The seller will sell 1,000 units] The price of a commodity is Rs. 10 per unit and its quantity supplied at this price is 500 units. If its price falls by 10% and quantity supplied falls to 400 units, calculate its price elasticity of supply. [Price elasticity of supply = 2] At a price of Rs. 8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of supply is 1.5. If its price rises to Rs. 10 per unit, calculate its quantity supplied at new price. [Quantity supplied at new price = 275 units] The price elasticity of supply of a commodity is 2.5. At a price of Rs. 5 per unit, its quantity supplied is 300 units. Calculate quantity supplied at a price of Rs. 4 per unit. [Quantity supplied = 150 units] The price of a commodity is Rs. 12 per unit and its quantity supplied is 500 units. When its price rises to Rs. 15 per unit, its quantity supplied rises to 650 units. Calculate its price elasticity of supply. Is supply elastic? [Price elasticity of supply is = 1.2] The quantity supplied of a commodity at a price of Rs. 8 per unit is 400 units. Its price elasticity is 2. Calculate the price at which its quantity supplied will be 600 units. [New price = Rs. 10] When the price of a commodity falls from Rs. 10 per unit to Rs. 9 per unit, its quantity supplied falls by 20 per cent. Calculate its price elasticity of supply. [Ans. Es = 2]

27. 28.

29. 30.

31.

32. 33.

34. 35.

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36. 37. 38.

The price of a commodity is Rs. 5 per unit and its quantity supplied is 600 units. If its price rises to Rs. 6 per unit, its quantity supplied rises by 25%. Calculate its price elasticity of supply. [Ans. Es = 1.25] Elasticity of supply of a commodity is 2. When its price falls from Rs. 10 to Rs. 8 per unit, its quantity supplied falls by 500 units calculate quantity supplied at reduced rate. [Quantity supplied 750 units] When the price of a commodity rises from Rs. 10 to Rs 11 per unit, its quantity supplied rises by 100 units. Its price elasticity of supply is 2. Calculate its quantity supplied at increased price. [Quantity Supplied at increased price = 600 units.] A firm sells 1000 units of a product at price of Rs. 10 per unit. Its price elasticity of supply is 3. How many units will the firm be able to sell if price falls to Rs. 7.50 per unit? [The firm will be able to sell 250 units.] The supply of a commodity at a price of Rs. 20 is 50 units. A 10% rise in its price results in a 15% rise in its supply. Calculate its price elasticity of supply. Is its supply elastic? [Ans. Es = 1.5] Calculate the elasticity of supply whena. The price of a commodity rises from Rs.10 to Rs.15 and the supply increases from 50 to 100 units. b. The price of a commodity falls from Rs.15 to Rs.10 and the supply decreases from 100 to 50 units. From the following supply schedule, calculate price elasticity of supply if the price falls from Rs.5 per unit to Rs. 3 per unit. Price per unit (Rs.) Quantity per unit of time (kg) 6 6000 5 5500 4 4500 3 3000 2 0 [Ans. 1.14] The coefficient of elasticity of supply of a commodity A is 3. How much quantity of the commodity will a seller supply at the price or Rs. 4 per unit if he supplies 30 units @ Rs. 3 per unit? [Ans. 60 units] A seller of potatoes sells 80 quintals a day when the price of potatoes is Rs. 4 per kg. Price elasticity of potatoes is known to be 2. How much quantity of potatoes will the seller supply when price rises to 5 kg. [Ans. 120 quintals] If price of a commodity falls from Rs. 60 per unit to Rs. 58 per unit, its supply expands from 300 to 400. Find out its elasticity of supply [Ans. 10] The coefficient of elasticity of supply of a commodity is 2. A seller supplies 20 units of this commodity at a price of Rs. 10 per unit. How much quantity of this commodity will the seller supply when price rises by Rs. 12 per unit? [Ans. Rs. 68 units.] Price elasticity of supply of good is 5. A producer sells 500 units of a good at a price of Rs. 5 pre unit. How much will he be willing to sell at the price of Rs. 6 per unit? [Ans. 1000units] From the following table calculate the price elasticity of supply when price rises from Rs. 2 to 3. Price (in Rs. per Kg) 1 2 3 4 5 Supply by firm A 35 37 40 44 48 [Ans eS = 0.2] From the following data on the cost of production of a firm, calculate (i) AFC, and (ii) AVC of producing five units of output. Unit of output (Number) 0 3 Total cost (Rs. thousand) 80 104

39. 40. 41.

42.

43. 44.

45. 46.

47. 48.

49.

5 120

50.

Complete the following table: Units of output TC

TFC

TVC

MC

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0 1 2

150 180 200

51.

Cost function of firm is given below, find out (i) TFC, (ii) TVC, (iii) AFC, (iv) AVC, and (v) MC. Output (units) 0 1 2 3 4 5 6 Cost (Rs.) 60 80 100 111 116 130 150 Complete the following Output (units) TC AFC 1 20 6 2 26 3 3 39 2 AVC MC

52.

53.

The following table shows total cost of production of a firm at different levels of output. Find out AVC and MC at each level of output. Output (units) 0 1 2 3 Total cost (Rs.) 60 100 130 150 The following table shows MC at different levels of output by a firm. Its TFC are Rs. 120. Find its ATC and AVC at each level of output. Output (units) 1 2 3 MC (Rs.) 40 30 26 Given that total fixed cost is Rs. 60, complete the following table. Output (Units) AVC (Rs.) TC (Rs.) 1 20 2 15 3 20 MC (Rs.)

54.

55.

56.

