Q5 of 30 Page 1

State any one assumption for the construction of the curve that shows the possibilities of

potential production of two goods in an economy.

The economic problem of scarcity and choice can be easily and clearly explained with the production possibility curve.

No change in the technique of production can be used for the construction of the curve that shows the possibilities of potential production of two goods in an economy.


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3

State the meaning of `quantity demanded of a commodity`.

 4

If a firm’s production department data says that the total variable cost for producing 8 units

and 10 units of output is 2,500 and 3,000 respectively, the marginal cost of the 10th unit will be


a. 100 b. 150 c. 500 d. 250

 6

State the behaviour of Marginal Physical Product, under Returns to a Factor.

 7

Using appropriate schedules, briefly describe the determination of market equilibrium.