kendriya vidyalaya sangathan ahmedabad region

KENDRIYA VIDYALAYA SANGATHAN

AHMEDABAD REGION

STUDY MATERIAL: ECONOMICS

CLASS: XI

TERM: I (2021-22)

CHIEF PATRON: DR. JAIDEEP DAS

Deputy Commissioner, KVS RO Ahmedabad

PATRON: MS SHRUTI BHARGAVA

Assistant Commissioner, KVS RO Ahmedabad

CONVENOR: MR ARUN SHARMA

Principal, KV Naliya

CO-ORDINATOR: MR R. C. TAK

Vice Principal. KV NO. 1 AFS Jamnagar

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CONTENT TEAM MEMBERS :

S.NO. Name of Chapter / Unit Name of Teacher Name of KV

1 Chapter- 1 Introduction (Statistics) Mr.RAGHUNATH RAM KV CRPF GANDHINAGAR

2 Chapter-2 Collection of Data Mr.RAGHUNATH RAM KV CRPF GANDHINAGAR

3 Chapter- 3 Organization of Data Mr. K L MEENA KV DHRANGADHARA

4 Chapter- 4 Presentation of Data Mrs. MEENA ARTI KV 2 AHEMDABAD CANTT

5 Chapter- 5 Measures of Central Tendency Mr. SUMIT ANTIL KV PORBANDAR

6 Unit-1 Introduction (Micro Economics) Mr. UMA SHANKAR KV 2 EME BARODA

7 Unit-2 Consumer’s Equilibrium and Demand Mr. RAHUL POONIA K.V. AFS NALIYA

INDEX

S.NO. Name of Chapter / Unit Page Number

1 Curriculum for Term 1 (2021-22) 3

2 Chapter- 1 Introduction (Statistics) 4

3 Chapter-2 Collection of Data 4

4 Chapter- 3 Organization of Data 9

5 Chapter- 4 Presentation of Data 12

6 Chapter- 5 Measures of Central Tendency 16

7 Unit-1 Introduction (Micro Economics) 21

8 Unit-2 Consumer’s Equilibrium and Demand 24

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ECONOMICS(CodeNo.030) (2021-22)

CLASSXI-TERM-WISE CURRICULUM

Units TERM1-MCQBASEDQUESTIONPAPER

Theory:40Marks Time:90minutes Marks

Part A Statistics for Economics

Introduction 4 Collection, Organisation and Presentation of Data 9

Statistical Tools and Interpretation–Arithmetic Mean,Median and Mode

10

Sub Total 23

Part B Introductory Microeconomics

Introduction 4

Consumer's Equilibrium and Demand 13

Sub Total 17

Total 40 marks

Part C Project Work(Part 1):10 Marks

Students would prepare only ONE project in the entire academic session, which is divided into 2 terms i.e.Term I and Term II.

TERM 1

Part A:Statistics for Economics

Unit1:Introduction

What is Economics?

Meaning, scope, functions and importance of statistics in Economics

Unit2: Collection, Organisation and Presentation of data

Collection of data - sources of data - primary and secondary; how basic

data is collected with concepts of Sampling ;methods of collecting data;

some important sources of secondary data: Census of India and

National Sample Survey Organisation.

Organisation of Data:Meaning and types of variables; Frequency Distribution.

Presentation of Data:Tabular Presentation and Diagrammatic Presentation of Data:

(i)Geometric forms (bar diagrams and pie diagrams), (ii)Frequency

diagrams (histogram,polygon and Ogive) and (iii)Arithmetic line graphs

(time series graph).

Unit3:Statistical Tools and Interpretation

Measures of Central Tendency-Arithmetic mean,median and mode

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Part B:Introductory Micro Economics

Unit4:Introduction

Meaning of micro economics and macro economics; positive and normative economics

What is an economy? Central problems of an economy: what, how and

for whom to produce; opportunity cost.

Unit5:Consumer'sEquilibrium and Demand Consumer's equilibrium - meaning of utility, marginal utility, law of

diminishing marginal utility, conditions of consumer's equilibrium using

marginal utility analysis.

Indifference curve analysis of consumer's equilibrium-the consumer's

budget (budget set and budget line), preferences of the consumer

(indifference curve,indifference map) and conditions of consumer's

equilibrium.

Demand, market demand, determinants of demand, demand schedule,

demand curve and its slope, movement along and shifts in the demand

curve; price elasticity of demand - factors affecting price elasticity of

demand; measurement of price elasticity of demand –percentage-

change method.

Part A: Statistics for Economics

CHAPTER- 1 INTRODUCTION AND CHAPTER -2 COLLECTION OF DATA

MCQ TYPE QUESTIONS

1. The term statistics was first used by

(A) Gottfried Achenwall (B) Paul A Samuelson

(C) Lord Robinson (D) J.B. Say

2. Data are collected by the investigator himself:

(A)Secondary (B) Primary

(C) Both A and B (D) None of the above

3. This method involves study of each and every item of the universe –

A. Sample B. Census

C. Random sampling D. Quota sampling

4. under which method, chits are taken out to form a sample –

A. Lottery method B. Tippet’s method

C. Sample method D. Convenience sampling

5. Frequency is the number of --------an observation repeats in the series-

A. Years B. Weeks

C. Days D. Times

6. Tabulation is, arranging data in –

A. Rows and graphs B. Rows and columns

C. Rows and diagrams D. Diagrams and graphs

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7. Which Of The Following Indicates A Stage Of Statistical Study?

(A). Collection of Data (B). Presentation of Data

(C). Analysis of Data (D). All of these

8. In Plural sense, which of the following is not a characteristic of Statistics?

(A). Aggregate of Data (B). Only expressed in words

(C). Affected by multiplicity of causes (D). Collected in a systematic manner

9. Which is an economic activity?

(A). Production (B). Consumption

(C). Distribution (D). All of these

10. Which of the following statement is incorrect?

(A). Resources have alternative uses

(B). All numbers are Statistics

(C). Macroeconomics studies large aggregates

(D). Statistics studies only the aggregates of quantitative facts

11. The process of converting raw material into goods is called …………….

(A). Production (B). Saving

(C). Investment (D). Exchange

12. Which is not considered as an economic activity?

(A). Banking (B). Sujata helping her mother in the kitchen

(C). Agriculture (D). Business

13. Which of the following is not a function of Statistics?

(A). Economic forecasting (B). Economic equilibrium

(C). Political equilibrium (D). Construction of economic models

14. The first stage of statistical study is …………………………..

(A). Analysis of data (B). Presentation of data

(C). Organisation of data (D). Collection of data

15. Data collected for the first time from the source of origin is called …,……………

(A). Primary data (B). Secondary data

(C). Internal data (D). None of these

16. Which of the following is a method of secondary data?

(A). Direct personal investigation

(B). Direct oral investigation

(C). Collection of information through questionnaire.

