CBSE Class 12 Economics Producer Behaviour And Supply VBQs Set A

CBSE Class 12 Economics Producer Behaviour And Supply VBQs Set A read and download in pdf. Value Based Questions come in exams for Economics in Standard 12 and are easy to learn and helpful in scoring good marks. You can refer to more chapter wise VBQs for Class 12 Economics and also get latest topic wise very useful study material as per latest 2021 NCERT book for Class 12 Economics and all other subjects for free on Studiestoday designed as per latest Grade 12 CBSE, NCERT and KVS syllabus and examination pattern

1) How can the productivity of Human resources be increased?

ANS:- The productivity of human resource can be increased with the help of human capital formation by providing training and skill to available labour force.

Value: Creative thinking

2) What efforts should be made in an economy to reduce the continuous use of exhaustible natural resources in production?

ANS:- There are various efforts namely,

1. To increase the use of renewable resources

2. To explore the substitutes of resources

3. To reduce the wastage of resources

4. To spread awareness about the effectively and optimum use of natural resources

Value: Environmental conservation

3) Availability of agricultural land (fixed cost) is limited in the world, but demand of food grains is continuously increasing. Is it possible to increase the supply of food grains by continuously increasing variable factors like seeds, fertilizer, etc?

ANS:- Availability of agricultural land is limited in the world, production of food grains may be increased by continuous increase in variable factors only up to a optimum combination with fixed factors.

After that law of negative returns is applied.

Value: Critical thinking

4) Imagine yourself as a producer (in a perfectly competitive market structure), focusing on profit maximization. Will you prefer striking an equilibrium in a state of increasing returns?

ANS:- Striking an equilibrium in a state of increasing returns to a factor (when MP is rising or MC is falling) is absolutely ruled out. Because it is a situation when every addition unit of output adds more and more to total profits.

Reason: while MR is constant (under perfect competition) MC is falling (owing to increasing returns), so that the difference between MR and MC tends to rise. It is only when the differential (MR – MC) starts shrinking, and is finally eliminated, that the profits are maximized. This happens only in a state of diminishing returns when MP is falling or MC is rising.


1) In a situation of fall in the sale of ice cream, the ice cream producer would like to reduce the production. What factors of production fixed or variable will be reduced by him? Explain with reasons.

ANS:- When sale of ice cream decreases, profit of producer will fall by which he will try to control his cost of production but in short run he cannot change the cost of fixed factors therefore he will reduce the cost of variable factors.


1) A manager of zoo wants to increase the revenue, which measure is more appropriate:

i) Increase the entry fee

ii) Decrease the entry fee. Explain?

ANS:- By reducing the entry fee the number of visitors will increase and total revenue will increase, but if the entry fee is increased, number of visitors will decrease and total revenue will fall.

Value: Problem solving


1) How can tax policy of government be effective in controlling the supply of Liquor like harmful product?

ANS:- The production of liquor like harmful products will be less profitable to the producer due to increasing tax rates because the difference between revenue and cost decreases and hence producer’s profit will decrease, and the supply of liquor will be decreased.

Value: Social health consciousness.



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