The fixed costs of a firm are Rs. 60. Its marginal cost at different levels of output is given below. Calculate ATC and AVC. Output (units) 1 2 3 4 MC (Rs.) 30 26 28 32 The table given below shows TC of a firm at different levels of output. Calculate MC and AVC at each level of output. Output (units) 0 1 2 3 4 Total cost (Rs.) 100 160 212 280 356 A firm is producing 20 units. At this level of output, ATC and AVC are respectively equal to Rs. 40 and Rs. 37. Find out TFC of this firm. Calculate TVC, TFC, AVC, ATC & MC if AFC of one unit of production is Rs. 60. Output 1 2 3 4 5 6 7 8 TC 90 105 115 120 135 160 200 260 A firms fixed cost is Rs. 2000. Compute TVC, AVC, TC and ATC from the following table: Output (units) 1 2 3 4 5 6 7 MC (Rs.) 2000 1500 1200 1500 2000 2700 3500 Suppose that a firms TFC is Rs. 100 and MC schedule of a firm is the following: Output (units) 1 2 3 4 5 6 7 MC (Rs.) 10 20 30 40 50 60 70

57.

58.

59.

60.

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Is the MC curve U-shaped? Derive AVC schedule. Will the AVC curve be U-shaped? Discuss why or why not.

62.

From the following table calculate AVC of each given level of output. Output (units) MC (Rs.) TC AVC (Rs.) 1 40 40 40 2 30 70 35 3 35 105 35 4 39 144 36 Given that fixed cost is Rs. 20. Calculate (a) TVC, and (b) TC from the following. Output (units) 0 1 2 3 MC (Rs.) 0 10 15 25 Complete the following table: Outputs (units) TC (Rs.) 0 80 1 180 2 270 3 350 4 440 AVC (Rs.) MC (Rs.)

63.

64.

65.

Calculate total variable cost and marginal cost at each given level of output from the following table: Output (units) 0 1 2 3 4 TC (Rs.) 30 48 65 81 98 Calculate TVC and MC at each given level of output from the following table: Output (units) 0 1 2 3 4 Total cost (Rs.) 40 60 78 97 124 TFC of a firm is Rs. 12. Given below is its MC schedule. Calculate TC and AVC for each given level of output. Output (units) 1 2 3 4 5 6 Marginal cost (Rs.) 9 7 2 4 8 12 Calculate TC and AVC of a firm at each given level of output from its cost schedule. Output (units) 1 2 3 4 5 6 AFC (Rs.) 60 30 20 15 12 10 MC (Rs.) 32 30 28 30 35 43

66.

67.

68.

69.

Calculate TVC and total cost form the following cost schedule of a firm whose fixed costs are Rs. 10 Output (units) 1 2 3 4 Marginal cost (Rs.) 6 5 4 6 Calculate MC and TC from the following cost schedule of a firm whose total fixed costs are Rs. 15 Output (units) 1 2 3 4 Total variable cost (Rs.) 10 19 29 40 A firms AFC of producing 2 units of good is Rs. 9 and its total cost schedule is given below. Calculate AVC and MC for each of given level of output. Output (units) 1 2 3 Total cost (Rs.) 23 27 30 Fill in the following table continuing data about TR, AR and MR.

70.

71.

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Units sold 1 2 3 4 5 6 7 8

TR 10 24 30 30 28 TR 100 96 84 64

MR 10 4 0 -4 MR -

AR 9 7 6 4 3

73.

Complete the following table: AR units sold 10 11 9 12 13 7 14 15 5 16 -

74.

Calculate TR, AR and MR from the following data: Price per unit (Rs.) 1 2 3 4 Units sold 10 9 8 7

5 6

6 5

7 4

75.

A seller can sell 3 diamond rings at a price of Rs. 12,000 each. If he sells 4, his marginal revenue will be Rs. 10,500. Calculate the price at which he can sell four rings. [Ans. Price (AR) at which 4 rings can be sold = 11,625] From the TR Schedule of a seller given below, calculate AR and MR for 6 units. Is this seller in a perfectly competitive market? Quantity sold 5units 6 units TR (Rs.) 300 330 Complete the following table: Units of output TR (Rs.) 1 2 3 Complete the following table: Units of output TR (Rs.) 1 2 3 AR (Rs.) 10 9 9 MR (Rs.)

76.

77.

78.

AR (Rs.)

MR (Rs.) 10 8 6

79.

From the table given below, calculate TR, AR and MR. Units sold 3 4 5 Price (Rs.) 10 9 8 From the table given below, calculate TR, AR and MR. Price (Rs.) 6 7 8 Units sold 5 4 3 Calculate TR, MR & AR when each unit of commodity can be sold at Rs. 5 Quantity sold 1 2 3 4 5 6 7

80.

81.

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82.

A firms TR schedule is given in the following table. What is the product price facing the firm? Output 1 2 3 4 5 TR (Rs.) 7 14 21 28 35 Calculate price and TR from the following data: Units of output 1 2 3 4 MR (Rs.) 20 16 9 3 A perfectly competitive firm faces market price equal to Rs.15. a. Derive it TR schedule for range of output from 0 to 10 units, b. Suppose market price increases to Rs. 17. Will the new TR curve flatter of steeper? The demand schedule facing a monopoly firm is given below. Derive its TR, AR, MR. Price (Rs.) 0 10 20 30 40 50 60 70 Demand (units) 8 7 6 5 4 3 2 1 The MR schedule of a monopoly firm is given below. Derive TR and AR schedules. Output (units) 0 1 2 3 4 5 6 7 MR (Rs.) 14 10 7 5 0 -3 -5 Calculate TR (Rs.) and MR (Rs.) Output (units) 1 2 Price (Rs.) 12 10 Complete the following table: Output (units) Price (Rs.) 1 2 9 3 4 Complete the following table:
Output (units) 1 2 3 4 5 Price (Rs.) 10 8 MR (Rs.)TR (Rs.) 10 8 0 10 20

83.

84.

85.

86.

87.

3 8

4 6 TR (Rs.) 24 -

88.

MR (Rs.) 10 4

89.

90.

An economy produces two goods, T-Shirts and Cell phone. The following table summarizes its production possibilities. Calculate the marginal opportunity cost of T-shirt at various combinations. T-shirts (in millions) 0 1 2 3 4 5 Cell phones (in thousands) 90,000 80,000 68,000 52,000 34,000 10,000

91.