(D). None of these

17. What kind of data are contained in the census of population and national income estimates,

for the government?

(A). Primary data (B). Secondary data

(C). Internal data (D). None of these

18. Schedules are filled by the……………………………….

(A). Investigator (B). Enumerator

(C). Respondent (D). None of these

19. Which of the following methods is used when an investigator collects the required

information with the respondent?

(A). Direct personal investigation (B). Indirect oral investigation

(C). Mailing surveys (D). All of these

20. Which of the following is a merit of a good questionnaire?

(A). Difficulty (B). Not in proper order

(C). Invalid questions (D). Less number of questions

21. Personal bias is possible under…………………….

(A). Random Sampling (B). Purposive Sampling

(C). Stratified Sampling (D). Quota Sampling

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22. Which of the following factors are considered when comparison between sampling and

census method is made?

(A). Area of survey (B). Accuracy of data

(C). Cost of collection (D). All of these

23. Under random sampling, each item of the universe has ……………..chance of being

selected.

(A). Equal (B). Unequal

(C). Zero (D). None of these

24. For drawing Lottery ……………….. Sampling is used.

(A). Random (B). Purposive

(C). Stratified (D). Quota

25. Reliability of sampling data depends on……………………..

(A). Size of sample (B). Method of sampling

(C). Training of enumerators (D). All of these

26. …………….. Method is suitable for small size of population

(A). Sample (B). Quota

(C). Census (D). None of these

27. Exit Polls is an interesting example of …………………

(A). Haphazard Sampling (B). Stratified Sampling

(C). Quota Sampling (D). Random Sampling

28. In ………………..... Paper slips are made for each item of the universe.

(A). Tippet Table (B). Lottery Method

(C). Both A and B (D). None of these

29. Census of India, collect data related to ………………..

(A). Industry (B). National Income

(C). Agriculture (D). Demography

30. Census method is suitable for that investigation in which…………….

(A). The size of population

(B). High degree of accuracy is not required

(C). There are widely diverse items

(D). Why there is no need for a thorough examination of items

ASSERTION AND REASONING TYPE QUESTIONS

1. Assertion (A) Statistics helps to a establish cause and effect relationship between

different economic variables that have facilitated the construction of economic theories.

Reason (R) In order to understand conclusions derived using statistics precisely, it is not

necessary that the circumstances and conditions under which this conclusions have been

drawn are also studied.

A. Both Assertion (A) and Reason (R) are true and reason (R) is the correct explanation

of assertion (A).

B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct

explanation of assertion (A)

C. Assertion (A) is true but Reason (R) is false.

D. Assertion (A) is false but Reason (R) is true.

2. Assertion (A) statistics also helps in condensing mass data into a few numerical measures

such as mean, variance etc.

Reason (R) these numerical measures help to summaries data.


of assertion (A).

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3. Assertion (A) Descriptive statistic refers to those methods which are used for the

collection, presentation as well as analysis of data.

Reason (R) these methods relate to such estimations as a measurement of central

tendencies, measurement of dispersion, measurement of correlation etc.


of assertion (A).





4. Assertion (A) Statistics is a delicate science and can be easily misused by an

unscrupulous person. So data must be used with a caution.

Reason (R) the statistical methods do not study the nature of phenomenon which cannot be

expressed in quantitative terms.


of assertion (A).





5. Assertion (A) Statistics deals with the collection, and analysis, interpretation and

presentation of numerical data.

Reason (R) Statistics is the study of numbers relating to selected facts in a systematic

form.


of assertion (A).





CASE STUDY BASED QUESTIONS

CASE STUDY 1

Sometimes formulation of plans and policies requires the knowledge of future trends. For

examples, an economic planner has to decide in 2019 how much the economy should produce in

2020. In other words, one must know what could be the expected level of consumption in 2020

in order to decide the production plan of the economy for 2020. In this situation one might make

subjective judgment based on the guess about consumption in 2020. Alternatively, one might use

statistical tools to predict consumption of past years or of recent years obtained by surveys. Thus

statistical methods help to formulate appropriate economic policies that solve economic

problems.

Fill in the blanks

1. Statistical methods help to analyse ----------- and formulate ---------- to solve them.

2. In economic policies, statistics plays a vital role in -------------.

3. Statistics is applied in ------------.

(A) Economics Business management

(B) Commerce and industry

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(C) All of these

4. Statistics is of no use to economics without data. TRUE/FALSE

CASE STUDY- 2

Statistics does not recognise individual items. Consider the statement, “the weight of Mr X in the

college is 70 KG”. This statement does not constitute statistical data. Statistical methods are not

going to investigate anything about this statement. Whereas, if the weights of all the students of

the college are given, statistical methods may be applied to analyse that data.

Statistics is both a science and an art. It is systematic and finds applications in

studying problems in economics, business, astronomy, physics, medicine etc. Statistical methods

are sophisticated in nature. Everyone is not expected to possess the intelligence required to

understand and to apply these methods to practical problems. This is the job of an expert, who is

well-versed with statistical methods.

1. Statistical laws are universal. True/ False

2. The average marks scored by Mohan in mathematics is not a statistics. True/False

Choose correct answer:

3. Statistics are:

(A) Aggregate of facts

(B) Numerically expressed

(C) Collected for a pre-deter mind purpose

(D) All of these

4. Statistics is:

(A) Science

(B) Arts

(C) A and B both

(D) None of these

ANSWER KEY

MCQ: 1. A 2. B 3. B 4. A 5. D 6. B 7. D 8. B 9. D

10. B 11. A 12. D 13. C 14. D 15. D 16. A 17. D 18. B 19. A

20. D 21. B 22. D 23. A 24. A 25. D 26. C 27. D 28. B 29. D 30. C

ASSERTION AND REASONING

1. C 2. A 3. A 4. B 5. B

CASE STUDY- 1

1. (i)Economic problems (ii) policies 2. Decision making 3. D 4. True

CASE STUDY- 2

1. FALSE 2. TRUE 3. D 4. C

CHAPTER – 3 ORGANISATION OF DATA

1 Raw data is made comprehensible by :

a) collection of data b) classification of data

c) organization of data d) presentation of data

2 Classification of population of India in terms of years is an example of :

a) Geographical classification b) Chronological classification

c) Quantitative classification d) Qualitative classification

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3 The data classified with reference to countries is called :

a) spatial b) chronological

c) both d) none

4 In a frequency distribution, the class may be :

a) singular or plural b) subjective or objective

c) individual or discrete d) inclusive or exclusive

5 A refers to quantity whose value varies from one investigation to another.

a) constant b) variable

c) array d) none of these

6 series excludes the upper limit of the class- interval.

