When the price of a commodity falls from ` 12 per unit to ` 9 per unit, the producer

supplies 75 per cent less output. Calculate the price elasticity of supply.

Define demand. Name the factors affecting market demand.

Define fixed cost. Give an example. Explain with the reason the behaviour of Average Fixed Cost as output is increased.

OR

Define marginal product. State the behaviour of the marginal product when only one input is increased and other inputs are held constant.

Why do the central problems of an economy arise? Explain the central problem of “for whom to produce”?

Explain three properties of indifference curves.