A persons marginal utility schedule is given below. Derive her total utility schedule. Amount Consumed 0 1 2 3 4 5 Marginal Utility 10 25 38 48 55 Estimate MU schedule from TU Schedule Units of X 1 2 3 4 TUX 100 190 260 310 Derive TU Schedule from MU Schedule. Units of X 0 1 2 3 MU 40 30 20 5 350 4 10 5 6 6 -2

92.

93.

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94.

Complete the following Amount of X 1 2 3 4 5

TU 50 90 140 155

MU 50 30 5 45 6 51 7 56 8 60

95.

Derive MU Schedule from TU Schedule. Units of X 1 2 3 4 TU 11 21 30 38 Derive TU Schedule from MU Schedule. Amount Consumed 1 2 3 MU 14 12 10

96.

4 8

5 6

97.

The amount of good X is given with its TU. Calculate MU of it. Amount of X 1 2 3 4 5 TU 10 18 24 28 30 Find the demand schedule of firm N from the following data. Price (Rs.) Firm M Firm R 10 20 10 9 25 15 8 30 20 7 35 25 6 40 30 5 45 35 Firm N Market Demand 58 62 75 82 90 105 Market Demand -

98.

99.

Calculate market demand from the following information: Individual Demand Schedule Price (Rs.) Firm A Firm B Firm C 4 5 8 10 3 6 11 12 2 7 12 13 1 8 15 14

100.

There are four consumers of a fruit called smile. They are Saras, Vidya, Wati and Ibema. Their demand curves for Smile are given below Derive the market demand curve. Price (Rs.) Quantity Quantity Quantity Quantity Demanded by Demanded by Demanded by Demanded by Saras Vidya Wati Ibema 1 16 7 15 8 2 11 6 12 6 3 7 5 9 4 4 4 4 6 2 5 2 3 3 0 6 1 2 0 0

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101.

There are three consumers in a particular market: Lender, Andre and Tim. Their demand schedules are given in the following table: Price Quantity demanded by Quantity Demanded by Quantity Demanded by Leander Andre Tim 1 60 55 24 2 50 40 13 3 40 25 5 4 30 10 0 5 20 0 0 Calculate Market Demand from the following: Price Demand of Demand of (Rs) Household A Household B 7 6 5 4 3 6 8 12 18 24 9 12 17 20 32 Demand of Household C 11 15 22 30 40 Market Demand

102.

103.

Three households A, Band C form the demand schedule for the market and that for household A and B determines the demand schedule for C. Price (Rs.) Demand of Demand of Demand of Market Demand Household A Household B Household C 30 0 25 35 25 10 30 60 20 20 35 85 15 30 40 110 10 40 45 135 5 50 60 160 Given two demand schedules; determine their elasticity of demand using the total expenditure method. P 5 4 3 2 1 QA 200 210 230 255 300 QB 200 260 370 600 1300 A 20% fall in the price of sugar leads to 25% rise in its demand. Calculate the price elasticity of demand. Comment on the commodity. [Ans. Ed = 1.25] When the price of wheat goes up by 10% its demand falls from 800 units to 600 units. Calculate price elasticity of demand. Will the demand curve for the wheat be flatter or steeper? [Ans. Ed = 2.5] A consumer spends Rs. 40 on a good at a price of Re.1 per unit and Rs. 60 at a price of Rs. 2 per unit. What is the price elasticity of demand? What kind of good it is? What shape its demand curve will take? [Ans. Ed = 0.25] Price of rice falls from Rs. 5 to Rs. 4 per kg. This leads to an increase in its demand from 10Kg to 20 kg in a month. Comment on its elasticity of demand. [Ans. Ed = 5] A decline in the price of good Y by Rs. 5 causes an increase of 20 units on its demand which goes up to 50 units. The new price is Rs. 15. Calculate Ed. [Ans. 2.6] Determine price elasticity of demand using percentage method. [Ans. eD. 2.5] Quantity Total Outlay (Rs.)

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105. 106. 107.

108. 109. 110.

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20 30

100 120

111. 112. 113.

The price elasticity is 0.5. The % change in quantity is 4. What is the % change in price? [Ans. % change in price= 8] Price of good X rises from Rs. 20 to Rs. 30 per unit. Consequently, its demand falls by 20 units and becomes 100 units. Determine price elasticity of demand. [Ans. Ed = 0.33] Originally, a product was selling for Rs. 10 and the quantity demanded was 1,000 units. The product price changes to Rs. 14 and as a result the quantity demanded changes to 500 units. Calculate the price elasticity. [Ans. Ed = 1.25] The price elasticity is 2. The % Change in price is equal to 5. Find the % change in quantity. [Ans. % change in quantity = 10] Let the demand function be: Q = 10-2P. Find eD at a price of 5 / 2. [Ans. Ed = 1] Let Ed = -0.4. By what percentage the quantity demanded goes down if price of the good increases by 4%? [Ans. % fall in quantity demanded is 0.4 x 4 = 1.6%] The market demand for a good at a price of Rs. 10 per unit is 100 units. When its price changes its market demand falls to 50 units. Find out the new price if the price elasticity of demand is (-) 2. [Ans. Rs. 12.50] A consumer buys 160 units of a good at a price of Rs. 8 per unit. Price falls to Rs. 6 per unit. How much quantity will the consumer buy at a new price if price elasticity of demand is (-) 2? [Ans. 240 units] A consumer buys 200 units of a good at a price of Rs. 5 per unit. When the price changes he buys only 100 units. If price elasticity of demand is (-1), find the changed price. [Ans. Rs. 7.50] When the price of a commodity is Rs. 20 per unit, its quantity demanded is 800 units. When its price rises by Rs. 5 per unit, its quantity demanded falls by 20 percent. Calculate its price elasticity of demand. Is its demand elastic? Give reasons for your answer. [Ans Ed =- 0.8] When the price falls from Rs. 20 per unit to Rs. 16 per units, its quantity demanded rises from 1000 units to 1160 units. Calculate Ed. Is it inelastic? Give reason. [Ans. Ed = 0.8] Price elasticity of demand is (-) 2.40 units of this good are bought at a price of Rs. 10 per unit. How many units will be bought at a price of Rs.11 per unit. Calculate. [Ans. 32 units] The quantity demanded of a commodity at a price of Rs. 8 per unit is 600 units. Its price falls by 25 percent and quantity demanded rises by 120 units. Calculate its price elasticity of demand. Is its demand elastic? Give reason for your answer. [Ans. Ed = 0.8] A consumer buys 80 units of a good at a price of Rs. 5 per unit. Suppose price elasticity of demand is (-) 2. At what price will he buy 64 units? [Ans. Rs. 5.50] Price of a good rises from Rs. 10 per unit to Rs. 11 per unit As a result, quantity demanded of that good falls by 10 per cent. Calculate its price elasticity of demand. [Ans. Ed = 1] Price of a good falls from Rs. 6 to Rs. 3 per unit. As a result, its demand rises from 30 units to 60 units. Find out price elasticity of demand by the Total Expenditure method;. [Ans. Ed =2] A consumer buys 50 units of a goods at a prices of Rs.10 per unit. When price falls to Rs.5 per unit he buys 100 units. Find out price elasticity of demand by the Total Expenditure Method. [Ans. Ed =2] A consumer buys 40 units of a good at a price of Rs.3 per unit. When price rises to Rs.4 per unit he buys 30 units. Calculate price elasticity of demand by the total expenditure method. [Ans. Ed=0.75] A consumer buys 70 units of a good at a price of Rs.7 per units. When price falls to Rs.6 per unit he buys 90 units. Use Total Expenditure Method to find whether the demand for the good is elastic or inelastic.[.Ed = 2] When price of a good falls by 10 percent, its quantity demanded rises from 40 units to 50 units. Calculate price elasticity of demand by the percentage method. [Ans. Ed = 2.5]