a) exclusive b) inclusive

c) open ended d) mid value

7 The class midpoint is equal to:

a) The average of the upper class limit and the lower class limit

b) the product of upper class limit and the lower class limit

c) The ratio of the upper class limit and the lower class limit

d) none of these

8 Classification done according to the attributes of data.

a) Quantitative Classification b) Qualitative classification

c) Chronological classification d) Spatial classification

9 Formula for finding mid-value is given by

a)l2-l2 b) l2-l1/2 c)l1-l2 d) l1-l2/2

10 Which of the following is the objective of classification

a)Simplification b) Briefness c) Comparability d) All of these

11 The Difference between upper limit and lower limit of a class is known as;

a)Range b)Magnitude of class interval c) frequency d)Class limit

12 Classification of data on the basis of time period is called:

a)Geographical classification b)chronological classification

c)Qualitative classification d) Quantitative classification

13 An open –end series is that series in which:

a)Lower limit of the first class is missing

b)Upper limit of the last class is missing

c)both (a) and (b) d) None of these

14 A series in which every class interval excludes items corresponding to its upper limit is

called:

a)Exclusive series b) Inclusive series c) both (a) and (b) d) none of these

15 The characteristic of fact that can be measured in the form of numbers is called:

a)Frequency b) variable c) attribute d0 none of these

16 The frequency distribution of two variables is known as:

(a)Univariate distribution (b) Bivariate distribution

(c )Multivariate (c) None of the above

17 Range is the:

(a)Difference between the largest and the smallest observations.

(b)Difference between the smallest and the largest observations.

(c )Average of the largest and smallest observations.

(d)Ratio of the largest to the smallest observations.

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18 The class midpoint is equal to:

(a)The average of the upper class limit and the lower class limit.

(b)The product of the upper class limit and lower class limit.

(c )The ratio of the upper class limit and the lower class limit.

(d)None of the above.

19 Statistical calculation in classified data are based on:

(a)The actual values of observations.

(b)The upper class limits.

(c )The lower class limits.

(d) The class mid-point.

20 Which of the following equations is correct?

(a)s=r+n (b) s=r-n (c) s=r x n (d) s=r/n

21 “The main objective of organization of data is to arrange the data in such a form that it

becomes fairly easy to compare and analyze. Generally, we can do this by distributing

data into various classes on the basis of some attributes or characteristic. This

distribution of data into classes is the classification of data. Further each division of

data is a class. All in all, through the process of classification we can group and divide

data into classes according to general attribute, which facilitates comparison and

analysis.”

Answer the following questions.

1.An attribute is:

a) A Qualitative characteristic

b)A measurable characteristic

c)A Quantitative characteristic

d)All of these

2.Classes with Zero frequencies is called--------

3. Which are the two types of quantitative classification?

1---------------------------------------2.-----------------------------------

4.When the data is classified according to geographic location or region, it is known as-

-------------------------------------------------------------

22 “When faced with the research problem, you need to collect, analyze, interprate data to

answer your research questions. Examples of research questions that could require you

to gather data include how many people will vote for a candidate, what is the best

product mix to use and how useful is a drug in curing a disease.

The research problem you explore informs the type of data you will collect and the data

collection method you will use.”

Answer the following questions.

(1)What are the sources of data?

(2)Name two important sources of secondary data?

(3 )Name two methods of data collection?

(4)Schedules are filled by the:----

(a)Investigator (b) Enumerator

(c )Informant (d) None of these

Answer: (B)

23 Assertion (A):In the case of exclusive class intervals, upper limit is not included

Reason (R): In the case of exclusive class intervals, we have to decide in advance which

class limit is to be excluded.

(a)Both Assertion (A) and Reason (R) are true and Reason (R ) is the correct

explanation of Assertion (A)

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(b) Both Assertion (A) and Reason (R) are true and Reason (R ) is not the correct


(c) Assertion (A) is true but Reason (R )is false.

(d) Assertion (A) is false but Reason ( R)is true.

Answer; (D)

24 Assertion (A):Classification brings order to raw data

Reason (R):Classification should be formed in such a way that the class mark of each

class comes as close as possible, to a value around which the observations in a class

tend to concentrate






(d) Assertion(A) is false but Reason ( R)is true.

Answer: (B)

25 Assertion (A): Classification simplifies and condenses the mass of data.

Reason (R): Classification removes complexities and facilitates comparison.





(c) Assertion (A) is true but Reason (R ) is false.

(d) Assertion(A) is false but Reason ( R)is true

Answer: (B)

26 Assertion (A): A discrete variable can not take fractional value.

Reason (R): A discrete variable can also take fractional values.





(c) Assertion (A) is true but Reason (R ) is false.

(d) Assertion A) is false but Reason ( R) is true.

Answer: (D)

27 Assertion (A): Classification is the process of arranging data into sequence and groups.

Reason (R): Data are classified according to their common characteristics for

separating them into different but related parts.






(d) Assertion(A) is false but Reason ( R)is true

Answer: (A)

ANSWER KEY

MCQ

1 (B) 2 (A) 3 (B) 4 (D) 5(B) 6 (A) 7 (A) 8 (B) 9 (B) 10(D)

11 (A) 12(B) 13(C) 14(A) 15(D) 16(B) 17(A) 18(A) 19(D) 20(D)

21 (A) 22(B) 23(D) 24.(B) 25.(B) 26.(D) 27.(A)

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CHAPTER – 4 PRESENTATION OF DATA

Multiple choice questions from question no.1 to question no.20

Q.1 ------------------------ means exhibition of data in such a clear and attractive manner that

these are easily understood and analysed.

(a)Presentation of data (b)Interpretation of data

(c)Collection of data (d) Analysis of data

Q.2 Statistics data are generally presented in ...................

(a) 1 form(b) 2 Forms (c) 3 forms (d) 5 forms

Q.3 In a table, Source and foot Note are the--------- .

(a) Same (b) Top (c) Bottom (d)Different

Q.4 The stub is the contains............

