Q11 A of 38 Page 1

Note: The following question is for the Visually Impaired Candidates only,in lieu of Q. No. 11 :

Indifference curve is a locus of different combinations of two goods which give the same level of satisfaction to the consumer.

(a) Convexity to origin: Indifference curve is convex to the origin due to the diminishing marginal rate of substitution.


(b) Downward sloping from left to right: Indifference curve slopes downward from left to right because the increase in units of good X requires a decrease in the number of units of the good Y. This is to maintain the same level of satisfaction.


More from this chapter

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10

What is meant by increasing returns to a factor? Discuss any two reasons behind increasing returns to a factor.

 11

Discuss briefly the following properties of an indifference curve, using diagram :

(a) Convexity to origin


(b) Downward sloping from left to right


 12

(a) ‘‘Demand curve is the Average Revenue (AR) curve of a firm.’’ Do you agree? Discuss briefly, with reason in support of your answer.

(b) The market for a commodity is in equilibrium. The supply of the commodity increases without any corresponding change in the


demand for the commodity. Discuss the impact of the change on the equilibrium price and equilibrium quantity.


OR


Elaborate on three main features of a monopolistic competitive form of market.


 13

According to a report forwarded by the Reserve Bank of India, there was a fall in the rate of inflation as measured by the Consumer Price Index (CPI) on a year-on-year basis to 5% from 8% in the previous year. Which of the following statements represents the situation?