114. 115. 116. 117. 118. 119. 120.

121. 122. 123.

124. 125. 126. 127. 128. 129. 130.

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131. 132. 133. 134. 135. 136. 137.

The price of a commodity rises from Rs. 10 to Rs. 12 and consequently the demand falls from 100 units to 80 units. Determine the price elasticity of demand for that commodity. [Ans. Ed =1] The price of a commodity Y falls from Rs. 4 to Rs. 3 per unit. This leads to an increase in the total expenditure on Y from Rs. 20 to Rs. 30 per month. Determine the elasticity of demand for Y. [Ans. Ed =4] With a 10% fall in the price of a commodity, the number of unit demanded rises from 20 to 25. Determine the price elasticity of demand. [Ans. Ed = 2.5] The price of good decreases from Rs. 10 to Rs. 5 per unit. If the price elasticity of demand for it is 3 and the original quantity demanded is 40 units, calculate the new amount demanded. [Ans. 100 units] A decline in the price of X by Rs. 2 causes an increase of 10 units in demand, which goes up to 60 units. The new price is Rs. 18. Calculate the Ed. [Ans. Ed = 2] If the elasticity of demand for salt is zero and a household demand 2 kg of salt in a month at Rs. 5 per kg, how much will it demand at Rs. 7.50 per kg? [Ans. 2 kg] Following are the demand schedules for commodities A and B. which one of them has a more elastic demand? Commodity A Commodity B Price Quantity DD Price Quantity DD 10 100 20 100 12 90 18 110 [Ans. Commodity A has Ed = 0.5, B has Ed =1] Determine price elasticity of demand by the total expenditure method. Price Total Expenditure 11 121 10 50 [Ans. Ed = 6] Following is the demand schedule for a commodity Y: Price 15 16 17 20 Demand 100 80 50 40 Calculate elasticity of demand when price rises form Rs. 15 to Rs. 20 and when price falls from Rs. 20 to Rs. 15. ` [Ans. Ed from Rs. 15 to Rs. 20 = 1.8, Ed from Rs. 20 to Rs.15 = 6] Determine price elasticity of demand using percentage method. Given are: Quantity Total Outlay (Rs.) 20 200 15 300 [Ans. Ed = 0.25] A consumer spends Rs. 80 on a commodity at a price of Re.1 per unit and Rs. 100 at a price of Rs. 2 per unit. What is the price elasticity of demand? [Ans. Ed = 0.375] The price of X falls from Rs. 5 to Rs. 4 and the quantity rises from 4 to 6 units. Calculate elasticity of demand. What would you say about the elasticity if quantity demanded remained unchanged? [Ans. Ed = 2.5] The price of a commodity rises from Rs.4 to Rs.20 per unit. Consequently, its demand falls by 40 units and becomes 80 units. Determine the elasticity of demand. [Ans. Ed = 1 /12] A consumer buys 10 units of a commodity when its price was Rs. 5 per unit. He purchases 12 units of the commodity when its price fell to Rs. 4 unit. What is elasticity of demand for the commodity at the price? [Ans. Ed = 2.5]

138.

139.

140.

141. 142.

143. 144.

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Learning Economics becomes a childs play. Prasanta Saha Sir

145. 146. 147. 148. 149. 150. 151. 152. 153. 154. 155. 156. 157.