(a) Box head (b) column caption (c) Note (d) Row caption

Q. 5 what is Frequency density.

(a)𝐂𝐥𝐚𝐬𝐬 𝐟𝐫𝐞𝐪𝐮𝐞𝐧𝐜𝐲

𝒘𝒊𝒅𝒕𝒉 𝒐𝒇 𝒕𝒉𝒆 𝒄𝒍𝒂𝒔𝒔 𝒊𝒏𝒕𝒆𝒓𝒗𝒂𝒍 (b)

𝒘𝒊𝒅𝒕𝒉 𝒐𝒇 𝒕𝒉𝒆 𝒄𝒍𝒂𝒔𝒔 𝒊𝒏𝒕𝒆𝒓𝒗𝒂𝒍

𝐂𝐥𝐚𝐬𝐬 𝐟𝐫𝐞𝐪𝐮𝐞𝐧𝐜𝐲

(c) 𝐥𝐚𝐫𝐠𝐞 𝐟𝐫𝐞𝐪𝐮𝐞𝐧𝐜𝐲

𝒘𝒊𝒅𝒕𝒉 𝒐𝒇 𝒕𝒉𝒆 𝒄𝒍𝒂𝒔𝒔 𝒊𝒏𝒕𝒆𝒓𝒗𝒂𝒍(d)

𝐌𝐢𝐝 𝐩𝐨𝐢𝐧𝐭

𝒘𝒊𝒅𝒕𝒉 𝒐𝒇 𝒕𝒉𝒆 𝒄𝒍𝒂𝒔𝒔 𝒊𝒏𝒕𝒆𝒓𝒗𝒂𝒍

Q.6Datareprented through arithmetic line graph help in understanding.

(a) Periodicity(b) Frequency Curve

(c) long term trend (d) Both (A)and (C)

Q. 7 If the upper limits of the classes and proceed by adding the frequencies that this

method will be called......| (a) More than ogive(b) Less than ogive

(c) Frequency Curve(c) both (A) and (B)

Q.8In spatial classification data are classified on the basis of.....|

(a) Location (b) Time (c) Originality (d) Height

Q.9 Which of the following Diagrams can be Made with the help of Histogram?

(a) Ogive (b) Bar Diagram (c) Frequency Polygon(d) pie chart

Q.10 Which statistical measures can be determined with the help of ogives?

(a)Mean (b) median (c) Mode (d) Mean Deviation

Q.11 Which of the following frequency should be used to obtain comparative

measurements when the bases of histogram vary in their width.

(a)Absolute frequency (b) Frequency density

(c) Cumulative Frequency (d) Frequency curve

Q.12 What does the total area under a frequency curve represents?

(a)Total Frequency (b) Median

(c) Sample Size (d) Both (A) and (C)

Q.13 What is shown at the X-axis of Time series graph .

(a) Income (b) Expenditure (c) Time (d) percentage

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Q.14 What is slope of More than ogive curve?

(a)Positive slope (b) Negative slope

(c) parallel to X-axis (d) parallel to Y-axis

Q.15 The graph of a cumulative frequency distribution is called?

(a)Ogive (b) frequency curve

(c) Arithmetic line graph (d) Histogram

Q.16 As the number of observation and classes increase, the shape of a frequency polygon.

(a) Tends to become uneven (b) Tends to become decreasing smooth

(c)tends to become increasing smooth (d) stay the same

Q.17 Point out the degree of an angle in the pie diagram .If Mohini spends 50% of her

income on Education.

(a) 360̊ (b) 90 ̊ (c) 180̊ (d) 270̊

Q.18 classifications of data by attributes is called...?

(a) Qualitative classification (b) Quantitative classification

(c) Temporal classification (d) Spatial classification

Q.19 In bar diagram, the bars that are presented are --------------- from each other.

(a)Equiwidth(b) Equispaced

(c) Both (A) &(B) (d) Unequal space

Q.20 Which of the following refer to geometric diagram of data presentation.

(a)Pie diagram (b) Bar diagram

(c) Histogram (c)Both (A)and (B)

Assertion and reasoning type questions from Q1to Q5

Q.1 Assertion(A) :In histogram no space is left between consecutive rectangles.

Reason(R) : Histogram is a Graphical presentation of data and it is drawn for only

continuous series.

(a)Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of

Assertion (A).

b. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of

Assertion (A).

c. Assertion (A) is true but Reason (R) is false.

d. Assertion (A) is false but Reason (R) is true

Q.2 Assertion (A): Frequency polygon is the most common method of presenting grouped

frequency distribution.

Reason (R) :-Frequency polygon is derived from histogram .


Assertion (A).


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Assertion (A).



Q.3 Assertion (A) :-If the two ogives will intersect each other at a point (50,70 )then the

median is 50.

Reason(R) : The median of a given frequency distribution is found graphically with the

help of ogives.


Assertion (A).


Assertion (A).



Q.4 Assertion (A) :-The width of the bars should be equal in bar graph.

Reason(R) : Bar graph is two dimensional.


Assertion (A).


Assertion (A).



Q.5 Assertion (A) :- Table is the Consequence of tabulation

Reason (R) : Tabulation is systematic and logical presentation of numeric Data in row and

columns.


Assertion (A).


Assertion (A).



Case Based Questions-case 1

50 students were asked to choose their Favourite sport these are the results.

SPORT CRICKET FOOTBALL HOCKEY BASKETBALL TENNIS

NO.OF

STUDENT

12 10 11 9 8

The data is to be illustrated in a pie chart.

Q.1 What angle should be used for football.

(a) 36̊ (b) 72̊ (c) 90̊ (d) 10̊

Q.2 In which form a data presented in a pie diagram?

(a) percentage (b) Degrees

(C)Absolute values (d) table

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Q.3 In a pie diagram/circle 1% is equal to.......

(a) 1 (b) 3.6

(c) 36 (d) 10

Q.4 What angle should be used for tennis.

(a) 8̊ (b) 57.6̊ (c) 28.8̊ (d) 64̊

Case Based Questions-

Answer the following questions based on the histogram Given below.

Q.1 What A denotes in the above diagram.

(a) Jagged line (b) horizontal line (c) Broken line (d) Both A and C

Q. 2Which group contains maximum monthly school fee?

(a) 1000-1200 (b) 1200-1400 (c) 1400-1600 (d) 800-1000

Q.3 How many schools charge monthly school fee between 1200 to 1800?

(a) 44 (b) 37 (c) 42 (d)18

Q.4 A --------------------- becomes a ----------------- if we Draw a line joining mid points of the

tops of all rectangular.

