CBSE Class 12 Economics Micro Economics VBQs 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
CBSE Class 12 Economics VBQs for Micro Economics Based on CBSE and NCERT guidelines. Value based questions are now being given in exams to promote morals and values in students, Students should read and understand the following VBQs to get better understanding and score good marks in exams
Q1.Massive unemployment will shift the PPF to the left. Defend or refute.
Ans. The given statement is refuted .Massive unemployment does not decrease the capacity of economy to produce. So, there will be no shift of PPF. However, economy will operate at some point inside the PPF, due to unutilisation of human resources.
Q2.What is the opportunity cost of an input which has no alternative use?
Ans. The opportunity cost of such input is zero.
Q3.Utility is directly linked with the usefulness of a commodity. Is it true or false? Give reason.
Ans. False. A commodity may not be useful, yet it may have utility for a particular person. For example, chewing tobacco is harmful for health ,yet many people derive high degree of utility from it.
Q4.In order to encourage tourism in Goa, Indian Airlines reduces the air fare to Goa. How will it affect market demand curve for air travel to Goa ?
Ans. There will be a downward movement along the same market demand curve for air travel to Goa. It happens because of decrease in the air fare.
Q5. At certain level of output ,the marginal cost of a firm is above its margi revenue .Can this be its equilibrium output ?
Ans. No,it can not be its equilibrium output because the marginal cost exceeds the marginal revenue. The firm is running at a loss.
Q6. Trendz produces both jeans and shirts .How will an increase in the price of jeans affect the supply curve of shirts ?
Ans. An increase in the price of jeans will make the production of jeans more attractive . As a result ,Trendz will shift its resources from shirts to jeans. It will shift the supply curve of shirts towards left
Q7. A severe drought results in a drastic fall in the output of wheat. Analyze how it will affect the market price of wheat.
Ans. Market price of wheat will increase(due to decrease in supply).
Q8.What will be the effect on equilibrium price and equilibrium quantity of telephone instruments ,if China exports a large number of telephone instruments to India.
Ans. Equilibrium price will fall and equilibrium quantity will rise(due to increase in supply).
Q9. ‘Both microeconomics and macroeconomics have same degree of aggregation’. Defend or refute.
Ans. The given statement is refuted
●Micro economics involves limited degree of aggregation .For example, market demand (micro concept)is derived by aggregating individual demands of all the buyers in particular market.
●On the other hand , macro economics involves the highest degree of aggregation. For example, aggregate demand(macro concept)is derived for the entire economy. It means ,micro economics and macro economics differ in degree of aggregation.
Q10.”Law of demand is a quantitative statement”. Comment.
Ans. Law of demand is only an indicative and not a quantitative statement. It indicates only the direction, in which the demand will change with a change in price. It says nothing about the magnitude of such a change. For example price of Pepsi rises from Rs 10 to Rs 12 per bottle, then, as per law of demand, we can say that the demand for Pepsi will fall. But the law does not give the actual amount by which the demand for Pepsi will decline.
Q11. “MC can be calculated both from total cost and total variable cost and is not affected by total fixed cost.” Discuss.
Ans. The given statement is correct.MC is not at all affected by total fixed cost (TFC). MC is addition to TC or TVC when one more unit of output is 7 produced. As TFC remains same with increase in output ,MC is independent of fixed cost and is affected just by change in variable costs.
Q12.Why AR curve under monopolistic competition is more elastic than AR curve under monopoly?
Ans. The AR curve under monopolistic competition is more elastic because there exists close substitutes of the product sold by the monopolistic firm where as under monopoly the AR curve is less elastic because there is non availability of close substitutes of the product sold by the monopoly firm.
Q13.How does a firm under monopolistic competition exercise partial control over price?
Ans. A monopolistic competitive firm enjoys partial control over price. It happens because by incurring heavy selling costs, the firm is able to create a differentiated image of its product in the minds of consumers. Products are differentiated on the basis of brand ,size, color, shape, etc. Buyers are attracted to buy a particular product even at a relatively higher price.
Q14.Why is number of firms small in an oligopoly market ?
Ans. The main reason for small number of firms under Oligopoly is the Barriers to entry, which prevent entry of new firms into the industry. Patents, requirement of large capital, control over crucial raw materials, etc, are some of the other reasons, which prevent new firms from entering into industry. As a result ,there are few firms in an Oligopoly market.
Q15.”Demand and supply are like two blades of a pair of scissors”. Comment.
Ans. The given statement is correct.Both the blades of pair of scissors are equally important to cut a piece of cloth.Similarly ,both demand and supply are neede for determining price in the market.There is no use for demand for a product if there is no supply for the product and supply is not needed if there is no demand for the product. One of the two may play more active role in price determination in the short run. But both are needed to determine the price in the long run.