Price of a good falls from Rs. 8 to Rs. 6. As a result, its demand rises from 100 units to 125 units. Find out Ed by percentage method. [Ans. Ed =1] Price of a good rises by 10%. As a result demand falls by 4%. Find out price elasticity of demand. Is this demand elastic or inelastic? [Ed = 0.4] As a result of 5% fall in the price of a good its demand rises by 12%. Find out price elasticity of demand and say whether demand is elastic or inelastic and why [Ans. Ed = 2.4] The co-efficient of price elasticity of demand of a commodity is 0.5. When it price is Rs. 10 per unit, its demand is 40 units. If the price falls to Rs. 5 per unit, how much will be the demand? [Ans. 50 units.] When price of a good rises from Rs. 5 per unit to Rs. 6 per unit, its demand falls from 20 units to 10 units. Compare expenditures on the good to determine whether demand is elastic or inelastic. [Ans. Ed >1] When price of a good falls from Rs. 8 per unit to Rs. 7 per unit, its demand rises from 12 units to 16 units. Compare expenditures on the good to determine whether demand is elastic or inelastic . [Ans. Ed >1] Price elasticity of demand of a good is (-) 1. At a given price the consumer buys 60 units of the good. How many units will the consumer buy if the price falls by 10 percent? [Ans. 66 units] Price elasticity of demand for a good is (-) 2. The consumer buys a certain quantity of this good at a price of Rs. 8 per unit. When the price falls he buys 50 percent more quantity. What is the new price? [Ans. Rs.6] Price elasticity of demand of a good is (-) 3. If the price rises from Rs.10 per units to Rs. 12 per unit, what is the percentage change in demand? [Ans. 60 percent] At a given market price of a good a consumer buys 120 units. When price falls by 50 percent he buys 150 units Calculate price elasticity of demanded. [Ans. Ed =0.5] A consumer buys a certain quantity of a good at a price of Rs.10 per unit. When price falls to Rs. 8 per unit, she buys 40 percent more quantity. Calculate price elasticity of demand. [Ans. Ed = 2] A consumer buys 8 units of a good at a price of Rs. 7 per unit. When price rises to Rs. 8 per unit, he buys 7 units. Calculate price elasticity of demand by comparing expenditure on the good. [Ans. Ed =1] The following table gives the AP of a factor. It is also known that the TP at zero level of employment is zero. Determine its TP and MP schedules. Level of Factor Employment 1 2 3 4 5 6 AP 50 48 45 42 39 35 [Ans. TP = 0,50,96,135,168,195,210 ; MP = -,50,46,39,33,27,15] Calculate APPs and MPPs of a factor. Also identify the various stages of production. Units of Labour 1 2 3 4 5 Total Physical Product 5 11 15 18 18 6 15

158.

159.

Identify the different output levels, which make the different phases of the operations of the law of variable proportions from the following data. Variable inputs 0 1 2 3 4 Total Physical Product 0 8 20 20 16 State and briefly explain the law underlying the change in output as the input is changed. Also identify the various stages in the change in total product. Units of Labour input 1 2 3 4 5 6 Total Physical Product 50 110 150 180 180 150

160.

161.

The following table gives the marginal product schedule of labour. It is given that product of labour is zero as zero level of employment. Calculate the total average product schedules of labour. L 1 2 3 4 5 6

12

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MPL

162.

The following table gives the average product schedule of labour. Find the total product and marginal product schedules. It is given that the total product is zero at zero level of employment. L 1 2 3 4 5 6 APL 2 3 4 4.25 3 3.5 Complete the following table: Unit of labour 0 TP MP AP 0 0 1 20 2 22 3 22 4 88 5 17 6 20

163.

164.

Identify the different phases of the law of variable proportions from the following schedule. Give reasons for your answer. Unit of variable input 1 2 3 4 5 T P (Units) 4 9 13 15 12 Calculate the AP and the MP of a factor the following table of TP schedule. Level of factor employment TP 0 0 1 5 2 12 3 20 4 28 5 35 6 40 7 42 The following table gives the MP of a factor. It is also known that the TP at zero level of employment is zero. Determine its TP and AP schedules. Level of Factor Employment MP 1 20 2 22 3 18 4 16 5 14 6 6 The following table gives the AP of a factor. It is also known that the TP at zero level of employment is zero. Determine its TP and MP schedules. Level of factor employment AP 1 50 2 48 3 45 4 42 5 39 6 35 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.

165.

166.

167.

168.

13

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Variable Inputs Total physical product

0 0

1 8

2 20

3 20

4 16

169.

State and briefly explain the law underlying the change in output as the input is changed. Also identify the various stages in the change in total product. Calculate APP and MPP Units of Labour input 1 2 3 4 5 6 Total output (units) 50 110 150 180 180 150

170.

In the following table identify the different phases of the law of variable proportions and also explain the causes: Variable input (units) 1 2 3 4 5 6 Total product (units) 10 22 32 40 40 35

171.

Total fixed cost is Rs. 90, complete the following table: Output (units) 1 Average Variable Cost (Rs.) 10

2 20

3 15

172.

Given that the total fixed cos is Rs. 60, complete the following table: Output (units) 1 2 Average Variable Cost (Rs.) 20 15 Given the total fixed cost is Rs. 90, complete the following table: Output (units) 1 2 Average Variable Cost (Rs.) 20 15 Given that the total fixed cost is Rs. 30, complete the following table: Output (units) 1 2 Average Variable Cost (Rs.) 20 15 Fixed cost of a firm is Rs. 60. Calculate ATC and AVC at each level of output. Output 1 2 3 MC (in Rs.) 30 26 28 Calculate MC and AVC at each level of output. Output 0 1 TC (Rs.) 100 160 2 212 2 118 5 260 6 340 7 3 280

3 20

173.

3 20

174.

3 20

175.

4 32 4 356 3 140 8 550

176.

177.

From the table find out AVC and MC at each level of output: Units 0 1 TC (Rs.) 80 100 A firms total cost schedule is given in the following table: Output (units) 0 1 2 3 4 Total Costs (Rs.) 40 120 170 180 a. What is the total fixed cost of this firm? b. Derive the AFC, AVC, ATC and MC schedules. 210

178.

440

179.

Complete the following table if the AFC at 1 unit of production is Rs. 60.

14

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Output 1 2 3 4 5 6 7 8

TC 90 105 115 120 135 160 200 260

TVC

TFC

AVC

AFC

ATC

MC

180.

A firms fixed cost is Rs. 2,000. Compute the TVC, AVC, TC and ATC from the following table. Output (units) 1 2 3 4 5 6 7 MC (Rs.) 2,000 1,500 1,200 1,500 2,000 2,700 3,500

181.