(a) Histogram, Frequency polygon (b) Frequency polygon, Histogram

(c) Frequency ,Histogram (d) Histogram, Frequency distribution

ANSWER KEY

MCQ Answer (1)-a ,(2)-c ,(3)-d ,(4)-d, (5)-a ,(6)-a ,(7)-b ,(8)-a ,(9)-c, (10)-b ,(11)-b ,(12)-d

,(13)-c, (14)-b, (15)-a, (16)-c, (17)-c, (18)-b, (19)-c, (20)-d,

Reason assertion answers (1)-a , (2)-b,(3)-a ,(4)-c ,(5)-a

Case study answers: case 1 Q.1-b,Q.2-a,Q.3-b,Q.4-b

Case study answers: case 2 Q.1-d,Q.2-b,Q.3-b,Q.4-a

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CHAPTER – 5 MEASURES OF CENTRAL TENDENCY

1. Sum of deviations about mean is:

i. zero

ii. maximum

iii. minimum

iv. one

2. The mean of 12 numbers is 24. If 5 is added in every number, the new mean is:

i. 25

ii. 84

iii. 29

iv. None of these

3. Sum of square of the deviations about mean is:

i. Zero

ii. maximum

iii. minimum

iv. one

4. The A.M. of 1,3,5,6,x,10 is 6. The value of x is:

i. 10

ii. 11

iii. 12

iv. None of these

5. The value of all items are taken into consideration in the calculation of:

i. Median

ii. Mode

iii. Mean

iv. None of these

6. For ordering shoes of various sizes for resale, a ……… size will be more appropriate.

i. Mean

ii. Median

iii. Mode

iv. None of these

7. Median of 2,5,8,4,9,6,7 is:

i. 9

ii. 8

iii. 7

iv. 6

8. ………….. is called as a positional measure.

i. Mean

ii. Median

iii. Mode

iv. None of these

9. Histogram is useful to determine graphically the value of:

i. Mean

ii. Median

iii. Mode

iv. None of these

10. If mean of a series is 32 and median is 40, what would be the values of mode?

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i. 54

ii. 58

iii. 56

iv. 38

11. Which of the following average can be computed with the help of ogives?

i. Mean

ii. Median

iii. Mode

iv. None of these

12. Most frequent occurring value in a series is called:

i. Mode

ii. Mean

iii. Median

iv. None of these

13. The most suitable average for qualitative measurement is:

i. Mean

ii. Median

iii. Geometric mean

iv. mode

14. the algebraic sum of deviations of a set of n values from A.M. is:

i. N

ii. 0

iii. 1

iv. None of these

15. Which average is affected most by the presence of extreme items?

i. Arithmetic mean

ii. Median

iii. Harmonic mean

iv. Geometric mean

16. In case of even number of observations, which of the following is median?

i. Any of the two middle-most values

ii. The simple average of these two middle values

iii. The weighted average of these two middle values

iv. Any of these

Which average would be suitable in the following cases.

The options for answers for Question no. 17-20 are given below. Solve these questions using

appropriate options given below.

i. Mean

ii. Median

iii. Mode

iv. None of these

17. Average size of readymade garments.

18. Average wages in industrial concern.

19. In case of open-ended frequency distribution.

20. Average intelligence of students in a class.

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CASE BASED STUDY QUESTIONS.

CASE 1

i. Calculate arithmetic mean from the above diagram.

ii. Find out the median value in the above diagram.

iii. Which method is used to calculate what?

iv. Calculate range of Height from the above data.

CASE 2

2. Central tendency is the numerical method to explain the data in brief. The measuring of

central tendency is a way of summarizing the data in the form of a typical or representative

value. There are several statistical measures of central tendency or averages. The three most

commonly used average sare: Arithmetic Mean, Median, Mode. Arithmetic Mean is the most

commonly used measure of central tendency.It is simple to calculate and is based on all the

observations. But it is unduly affected by the

extreme items. It is defined as the sum of the values of all observations divided by the number of

observations. Median I and Mode are positional averages. Median is that positional value of the

variable which divides the distribution into two equal parts whereas Mode is the most frequently

observed data value. Median and Mode are generally used to describe the qualitative data.

Median and Mode can be easily computed graphically. Less than and More than Ogives are

used to locate Median, whereas Histogram is used to locate Mode graphically.

I. Which of the following measure of central tendency is affected by extreme values?

(a) Mode (b) Mean

(c) Median (d) Both a and b

II. ________________divides the distribution in two equal parts.

(a) Mean (b) Mode

(c) Median (d) None of these

III. Which of the following average can be located through graph?

(a) Mean (b) Median

(c) Mode (d) Both b and c

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IV._______________ is a positional average.

(a) Mode (b) Median

(c) Neither a nor b (d) Both a and b

V. Histogram is used to locate ____________ graphically.

(a) Mean (b) Median

(c) Mode (d) Both b and c

ASSERTION-REASONING BASED QUESTIONS

1. Read the following statements - Assertion (A) and Reason (R). Choose one of the correct

alternatives given below:

Assertion (A): The sum of deviations of the observations from their arithmetic mean is always

zero.

Reason (R): It happens because arithmetic mean is a point of balance i.e. sum of positive

deviations from mean is equal to sum of the negative deviations.

a. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of

Assertion (A).


Assertion (A).


d. Assertion (A) is false but Reason (R) is true.

2. Assertion (A): The sum of the square of the deviations of the items from their arithmetic mean is

minimum.

Reason (R): the sum is less than the sum of the square of the deviations of the items from any other

value.


Assertion (A).


Assertion (A).



3. Assertion (A): Median is a positional average.

Reason (R): It is influenced by the extreme values.


Assertion (A).


Assertion (A).



4. Assertion (A): In case of symmetrical distribution, the values of mean, median and mode are

equal i.e. mean = median = mode.

Reason (R): The symmetrical distribution gives the shape of a bell.


Assertion (A).


Assertion (A).



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5. Assertion (A): In case of Open-end series, arithmetic mean can be calculated in the usual manner

without making any changes.

Reason (R): To calculate mean under open-end series, missing limits have to be assumed, which

depends on the pattern of class-interval of other classes.


Assertion (A).


Assertion (A).



MICRO ECONOMICS UNIT-1 INTRODUCTION

1. Consumer is sovereign under:

(a) Controlled economy (b) free economy (c) mixed economy (d) both (a) and (c)

2. Normative economics deals with:

(a) Facts (b) opinions (c) both (a) and (b) (d) none of these

3. Which of the following is the example of economic activity?

(a) Production (b) consumption (c) exchange (d) all of these

4. Economic problem arises due to:

(a) Limited wants (b) scarce means (c) alternative uses (d) both (b) and (c)

5. The problem of ‘what to produce’ relates to:

(a) The choice of technique (b) distribution of income

(c) market value of the goods and services (d) the choice of goods and services

6. The shape of transformation curve is changed by:

(a) Opportunity cost (b) total cost (c) marginal opportunity cost (d) none of these

7. Which of the following is related to the problem ‘how to produce’?

(a) Factoral distribution of income (b) the choice of technique (c) the choice of product

(d) none of these

8. Who controls economic activity under centrally planned economies?

(a) Industrialists (b) private firms (c) government (d) consumers

9. The government does not interfere in the process of decision-making under:

(a) Market economy (b) centrally planned economy (c) mixed economy (d) none of these

10. The resources for satisfying human wants are:

(a) Limited (b) unlimited (c) available at zero prices (d) none of these

11. Positive economic involves statements which are:

(a) Verifiable (b) not verifiable (c) may or may not be verifiable (d) none of these

12. Which of the following is not concerned with the problem of choice?

(a) Excessive income (b) alternative use of resources

(c)unlimited wants (d) scare resources

13. In which of the following situations, does scarcity arise?

(a) Supply of resources > Demand for resources

(b) Supply of resources < Demand for resources

(c) Supply for resources = Demand for resources (d) none of these

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14. Microeconomics studies the economic activities of …………… units.

