Q1 of 25 Page 1

State one example of positive economics.

If the government imposes a tax on the good, the price of the good will rise.

Positive economics is the branch of economics that deals with how the economic problems facing the society are actually solved. It analyses the scientific methods of working of an economy and how different economic system functions. It studies what is, what was or what will be. It can be tested with respect to logical and empirical evidence.


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2

Define fixed cost.

 3

When the Average Product (AP) is maximum, the Marginal Product (MP) is : (Choose the correct alternative)

(a) Equal to AP


(b) Less than AP


(c) More than AP


(d) Can be any one of the above

 4

When the total fixed cost of producing 100 units is Rs. 30 and the average variable cost is Rs. 3, total cost is: (Choose the correct alternative)

(a) Rs 3


(b) Rs 30


(c) Rs 270


(d) Rs 330

 5

Explain the central problem of ‘for whom to produce’.

OR


Explain the central problem of ‘choice of technique.’