Given below is the cost schedule of a firm. Its total fixed cost is Rs. 100. Calculate average variable cost and marginal cost at each given level of output. Output (Units) 1 2 3 4 Total Cost (Rs.) 350 450 610 820 From the given table, calculate TVC and AVC. Output (Units) 1 2 MC (Rs.) 40 30 TC (Rs.) 60 140 190 240 300 Complete the following table: Output (Units) MC (Rs.) 0 1 2 3 4 3 35 4 39

182.

183.

Average Variable Cost (Rs.) Marginal Cost (Rs.)

184.

Total Fixed Cost is Rs. 90, complete the following table: Output (Units) Average Variable Cost (Rs.) Total Cost (Rs.) 1 10 2 20 3 15 Given the total fixed cost is Rs. 60, complete the following table: Output (Units) Average Variable Cost Total Cost (Rs.) (Rs.) 1 20 2 15 3 20 Given the total fixed cost is Rs. 30, complete the following table: Output (Units) AVC (Rs.) TC (Rs.) 1 20 2 15 3 20 Complete the following table:

185.

Marginal Cost (Rs.)

186.

MC (Rs.)

187.

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Output (Units) 1 3 -

TVC (Rs.) 10 27 -

AVC (Rs.) 8 10 AVC (Rs.) 12 10 MC (Rs.) 10 8 10 MC (Rs.) 20 16 20

MC (Rs.) 6 13 MC (Rs.) 10 TC (Rs.) 82 99 Total Cost (Rs.) 164 198 -

188.

Complete the following table: Output (Units) TVC (Rs.) 1 2 20 4 40 Complete the following table: Output (Units) AFC (Rs.) 1 2 3 20 4 5 12 Complete the following table: Output (Units) AFC (Rs.) 1 2 3 40 4 5 24

189.

190.

191.

Calculate total variable cost and total cost from the following cost schedule of a firm whose fixed costs are Rs. 10. Output (Units) 1 2 3 4 MC (Rs.) 6 5 4 7 200 6 8 260

192.

Complete the following table if the AFC at one unit of production is Rs. 60. Output 1 2 3 4 5 6 TC 90 105 115 120 135 160 TVC TFC AVC AFC ATC MC Calculate TVC and AVC from the following table: Output (Units) 0 1 TC (Rs.) 50 150 2 230

193.

3 290

194.

Calculate Total Variable Cost and Marginal Cost from the following cost schedule of a firm whose Total Fixed Costs are Rs. 12: Output (Units) 1 2 3 4

16

Learning Economics becomes a childs play. Prasanta Saha Sir

MC (Rs.)

20

26

31

38 6 12

195.

Given the fixed cost is Rs. 12, calculate TVC, TC and AVC from the following: Output (Units) 1 2 3 4 5 MC (Rs.) 9 7 2 4 8

196.

Calculate Marginal Cost and Total Cost from the following cost schedule of a firm whose Total Fixed costs are Rs. 15: Output (Units) 1 2 3 4 Total Variable Cost (Rs.) 10 19 29 40

197.

From the following table, calculate total cost and average variable cost at each given level of output. Output (Units) 1 2 3 4 5 6 AFC 60 30 20 15 12 10 MC 32 30 28 30 35 43 Complete the following table: Units of Output Total Revenue (Rs.) 1 2 3 Average Revenue (Rs.) 10 8 6 Marginal Revenue (Rs.)

198.

199.

Complete the following table: Units of Output 1 2 3

TR (Rs.) 10 9 9

AR (Rs.)

MR (Rs.)

200.

From the table given below, calculate total revenue, average revenue and marginal revenue Price (Rs.) 4 5 6 Unit Sold 3 2 1 Complete the following table: Output (units) Price (Rs.) 5 4 3 6 7 8 TR (Rs.) AR (Rs.) MR (Rs.)

201.

202.

Complete the following table when each unit of a commodity can be sold at Rs.5. Quantity Sold TR MR AR 1 2 3 4 5 6 7 A firms TR schedule is given in the following table. What is the product price facing the firm?

203.

17

Learning Economics becomes a childs play. Prasanta Saha Sir

Output 1 2 3 4 5

TR (Rs.) 7 14 21 28 35 Price (Rs.) 1 2 3 4 5 2 6 3 6 4 4

204.

Calculate TR, AR and MR Output 50 40 30 20 10 Complete the following table. Output (units) 1 TR (Rs.) 4 MR (Rs.) AR (Rs.) Complete the following table: Output (Units) 1 AR (Rs.) 6 MR (Rs.) TR (Rs.) 6 Complete the following table: Output (Units) 1 AR (Rs.) 10 MR (Rs.) 10 TR (Rs.) 10 Complete the following table: Output (Units) 1 Price (Rs.) 12 TR (Rs.) MR (Rs.) Complete the following table: Price (Rs.) 10 Output (Units) 1 TR (Rs.) MR (Rs.) Complete the following table: Output (Units) 1 MR (Rs.) 10 TR (Rs.) AR (Rs.) Complete the following table: 2 4 2 8 2 10 9 2 4 2 8 -

205.

206.

3 4 3 8 3 8 8 3 3 6 -

4 0 4 0 -

5 2 10 5 20 4 6 7 4 4 4 -

207.

208.

209.

210.

211.

18

Learning Economics becomes a childs play. Prasanta Saha Sir

Output (Units) MR (Rs.) TR (Rs.) AR (Rs.)

1 5 -

2 5 2 14 -

3 5 3 18 Marginal Revenue Rs.) 15 3

4 5 4 20 Total Revenue (Rs.) 26 Marginal Revenue (Rs.) 2 (-) 2

212.

Complete the following table: Output (Units) 1 TR (Rs.) 8 AR (Rs.) MR (Rs.) Complete the following table: Output (Units) Average Revenue (Rs.) 1 2 3 11 4 Complete the following table: Price (Rs.) Output (units) 4 1 1 3 -

213.

214.

Total Revenue (Rs.) 6 6 -

215.

