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Quick Revision Question and Answers for Low Achievers
FREQUENTLY ASKED QUESTIONS – CBSE BOARD EXAMINATION
One Mark Questions (1M)
1. What is opportunity cost? Opportunity cost refers to the cost of the next best alternative foregone.
2. Define Marginal rate of transformation. It is the amount of one good that must be given to produce one additional unit of a second good. It is also known as marginal opportunity cost.
3. Give two examples of Micro economic variables/ studies.
a. Individual demand
b. Individual savings
4. Why does an economic problem arise? It is due to unlimited wants and limited resources.
5. What is meant by inferior goods in economics? Inferior goods refer to those goods whose demand decreases with rise in income of the consumer.
6. Define budget line. Budget line shows all combinations of two goods that a consumer can buy with his income at a given price.
7. What is a demand schedule? It is a tabular representation of different quantities demanded at different levels of prices
8. Define normal goods. Normal goods are those goods whose demand rises with increase in income of consumer.
9. Define indifference curve. It shows the various combinations of two goods which provide same level of satisfaction to the consumer.
10. Define price elasticity of demand. Price elasticity of demand refers to the degree of responsiveness of the quantity demanded to changes in price. Ed = ΔQ X P ΔP Q
11. Define production function. It refers to the functional relationship between inputs and outputs.
12. Define Marginal physical product. It refers to the addition made to the total product
13. Define revenue. It refers to total money income from the sale of output
14. Define marginal revenue. It refers to the addition made to the total revenue.
15. Why is the ATC greater than AVC ATC is greater than AVC because ATC includes AVC and AFC
16. Define fixed cost. Fixed costs refer to cost which remains constant as output changes. For e.g.: rent
17. Define equilibrium price. Equilibrium price refers to a price at which market demand and market supply are equal.
18. In which market form the products are differentiated. Monopolistic competition
19. In which market form a firm is a price taker? Perfect competition
20. Why is demand curve under oligopoly indeterminate (uncertain)? Demand curve is indeterminate because of price war between the sellers.
21. Define Macro Economics? Macro economics studies the economy as a whole.
22. What is an Economic Territory? It refers to the area of a country where there is free movement of goods, human resources and capital.
23. Who is a normal resident? A persons or an institution who lives in a country and whose centre of interest lies in that country is called a normal resident of that country.
24. Is transfer income included in national income? Why? No, because transfer income does not result in the production of goods and services.
25. What is meant by Cash Reserve Ratio (CRR)? It is the percentage of net deposits of the commercial bank which are maintained by the RBI
26. What is meant by Bank rate? It is the rate at which the central bank lends money to the commercial bank.
27. What is meant by double coincidence of wants? It means that one person‘s desire to buy and sell must coincide with the other person‘s desire to buy and sell.
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