(a) Non-economic (b) scare (c) individual (d) none of these

15. …………… is driven by the forces of supply and demand.

(a) Mixed economy (b) market economy

(c) social economy (d) centrally planned economy

16. Which of following is a study of micro Economics?

(a) Aggregate consumption (b) national income (c) Software industry (d) none of these

17. Which of following is an alternative name given to Micro economics …..?

(a) Factor price theory (b) income & employment theory (c) price theory (d) none of

hese

18. Which of the following is a study of Macroeconomics?

(a) An economy (b) an industry (c) a firm (d) a consumer

19. Which of the following is Not an economic activity ….?

(a) Public finance (b) a teacher teaching in a class

(b) (c) a minister in the cabinet (d) mother teaching his son

20. Who said economics is the ‘Science of wealth’?

(a) Prof. Robbins (b) Prof. J. k. Mehta (c) Prof. Marshall (d) Prof. Adam Smith

CASE BASED QUESTIONS-I

Read the following hypothetical text and answer the given questions:

In reality, all economies are mixed economies where some

important decisions are taken by the government and the economic activities are by

and large conducted through the market. The only difference is in terms of the

extent of the role of the government in deciding the course of economic activities. In

the United States of America, the role of the government is minimal. The closest

example of a centrally planned economy is the China for the major part of the

twentieth century. In India, since Independence, the government has played a major

role in planning economic activities. However, the role of the government in the

Indian economy has been reduced considerably in the last couple of decades.

1. Whether the following statement is True or false:

“A centrally planned economy has been followed by India in the last two decades”.

2. Economy may be classified as:

(a) Capitalist (b) socialist (c) mixed (d) all of these

3. Which economy has a co-existence of private and public sectors?

(a) Capitalist (b) Mixed (c) Socialist (d) none of these

4. In the USA, the role of the government is minimal, due to:

(a) Capitalist economy (b) socialist economy (c) mixed economy (d) all of these

CASE BASED QUESTIONS-II

Read the following hypothetical text and answer the given questions:

Each economy has scarce resources and will have possibility of

being exhausted gradually after a continuous use. Growth of resources, therefore,

become a basic problem of the economy. It can achieve this objective through

technological advancement. Under-developed countries like India, Pakistan,

Thailand etc. have remained poor because of poor growth of their resources. Besides

fuller utilization of resources, these countries should try to raise their productive

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capacities, by exploring further availability of natural resources and discovering

better techniques for their use. Moreover, full use of productive capacity is also

indispensable for the growth of the economy.

Since economic theory is classified into Micro and Macro Theory. Microeconomic

theory deals with the allocation of resources in the market economy. In this theory,

decisions regarding ‘what’, ‘how’ and ‘for whom’ to produce are decided on the

basis of price mechanism. Goods are freely bought and sold in the market economy

on an agreed price.

Macroeconomic theory deals with the fuller and efficient use of resources. It

also deals with the growth of resources and problems relating saving, investment,

inflation, unemployment etc. Development economics deals with the problem of

growth of resources.

1. Which is a central problem of an economy?

(a) Allocation of resources (b) optimum utilisation of resources

(c) Economic development (d) all of these

2. To which factor, economic problem is basically related to:

(a) Choice (b) Consumer selection (c) firm selection (d) none of these

3. What measures have been followed by India to raise its productive capacities by exploring:

(a) Technique (b) Natural resources (c) Discovering better technique (d) all of these

4. Macro Economics deals with the ……………………..

(a) Allocation of resources (b) Aggregate use of resources (c) both (a) & (b) (d) none of

these

ASSERTION REASON QUESTIONS (ARQ)

1. Assertion(A): ‘Both, microeconomics and macroeconomics have same degree of

aggregation’.

Reason(R): Micro economics involves limited degree of aggregation and Macroeconomics

involves the highest degree of aggregation.

Alternatives: (a) Both Assertion(A) and Reason (R) are True and Reason(R) is the correct explanation

of Assertion(A)

(b) Both Assertion(A) and Reason (R) are True and Reason(R) is not the correct

explanation of Assertion(A)

(c) Assertion(A) is True but Reason(R) is False

(d) Assertion(A) is False but Reason(R) is True

2. Assertion(A): Utility is directly linked with the usefulness of a commodity.

Reason(R): A commodity may 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.


of Assertion(A)

(b) Both Assertion(A) and Reason (R) are False



3. Assertion(A): Opportunity cost is the value of the factor in the next best alternative use.

Reason(R): It refers to the loss of output of Good-Y when resources are shifted from the

production of Good-Y to the production of Good-X.

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of Assertion(A)





4. Assertion(A): Lack of scarcity implies lack of economic problem.

Reason(R): Scarcity is the root cause of economic problem.


of Assertion(A)





5. Assertion(A): Most resources are controlled by the government in the centrally planned

economy.

Reason(R): The market decides at what price the goods are to be sold in the Bazars.


of Assertion(A)





ANSWERS KEY :

MCQ

1.(d) 2.(b) 3.(d) 4.(d) 5.(d) 6. (c) 7. (b) 8. (c) 9. (a) 10. (a) 11. (a) 12. (a) 13. (b) 14.(c) 15. (b) 16.(c)

17. (c) 18. (a) 19. (d) 20. (d)

CASE BASED QUESTIONS-I

1. False 2. (d) 3. (b) 4. (a)

2.

CASE BASED QUESTIONS-II

1. (d) 2.(a) 3. (d) 4. (b)

ASSERTION REASON QUESTIONS (ARQ) 1. (d) 2. (b) 3. (a) 4.(a) 5. (c)

UNIT – 2 CONSUMER’S EQUILIBRIUM& THEORY OF DEMAND

MULTIPLE CHOICE QUESTIONS (MCQ’s) (ONE MARKS QUESTIONS): -

Q.1 Utility in economics means: -

(a) Want satisfying power of a commodity (b) Pleasure

(c) Happiness (d) Usefulness

Q.2 Marginal utility is: -

(a) Total minus average utility (b) Addition to total utility

(c) Total plus average utility (d) Total utility divided by the number of units

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Q.3 When total utility increases marginal utility is: -

(a) Negative and increasing (b) Negative and declining

(c) Zero (d) Positive and declining

Q.4 At the saturation point for commodity X, the MU is: -

(a) Positive (b) Negative

(c) Zero (d) Any of the above.