Complete the following table: Price (Rs.) Output (Units) 10 1 2 3 4

Total Revenue (Rs.) 14 12 Total Revenue (Rs.) 7 10 Total Revenue (Rs.) 8 8

Marginal Revenue (Rs.) 1 Marginal Revenue (Rs.) (-) 1 (-) 5 Marginal Revenue (Rs.) 5 1 -

216.

Complete the following table: Price (Rs.) Output (Units) 7 1 2 3 -

217.

Complete the following table: Price (Rs.) Output (Units) 4 2 1 3 -

19

Learning Economics becomes a childs play. Prasanta Saha Sir

218.

Complete the following table: Price (Rs.) Output (Units) 7 4 1 2 4

Total Revenue (Rs.) 7 12 Marginal revenue (Rs.) 4 (-) 3 Total Revenue (Rs.) 20 30 Marginal Revenue (Rs.) 6 0 -

Marginal Revenue (Rs.) 3 (-) 4 Total Revenue (Rs.) 10 15 Marginal Revenue (Rs.) 8 (-) 6
Total Revenue (Rs.) 12 16

219.

Complete the following table: Output (Units) Price (Rs.) 1 2 3 4 -

220.

Complete the following table: Output (Units) Average Revenue (Rs.) 1 2 3 4 Average Revenue (Rs.) -

221.

Complete the following table:

Output (units) 1 2 3 4

222.

Complete the following table: Output (Units) Price (Rs.) 1 2 10 3 4 -

Total Revenue (Rs.) 24 -

Marginal Revenue (Rs) 12 0

223.

The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each level of output. Find the profit maximizing level of output. Output (in units) Total Revenue (Rs.) Total Cost (Rs.) 1 10 8 2 20 12 3 30 15 4 40 18 5 50 30 Find out the maximum profit position of a producer by comparing his MC and MR on the basis of following data: Output (in units) MR (Rs.) MC (Rs.)

224.

20

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1 2 3 4 5 6

10 9 8 7 5 2

4 5 6 7 9 12

225.

Find out the maximum profit position of producer by comparing TC and TR on the basis of the following data: Output (in units) AR (Rs.) AC (Rs.) 1 10 10 2 9 7 3 8 6 4 7 6 5 6 7 The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs. 10. Calculate the total profit at each output level. Find the profit maximizing level of output. Output (units) 0 1 2 3 4 5 6 7 8 9 10 TC (Rs.) 5 15 22 27 31 38 49 63 81 101 123

226.

227.

The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good. Quantity sold 0 1 2 3 4 5 6 7 TR (Rs.) 0 5 10 15 20 25 30 35 TC (Rs.) 5 7 10 12 15 23 33 40 Profit Find market supply schedule of the commodity from the following information:
Price (Rs.) 10 9 8 7 6 Firm A 60 50 40 30 20 Firm B 25 24 23 22 21 Firm C 80 70 60 50 4 0 Market Supply -

228.

229. 230.

The supply function of good x is given by Q X = 10+2PX. The value of PX rises from Rs. 0 to Rs. 1,2,3,4,5 and 6. Calculate individual supply schedule. Find the supply of a firm C from the following values: Price (Rs.) Firm A Firm B 7 6 5 4 3 10 9 8 7 6 15 14 13 12 11 Firm C Market Supply 60 56 48 45 42 Market (Kg) 100 -

231.

Consider the following individual and market supply schedules. Price (Rs./Kg) Firm A (Kg) Firm B (Kg) Firm C (Kg) 1 2 37 20 30 45 50

21

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3 40 55 135 4 44 50 145 5 48 60 65 Complete the following table on quantities of potatoes supplied by the firm and the market.

232.

The supply schedule of a commodity changes as follows in two cases: Price Commodity A: Quantity supplied Case B: Quantity supplied (Rs.) after change after change 1 20 0 2 40 20 3 60 40 4 80 60 5 100 80 a. Calculate elasticity of supply when price rises from Rs. 2 to Rs. 3 both in case A and in case B. b. Why does supply elasticity differ in two cases even though absolute change in quantity supplied is 20 units in both the cases? A 15 percent rise in the price of a commodity results in a rise in its supply from 600 units to 735 units. Calculate its elasticity of supply. [Ans. Es 1.5] Given Es = 5, original price = Rs. 60, new price = Rs. 100, change in quantity = 20 units. Find the original quantity and the new quantity supplied. [Ans. Q = 6 units, Q1 = 26 units] The coefficient of Es of a good is 8. A seller supplies 36 units of this good at a price of Rs. 6 per unit. How much quantity of this good will he this seller supplies when price rises by Rs. 10 per unit? [Ans. 228 units.] Price elasticity of supply of a good is 2. A producer sells 200 units of this good at Rs. 2 per unit. How much will he be willing to sell at the price of Rs. 4per unit? [Ans. 600 units.] Price of a good falls from Rs.15 elasticity of supply. to Rs. 10 and the supply decreases from 100 units to 50 units. Calculate [Ans. Es= 1.5]

233. 234. 235. 236. 237. 238. 239. 240.

If a producer sells 40 units of a good at a price of Rs. 2. If price rises to Rs. 4 and he sells 80 units of a good, Calculate its elasticity of supply. [Ans. Es = 1] A good has a unitary elastic supply. If the producer sells 40 units of that good at a price of Rs.2, how much will he be willing to sell at a price of Rs.3? [Ans. 60 units.] The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour. L 0 1 2 3 4 5 TPL 0 15 35 50 40 48 The following table gives the average product schedule of labour. Find the total product and marginal product schedules. It is given that the total product is zero at zero level of labour employment. L 1 2 3 4 5 6 APL 2 3 4 4.25 4 3.5 The following table gives the marginal product schedule of labour. It is also given that the total product of labour is zero at zero level of employment. Calculate the total and average product schedules of labour. L 1 2 3 4 5 6 MPL 3 5 7 5 3 1 The following table shows the TC schedule of a firm. Calculate the TFC, TVC, AFC, AVC, SAC, SMC schedule of the firm. Q 0 1 2 3 4 5 6 TC 10 30 45 55 70 90 120

241.

242.

243.

22

Learning Economics becomes a childs play. Prasanta Saha Sir

244.

