CHIRANJIV BHARATI SCHOOL, PALAM VIHAR

SESSION 2014-15
WORKSHEET ON PRODUCTION AND REVENUE
SUBJECT: ECONOMICS CLASS: XII
Questions Asked in Previous Years Question Papers

1 Mark question
Q1 Define Marginal Revenue.
Q2 Define Revenue.
Marks Questions
Q1 What does the law of variable proportions show? State the behavior of Marginal Product
according to this law?
Q2 Total product always increases whether there is increasing returns or diminishing returns to a
factor. Is it true or false? Give reasons for your answers.
Q3 Explain with the help of a total product curve, the meaning of increasing returns to a factor.
Q4 Explain the meaning of diminishing returns to a factor. Give one reason for diminishing
returns to a factor.
Q5 When marginal revenue is constant and not equal to zero, then total revenue will also be
constant. Is it true or false? Give reasons in support of your answer.
Q6 Draw average revenue and marginal revenue in a single diagram of a firm which can sell
more units of a good only by lowering the price of that good. Explain.
Q7 Draw average revenue and marginal revenue in a single diagram of a firm which can sell
more units of a good at a given price. Explain.
Q8 Draw total revenue and marginal revenue of a firm which can sell more units of a good at a
given price. Explain.
Q9 Draw total revenue and marginal revenue of a firm which can sell more units of a good only
by lowering the price of that good. Explain.
Q10 Complete the following table:
Output
Price
Marginal Revenue
Total Revenue
1

16

12

24

28

Q11 Complete the following table:

Output

Total Revenue

Marginal Revenue

Average Revenue

12

6 Marks questions
Q1 State whether following statements are true or false? Give reasons.
a) When there are decreasing returns to a factor, TP always decreases.
b) Total Product will increase only when Marginal Product increases.
Q2 State whether following statements are true or false? Give reasons.
a) Increase in Total Product always indicates that there are increasing returns to a factor.
b) When there are diminishing returns to a factor marginal and total product both always fall.
Q3 State whether following statements are true or false? Give reasons.
a) When Marginal Product falls, average product always falls.
b) When there are diminishing returns to a factor, total product first increases and then starts
falling.
Q4 State whether following statements are true or false? Give reasons.
a) When marginal revenue is zero, average revenue will be constant.
b) Marginal revenue is always the price at which the last unit of a commodity is sold.
Q5 State whether following statements are true or false? Give reasons.
a) When total revenue is constant, average revenue will also be constant.
b) When marginal revenue falls to zero, average revenue becomes maximum.
Q6 State whether following statements are true or false? Give reasons.
a) When TR is maximum, MR is also maximum.
b) When MR is positive and constant, average and total revenue will both increase at a constant
rate.
HOTS Questions
Q1 Show that AR = Price.
Q2 Can MR be Zero or negative? Explain.
Q3 If MR = AR, what happens to AR?
Q4 What is meant by diminishing returns to a factor. What are its causes?
Q5 Explain the relationship between AP and MP using a suitable diagram.

CHIRANJIV BHARATI SCHOOL, PALAM VIHAR

SESSION 2014-15
WORKSHEET ON COST
SUBJECT: ECONOMICS CLASS: XII
Questions Asked in Previous Years Question Papers
1 Mark question
Q1 What is the behavior of TVC, as output increases?
Q2 What is the behavior of Marginal revenue in a market in which a firm can sell any quantity of output it
produces at a given price?
Q4 Define variable costs.
Q5 Define fixed cost.
Q6 When is average total cost greater than average variable cost.
Marks Questions
Q1 Explain the behavior of Total Cost as output increases.
Q2 A producer starts a business by investing his own savings and hiring the labour. Identify the implicit
and explicit costs from this information.
Q3 A farmer takes a farm on rent and carries on farming with the help of family members. Identify the
implicit and explicit costs from this information.
Q4 Distinguish between explicit cost and implicit cost and give examples.
Q5 Define marginal cost. Explain its relation with average cost.
Q6 Define variable cost. Explain the behavior of total variable cost as output increases.
Q7 Giving examples, distinguish between fixed cost and variable cost.
Q8 Giving examples, explain the meaning of cost in economics.
Q9 Given below is the cost schedule of the firm. Its total fixed costs are Rs. 90. Calculate marginal cost
and total cost at each level of output.
Output (units)
Average Variable Cost
1
30
2
24
3
27
Q10 Given below is the cost schedule of the firm. Its total fixed costs are Rs. 90. Calculate marginal cost
and total variable cost at each level of output.
Output (units)
Total cost
Average Fixed Cost
1
80
60
2
96
30
3

