NCERT Class 12 Economics Introductory Macroeconomics Government Budget and The Economy
We introduced the government in chapter one as denoting the state. We stated that apart from the private sector, there is the government which plays a very important role. An economy in which there is both the private sector and the Government is known as a mixed economy.…
NCERT Class 12 Economics Introductory Macroeconomics Glossary
Adam Smith (1723 – 1790) Regarded as the father of modern Economics. Author of Wealth of Nations.Aggregate monetary resources Broad money without time deposits of post office savings organisation (M3).Automatic stabilisers Under certain spending and tax rules,expenditures that…
NCERT Solutions Class 12 Economics Chapter 4 Supply
Question. Consider a market with two firms. The following table shows the supply schedules of two firms: the SS1 column gives supply schedule of firm 1 and SS2 column gives supply schedule of firm 2. Compute the market supply schedule. Price Rs. SS1 units…
NCERT Solutions Class 12 Economics Chapter 4 Revenue
Question. How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other? Answer: Total Revenue = Market Price x Quantity sold Question. Compute the total revenue, marginal revenue and average revenue schedules in the…
NCERT Solutions Class 12 Economics Chapter 3 Production
Question. Explain the concept of a production function. Answer: The relationship between physical input and physical output of a firm is generally referred to as production function. The general form of production function is, q = f (x1 : x2) where, q = output, x1 = 1…
NCERT Solutions Class 12 Economics Chapter 4 Producer Equilibrium
Question. What conditions must hold if a profit- maximizing firm produces positive output in a competitive market? Or Explain the producer’s equilibrium with MR/MC approach (when Price remains constant with the rise in output). Or Explain the conditions of a…
NCERT Solutions Class 12 Economics Chapter 4 Perfect Competition
Question. What are the Characteristics of a perfectly competitive market? Answer: 1. Large number of buyers and sellers 2. Homogeneous product 3. Free entry and exit of firms 4. Perfect knowledge about the market 5. Perfect mobility of factors of production 6. Absence of…
NCERT Solutions Class 12 Economics Chapter 6 Non Competitive Market
Question. Explain why the demand curve facing a firm under monopolistic competition is negatively sloped? Answer: 1. The demand curve of a firm under monopolistic competition is negatively sloped because of product differentiation. 2. The product of the sellers are…
NCERT Solutions Class 12 Economics Chapter 4 National Income Determination and Multiplier
Question. Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 50 crores, and MPS is 0.2 and level of income (Y) is Rs 4000 crores. State whether the economy is in equilibrium or not (cite reasons). Answer: The…
NCERT Solutions Class 12 Economics Chapter 2 National Income and Related Aggregates
Question. Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain. Answer: The sum of final expenditures in an economy must be equal to the income received by all the factors of production taken together (final…
NCERT Solutions Class 12 Economics Chapter 3 Money
Economics Money Question. What is Barter system? What are its drawbacks? Answer: Barter system of exchange is a system in which goods are exchanged for goods. It’s Drawbacks are: 1. Lack of double coincidence of wants. 2. Lack of divisibility. 3. Difficulty in storing…
NCERT Solutions Class 12 Economics Chapter 5 Market Equilibrium with Simple Applications
Question. Explain market equilibrium. Answer: Market equilibrium refers to the situation when market demand is equal to the market supply. Question. What will happen if the price prevailing in the market is (i) Above the equilibrium price? (ii) Below the equilibrium…
NCERT Solutions Class 12 Economics Chapter 1 Introduction to Macroand its Concepts
Question. Describe the five major sectors in an economy according to the macroeconomic point of view. Answer: An economy may be’ divided into different sectors depending on the nature of study. 1. Producer sector engaged in the production of goods and services. 2.…
NCERT Solutions Class 12 Economics Chapter 1 Introduction to Economics
Question. Discuss the central problems of an economy. Answer: The allocation of scarce resources and the distribution of the final goods and services are the central problems of an economy. These are: What to produce and in what quantities: An economy has to decide…
NCERT Solutions Class 12 Economics Chapter 5 Government Budget and the Economy
Question. Explain why public goods must be provided by the government? Answer: 1. Public goods are those goods and services for which consumption by some individuals does not reduce the amount available to others. 2. For example parks, roads, water, bridges, national…