The following table gives the total cost schedule of a firm. It is also given that the average fixed cost at 4 units of output is Rs.5. Find the TVC, TFC, AVC, AFC, SAC and SMC schedules of the firm for the corresponding values of output. Q 1 2 3 4 5 6 TC 50 65 75 95 130 185 A firms SMC schedule is shown in the following table. The total fixed cost of the firm is Rs. 100. Find the TVC, TC, AVC and SAC schedules of the firm. Q 0 1 2 3 4 5 6 TC 500 300 200 300 500 800 Compute the total revenue, marginal revenue and average marginal schedules in the following table. Market price of each unit of the good is Rs. 10. Quantity sold 0 1 2 3 4 5 6 TR MR AR

245.

246.

247.

Consider a market with two firms, the following table shows the supply schedules of the two firms: the SS 1 column gives the supply schedule of firm 1 and the SS 2 column give the supply schedule of firm 2. Compute the market supply schedule. Price (Rs.) SS1 (units) SS2 (Units) 0 0 0 1 0 0 2 0 0 3 1 1 4 2 2 5 3 3 6 4 4 Consider a market with two firms. In the following table, columns labeled as SS 1 and SS2, give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule. Price (Rs.) SS1 (kg) SS2 (Kg) 0 0 0 1 0 0 2 0 0 3 1 0 4 2 0.5 5 3 1 6 4 1.5 7 5 2 8 6 2.5 There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule. Price (Rs) SS1 (units)

248.

249.

23

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0 1 2 3 4 5 6 7 8

0 0 2 4 6 8 10 12 14

250.

A firm earns revenue of Rs. 50 when the market price of a good is Rs. 10. The market price increases to Rs. 15 and the firm now earns revenue of Rs.150. What is the price elasticity of the firms supply curve? [Ans.Es =2] The market price of a good changes from Rs. 5 to Rs. 20. As a result, the quantity supplied by a firm increases by 15 units. T he price elasticity of the firms supply curve is 0.5. Find the initial and final output levels of the firm. [Q1 = 25 units] At the market price of Rs.10, a firm supplies 4 units of output. The market price increases to Rs. 30. The price elasticity of the firms supply is 1.25. What quantity will the firm supply at the new price? From the schedule provided below calculate the total revenue demand curve and the price elasticity of demand: Quantity 1 2 3 4 5 6 7 8 9 Marginal Revenue 10 6 2 2 2 0 0 0 -5 If value of MPS is 0.25, what is the value of multiplier? If value of MPC is 0.8, find out value of multiplier (k). In an economy investment increase by Rs. 10 crores. As a result income increases by Rs. 50 crores. What is the value of multiplier? [Ans. 5] Calculate change in income when MPC = 0.8 and change in investment = Rs. 1000. [Ans. 5] If an increase of Rs. 10,000 in investment in an economy results in an increase in income of Rs. 40,000, calculate MPS in the economy. [MPS = 0.25] MPC in an economy is 0.8. If investment is increased by Rs. 5 crores, how much would be increase in income? [Ans. 25 crores] If in an economy MPC is 0.8 and investment increases by Rs. 1,000 crores, calculate total increase in income. [Ans. K =5] If MPC is 0.75, calculate value of multiplier (K). [Ans. K = 4] In an economy, level of income is Rs. 2.000 crores and MPC is 0.75. \Calculate total increase in income if investment increases by Rs. 200 crores. [K = 4] In an economy the actual level of income is Rs. 500 crores whereas the full employment level of income is Rs. 800 crores. The MPC is 0.75. Calculate the increase in investment required to achieve full employment level of income. [75 crores.] In an economy MPC is 0.75.if investment expenditure is increase by Rs. 500 crores, calculate total increase in income and consumption expenditure. [Ans. Increase in income = 2,000 crores, increase in consumption expenditure [1,500 crores] In an economy investment expenditure is increased by Rs. 400 crores and MPC is 0.8,calculate total increase in income and savings. [Ans. increase in income = 2,000 crores, increase in saving = 400 crores] [Ans.= 4]

251.

252. 253.

254. 255. 256. 257. 258. 259. 260. 261. 262. 263.

264.

265.

24

Learning Economics becomes a childs play. Prasanta Saha Sir

266.

In an economy investment expenditure is increased by Rs. 700 crores and MPC is 0.9. Calculate total increase in income and consumption expenditure. [Ans. Increase in income = 7,000 crores, increase in consumption expenditure = 6,300 crores] If MPC is 0.9 and increase in investment is of Rs. 100 crores find out increase in national income. [Ans. Increase in national income = 1,000 crores] As a result increase in investment by Rs. 20 crores, national income increases by 100 crores. Find out MPC. [Ans. 0.8] In an economy investment increases by 120 crores. The value of multiplier is 4. Calculate MPC. [MPC = 0.75] A Rs. 2000 crores increase in investment leads to a riser in national income by Rs. 1000 crores. Find out MPC. [Ans. MPC = 0.8] In an economy MPS is 0.2. Investment increases by 1000 crores. Calculate total increase in national income. [Increase in income = 5000 crores.] As a result of increase in investment by Rs. 125 crores, national income increases by Rs. 500 crores. Calculate MPC. [MPC = 0.75] An increase of Rs. 250 crores in investment in an economy resulted in total increase in income of Rs. 1000 crores. Calculate the following: a. Marginal propensity to consume (MPC) b. Change in savings, c. Change in consumption expenditure d. Value of multiplier. [Ans. a) MPC = 0.25 b) Change in savings = 250 crores, c) Consumption expenditure = 750 crores d) Value of multiplier = 4] BOT shows a deficit of Rs. 5,000 crores and value of imports are Rs. 9,000 crores. What is the value of exports? The value of a countrys import of goods is Rs. 200 crores, and value of exports is Rs. 250 crores. Fid out its BOT.

267. 268. 269. 270. 271. 272. 273.

274. 275.

25

Learning Economics becomes a childs play. Prasanta Saha Sir