Q.5 The total utility is maximum when: -

(a) MU is Zero (b) MU is maximum

(c) AU is maximum (d) MU is equal to AU

Q.6 An indifference curve is always: -

(a) Concave to the origin (b) Convex to the origin

(c) A vertical straight line (d) A horizontal straight line.

Q.7 The ratio of exchange between two goods in indifference curve analysis is shown by: -

(a) The price line (b) The indifference curve

(c) The indifference map (d) All of the above.

Q.8 The slope of the indifference curve shows: -

(a) The price ratio (b) Diminishing MRS

(c) Factor substitution (d) Marginal utility

Q.9 The statement A=B=10 utils implies: -

(a) An ordinal measure of utility (b) An ordinal and a cardinal measure of utility

(c) A cardinal measure of utility (d) None of the above.

Q.10 The consumer will be in equilibrium where there is tangency between price line and indifference

curve because at equilibrium point his MRS: -

(a) Is equal to the price ratio. (b) Is greater than the price ratio.

(c) Is less than the price ratio (d) Is falling.

Q.11 If the consumer is below his budget line, the consumer: -

(a) Is not spending all of his income. (b) May or may not spending all of his income.

(c) Is spending all of his income. (d) Is in equilibrium.

Q.12 If the MRSxy for individual A exceeds the MRSxy for individual B, it is possible for individual A to

gain by giving up: -

(a) X in exchange for more Y from B (b) Y in exchange for more X from B.

(c) Either X or Y (d) None of the above

Q.13 The falling part of TU curve shows: -

(a) Falling Marginal Utility (b) Zero Marginal Utility

(c) Negative Marginal Utility (d) Rising Marginal Utility

Q.14 At the point of tangency, the slope of the indifference curve is: -

(a) Smaller than the price line (b) Greater than the price line

(c) Equal to the price line (d) None of the above

Q.15 If a consumer spends his entire income (M) on Y commodity and nothing on X commodity, he will

purchase what quantity of Y commodity?

(a) 𝑀

𝑃𝑦 (b) 5>

5

5

(c) MRS>𝑃𝑥

𝑃𝑦 (d) None of the above

Q.16 If MRS is increasing, the indifference curve will be: -

(a) Parallel to the X-axis (b) Downward sloping concave

(c) Downward sloping convex (d) Downward sloping straight line

Q.17 A consumer consumes only two goods, if price of the one goods rises, the indifference curve: -

(a) Shifts upward. (b) Shifts downwards.

(c) Can shift both upwards and downwards. (d) Does not shift

Q.18 If Marginal Rate of Substitution is consent throughout, the indifference curve will be: -

(a) Parallel to the X-axis (b) Downward sloping concave

(c) Downward sloping convex (d) Downward sloping straight line

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Q.19 If Marginal Rate of Substitution is increasing throughout, the indifference curve will be: -

(a) Downward sloping convex (b) Downward sloping concave

(c) Downward sloping straight line (d) Upward sloping convex

Q.20 A consumer consumes only two goods. If price of one good falls, the difference curve: -

(a) Shift upwards (b) Shift downwards.

(c) Can shift both upwards or downwards (d) Does not shift

Q.21 An individual’s demand for goods is: -

(a) The amount he will buy at any given price. (b) The total amount he is able to buy.

(c) His willingness to buy a given quantity at

market price.

(d) His ability to buy a given quantity.

Q.22 In the typical demand schedule, quantity demanded: -

(a) Varies directly with price. (b) Varies proportionately with price.

(c) Varies inversely with price. (d) Is independent of price.

Q.23 The law of demand states that: -

(a) When prices rise demand rises. (b) When prices rise demand falls

(c) When income rises demand rises (d) When income rises demand falls.

Q.24 The Law of demand indicates: -

(a) The relationships between the price of the commodity and its quantity demanded.

(b) The relationships between the income of the consumer and its quantity demanded.

(c) The relationships between the price of substitute of a commodity and its quantity demanded.

(d) The relationships between the price of the complimentary of a commodity and its quantity

demanded.

Q.25 A rise in the price of a commodity leads to: -

(a) A shift in demand (b) A rise in demand

(c) A fall in consumer’s real income (d) A rise in consumer’s real income.

Q.26 In case of Giffen good like Maize, a fall in its price tends to: -

(a) Make the demand remain constant (b) Increase the demand

(c) Reduce the demand (d) Change in demand

Q.27 Which of the following pairs of commodities is an example of substitutes: -

(a) Coffee and Milk (b) Diamond and soap

(c) Pen and Ink (d) Mustard and Coconut Oil

Q.28 When the price of a substitute of commodity X rises, the demand for X: -

(a) Rises (b) Falls

(c) Remains constant (d) Any of the above

Q.29 Other things being equal a rise in demand can be caused by: -

(a) A rise in the price of the commodity (b) A fall in the price of the commodity

(c) A rise in the income of the consumer (d) A fall in the income of the consumer

Q.30 There is decrease in demand when: -

(a) More is demanded at the same price (b) A fall in the price of the commodity

(c) Less is demanded at the same price (d) A fall in the income of the consumer.

Q.31 If two goods are complements, this means that a fall in the price of one commodity will induce: -

(a) An upward shift in demand for the other

commodity

(b) No shift in demand for the other

commodity

(c) A downward shift in demand for the other

commodity

(d) Any of the above.

Q.32 Demand has reference to: -

(a) A given period of time (b) A given price

(c) A given period of time and given price (d) None of the above.

Q.33 “Contraction demand” means: -

(a) Less quantity demanded at a lower price (b) More quantity demanded at a lower price

(c) Same quantity demanded at a lower price (d) Less quantity demanded at a higher price

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Q.34 A commodity which is demanded less when consumer’s income rises, it termed as: -

(a) Inferior (b) Normal

(c) Giffen (d) Superior

Q.35 The demand curve is: -

(a) Negatively sloped (b) Positively sloped

(c) Concave to X axis (d) None of the above

Q.36 When income of the consumer rises the impact on price-demand curve of an inferior good is: -

(a) Shifts to the right (b) Shifts to the left

(c) There is upward movement along the curve (d) There is downward movement along the

curve

Q.37 When income of the consumer falls the effect on price-demand curve of an inferior goods is: -

(a) Shifts to the right (b) Shifts to the left

(c) There is upward movement along the curve (d) There is downward movement along the

curve

Q.38 If due to fall in the price of good X, demand for good Y rises, the two goods are: -

(a) Substitutes (b) Complements

(c) Not related (d) Competitive

Q.39 If with the rise of good Y, demand for good X rises, the goods are: -

(a) Substitutes (b) Complements

(c) Not related (d) Jointly demanded

Q.40 Specific quantity to be purchased against a specific price of the commodity is called: -

(a) Demand (b) Quantity demanded

(c) Movement along the demand curve (d) Shift in demand curve

(3) Choose the correct option:- Assertion (A): When Quantity of commodity changes there is a movement along the same demand curve.