120

20

Q11 Given below is the cost schedule of the firm. Its total fixed costs are Rs. 120. Calculate marginal cost
and average variable cost at each level of output.
Output (units)

Average Total Cost

160

96

80

Q12 A firms average fixed cost, when it produces 2 units, is Rs. 30. Given below is the cost schedule of
the firm. Its total fixed costs are Rs. 90. Calculate marginal cost and average variable cost at each level of
output.
Output (units)

Average Total Cost

80

48

40

Q13 Given below is the cost schedule of a firm. Its average fixed cost is Rs. 20 when it produces 3 units.
Calculate marginal cost and average total cost at each level of output.
Output (units)

Average Variable Cost

30

28

32

6 marks Questions
Q1 State whether following statements are true or false? Give reasons.
a) The difference between average total cost and average variable cost decreases with decrease in the
level of output.
b) When marginal cost rises, average cost also rise.
Q2 State whether following statements are true or false? Give reasons.
a) Average variable cost can fall even when marginal cost is rising.
b) The difference between total cost and total variable cost falls with increase in output.
Q3 State whether following statements are true or false? Give reasons.
a) Average cost falls only when marginal cost falls.
b) The difference between average total cost and average variable cost is constant.
c) As output is increased, the difference between ATC and AVC falls and ultimately becomes zero.
HOTS Questions
Q1 Why is short run average cost curve U shaped?
Q2 MC is only a variable cost. Why?
Q3 MC determines the shape of both TC and TVC. Explain how? What are fixed costs? Explain the
nature and shape of TFC and AFC.
Q4 How is cost different for an economist and an accountant?
Q5 Why is TC curve and TVC curve parallel to each other?

CHIRANJIV BHARATI SCHOOL, PALAM VIHAR

SESSION 2014-15
WORKSHEET ON THEORY OF SUPPLY
SUBJECT: ECONOMICS CLASS: XII
Questions Asked in Previous Years Question Papers
1 Mark question
Q1 what causes a downward shift in supply curve?
Q2 What causes an upward movement along a supply curve?
Q3 Give one reason for a rightward shift in supply curve.
Q4 Define supply.
Q5 What is meant by increase in supply
Q6 What is meant by decrease in supply
Q7 Give meaning of change in quantity supplied.
Q8 Define Market Supply.
Marks Questions
Q1 Explain how changes in prices of output influence the supply of a product.
Q2 Explain the meaning of increase in supply and increase in quantity supplied with the help of a
diagram.
Q3 Commodities X and Y have equal price elasticity of supply. The supply of X rises from 400 to 500 units
due to 20% rise in its price. Calculate the percentage fall in supply of Y when its price falls by 8%.
Q4 Explain meaning of increase in supply and increase in quantity supplied with the help of a schedule.
Q5 How is the supply of a commodity affected by changes in the prices of other commodities. Explain.
Q6 At a price of Rs. 5 per unit, total revenue is Rs 800. When its price rises by 20%, total revenue
increases by Rs. 400. Calculate price elasticity of supply.
Q7 Explain law of supply with the help of a supply schedule.
Q8 Total revenue at a price of Rs. 4 per unit is Rs. 480. total revenue increases by 240 when its price
rises by 25%. Calculate its price elasticity.
Q9 The price elasticity of supply of commodity Y is half the price elasticity of commodity X. 16% rise in
price X results in 40% rise in its supply. If the price of Y falls by 8%, calculate percentage fall in its supply.
Q10 What is supply schedule? Explain how does change in technology of producing a commodity affect
the supply of that good.
Q11 What is supply schedule? What is the effect on the supply of a good when government imposes tax
on that good. Explain.
Q12 What is supply schedule? What is the effect on the supply of a good when government gives
subsidy on the production of that good.
Q13 What is supply schedule? How does fall in the price of input affect the supply of a good. Explain
Q14 When the price of a commodity rises from Rs. 4 per unit to Rs. 5 per unit, total revenue increases
from Rs. 600 to Rs. 750. Calculate the price elasticity of supply.
Q15 Elasticity of Good X is half the elasticity of Good Y. If on 20% fall in price of X, Quantity demanded of
X falls by 30%, by what amount will quantity demanded of Y will rise with 30% rise in price?
6 Marks questions
Q1 Explain the difference between change in quantity Supplied and Change in Supply.