Q12 of 25 Page 1

Note: The following question is for the Visually Impaired Candidates only, in lieu of Q. No. 12(b) :

Explain the relation between Average Cost (AC) and Marginal Cost (MC).


Average cost is derived by dividing the total cost by the number of units produced while Marginal cost is the cost of producing one additional unit of output.

AC=Total cost/total Units


MC= cost of one additional unit output


Therefore when average cost increases meaning the output units increases and marginal cost becomes less than the average cost.


More from this chapter

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11

(a) Identify the market form and explain the corresponding feature, as given in the following statement: ‘The commodity in this market has attributes which are identical for sellers and buyers.’’

(b) Define Price Floor. State the likely consequence of this type of intervention by the government.


 12

(a) Why is the short run Marginal Cost curve U-shaped ?

(b) Explain the relation between Average Cost (AC) curve and Marginal Cost (MC) curve using the diagram.


 13

Define ‘‘demand deposits’’.

 14

State any two examples of non-tax revenue receipts of the government.

OR


Dividends received from Public Sector Undertakings (PSUs) are a part of the government’s ____________. (Choose the correct alternative)


A. Non-tax Revenue Receipts


B. Tax Receipts


C. Capital Receipts


D. Capital Expenditure