Reason (R): Income of consumer changes.

Results:-

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives

given below: -

(1) Choose the correct option:-

Assertion (A): A good is considered to be normal when with increase in income of its consumer its demand

rises.

Reason (R): Normal goods have negative income effect.

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

(c) Assertion (A) is true but Reason (R) is false.

(d) Assertion (A) is false but Reason (R) is true.


Assertion (A): The demand for salt is inelastic

Reason(R):Necessary goods have inelastic demand

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of

Assertion (A).

(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct

explanation of Assertion (A).



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(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)




Assertion (A): When price of Y increases the demand for X increases.

Reason (R): X and Y are substitute goods.

Alternatives:-


(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion(A)



(5) Choose the correct option: -

Assertion (A):Budget Line / Price Line is a line showing different combinations of two goods which a

consumer can attain when he spends his entire income on these goods, and the market price of the goods are

known.

Reason (R):Slope of Budget Line / Price Line shows the rate at which market price allows the consumer to

substitute Good-X for Good-Y. It is expressed as 𝑃𝑥

𝑃𝑦.

Alternatives:-


(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).



CASE STUDY BASE QUESTIONS:-

(1) Read the following report and answer the questions on the basis of the same:-

Economists use the term demand to refer to the amount of some good or service consumers are willing and able

to purchase at each price. Demand is based on needs and wants—a consumer may be able to differentiate

between a need and a want, but from an economist’s perspective they are the same thing. Demand is also based

on ability to pay. If you cannot pay for it, you have no effective demand.

What a buyer pays for a unit of the specific good or service is called price. The total number of units purchased

at that price is called the quantity demanded. A rise in price of a good or service almost always decreases the

quantity demanded of that good or service. Conversely, a fall in price will increase the quantity demanded.

When the price of a gallon of gasoline goes up, for example, people look for ways to reduce their consumption

by combining several errands, commuting by carpool or mass transit, or taking weekend or vacation trips closer

to home. Economists call this inverse relationship between price and quantity demanded the law of demand. The

law of demand assumes that all other variables that affect demand are held constant.

1 The law of demand states that: -

(a) When prices rise demand rises. (b) When prices rise demand falls

(c) When income rises demand rises (d) When income rises demand falls.

2 When the price of a substitute of commodity X rises, the demand for X_______

(a) Rises (b) Falls

(c) Remains constant (d) None of the above

3 Demand has reference to: -

(a) A given period of time (b) A given price

(c) A given period of time and given price (d) None of the above.

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4 Law of demand must fail in case of: -

(a) Normal goods (b) Giffen goods

(c) Inferior goods (d) None of these

(2) Read the following and answer the questions on the basis of the same: -

A consumer is an economic agent who uses goods and services for the direct satisfaction of his / her

wants. Consumer consists of institution, individuals and groups of individuals or households. Consumer

behaviour refers to the way in which consumers spend their income. The consumer derives utility from

his expenditure. The consumer chooses his expenditures and maximums his utility with the given

income and given prices of goods and services.

Consumption of goods and services leads to satisfaction of human wants. This satisfaction is called

“Utility”. Utility may be defined as “satisfaction derived from the consumption of a commodity” or it

may be defined as “want-satisfying power of a commodity”.Total Utility (TU) It is the sum total of

utility derived from the consumption of all the units of a commodity.Marginal Utility (MU) It refers to

additional utility on account of the consumption of an additional unit of a commodity.

1 Utility in economics means: -

(a) Want satisfying power of a commodity (b) Pleasure

(c) Happiness (d) Usefulness

2 Marginal utility is: -

(a) Total minus average utility (b) Addition to total utility

(c) Total plus average utility (d) Total utility divided by the number of units

3 When total utility increases marginal utility is: -

(a) Negative and increasing (b) Negative and declining

(c) Zero (d) Positive and declining

4 At the saturation point for commodity X, the MU is: -

(a) Positive (b) Negative

(c) Zero (d) Any of the above.

ANSWER KEY

MULTIPLE CHOICE QUESTIONS (MCQ’s) (ONE MARKS QUESTIONS)

Ans.1 Want satisfying power of a commodity

Ans.2 Addition to total utility

Ans.3 Positive and declining

Ans.4 Zero

Ans.5 MU is Zero

Ans.6 Convex to the origin

Ans.7 The price line.

Ans.8 Diminishing MRS

Ans.9 An ordinal and a cardinal measure of utility.

Ans.10 Is equal to the price ratio

Ans.11 Is not spending all of his income.

Ans.12 Y in exchange for more X from B.

Ans.13 Negative Marginal Utility

Ans.14 Equal to the price line

Ans.15 𝑴

𝑷𝒚

Ans.16 Downward sloping convex

Ans.17 Does not shift.

Ans.18 Downward sloping straight line.

of 29

Ans.19 Downward sloping concave.

Ans.20 Does not shift

Ans.21 The amount he will buy at any given price.

Ans.22 Varies inversely with price.

Ans.23 When prices rises demand falls.

Ans.24 The relationships between the price of the commodity and its quantity demanded.

Ans.25 A fall in consumer’s real income

Ans.26 Change in demand

Ans.27 Mustard and Coconut Oil

Ans.28 Rises

Ans.29 A rise in the income of the consumer

Ans.30 Less is demanded at the same price

Ans.31 An upward shift in demand for the other commodity

Ans.32 A given period of time and given price

Ans.33 Less quantity demanded at a higher price

Ans.34 Inferior

Ans.35 Negatively sloped

Ans.36 Shifts to the left

Ans.37 Shifts to the right

Ans.38 Complements

Ans.39 Substitutes

Ans.40 Quantity demanded.

Read the following statements - Assertion (A) and Reason (R). Choose one of the correct

alternatives given below: -

Ans. 1 (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of

Assertion (A).


Assertion (A).

Ans. 3(b)Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of

Assertion (A)


Assertion (A).

Ans. 5 (b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of

Assertion (A).

CASE STUDY BASE QUESTIONS: -

(1) Read the following report and answer Questions on the basis of the same:-

1 When prices rise demand falls

2 Rises

3 A given period of time and given price

4 Giffen goods

(2) Read the following report and answer Questions on the basis of the same:-

1 Want satisfying power of a commodity

2 Addition to total utility

3 Positive and declining

4 Zero

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