NCERT Class 12 Economics Chapter 2 Theory of Consumer Behaviour Extra Questions and Answers
Class 12 Economics Chapter 2 Extra Inside Questions and Answers – Theory of Consumer Behaviour. Here in this Page Class XII Students can Learn Extra Questions & Answer 2nd Chapter Economics fully Inside.
We Provided Here Theory of Consumer Behaviour Economics Chapter 2 Long Answer Type Question, MCQ Questions & Answer, Short Answer Type Questions (2 or 3 marks), and Very Short answer Type Question (1 marks) Solution.
Class 12 Economics Chapter 2 Inside based Question
Economics Chapter 2 Theory of Consumer Behaviour Class 12 Inside 5 Marks, 3 marks, 2 Marks & And 1 Marks Important Questions and Answers.
1.) What is mean by law of Demand ?
Ans -The downward sloping demandcurve shows that. Theindividual is willing to buy more ofcommodity at lower price and willing to buy less of commodity at high price. Therefore, there is a negativerelationship between price of acommodity and quantity demanded which is referred to as the Law of Demand.
2.) What is demand and what is demand curve?
Ans -The quantity of a commodity that a consumer is willing to buy and is able to afford, given prices of goods and income of the consumer, is called demand for that commodity. Demand for acommodity x, apart from the price of x itself, depends on factors such as prices of other commodities income of the consumer and tastes and preferences of the consumers. Demand curve is a graphic presentation of various quantities of a commodity that a consumer iswilling to buy at different prices of the same commodity, while holding constant prices of other related commodities and income of the consumer.
3.)What are the features of indifferent curve ?
Ans –following are features of indifferent curve
1.) Indifference curve slopes downwards from left to right.
2.) Higher indifference curve gives greater level of utility.
3.) Two indifference curves never intersect each other.
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4.) Explain the measures of utility of cardinal analysis and relation between them.
Ans-Cardinal utility analysis assumes that level of utility can be expressed innumbersMeasures of Utility
1.) Total Utility: Total utility of a fixed quantity of a commodity (TU) is the totalsatisfaction derived from consuming the given amount of some commodity .More consumption ofcommodity provides more satisfaction to the consumer. TU dependson the quantity of the commodity consumed. Therefore, TUn refers to total utilityderived from consuming n units of a commodity .
2.) Marginal Utility: Marginal utility (MU) is the change in total utility due toconsumption of one additional unit of a commodity. The relation between the TU and MU as follows:
i.) The values ofmarginal and total utility derived from consumption of various amounts of acommodity.
ii)The marginal utility diminishes with increasein consumption of the commodity.
iii) When the value of TU maximum that time MU is zero.
iv.) When the value of TU diminishing that time MU will be negative.
5.) When the indifferent curve is straight line.
Ans -The law of Diminishing Marginal Rate of Substitutioncauses an indifference curve to be convex to the origin. This is the most commonshape of an indifference curve. But in case of goods being perfect substitutesthe marginal rate of substitution does not diminish. It remains the same. Therefore in case of two commodities areperfect substitutes for the consumer indifference curve willbe a straight line. For example Here, the consumer is indifferent for all these combinations as long as the totalof five rupee coins and five rupee notes remains the same. For the consumer, ithardly matters whether she gets a five rupee coin or a five rupee note. So,irrespective of how many five rupee notes she has, the consumer will sacrificeonly one five rupee coin for a five rupee note. So these twocommodities areperfect substitutes for the consumer and indifference curve depicting these willbe a straight line.
6.) What is mean by ordinal utility analysis ?
Ans -Cardinal utility analysis is simple to understand, but suffers from a majordrawback in the form of quantification of utility in numbers. In real life, wenever express utility in the form of numbers. At the most, we can rank variousalternative combinations in terms of having more or less utility. In other words,the consumer does not measure utility innumbers but this is easy to consumer give ranksvarious consumption bundles.This is called ordinal utility analysis in which consumer gives rank as per the utility that derived from the commodity.
7.) What is mean by consumer budget?
Ans – Consumer having a fixed amount of money (income) tospend on two goods. The prices of the goods are given in the market. The consumercannot buy any and every combination of the two goods that he may want toconsume and which gives him more satisfaction .The income of the consumer is scared therefore consumer not buy any combination of two good this is not afford for him. The consumption bundles means it give proper combination of two good which are affordable for the consumer. Given her fixedincome and the prices of the two goods, the consumer can afford to buy onlythose bundleswhich cost her less than or equal to her income.
8.) What is mean by price elasticity of demand?
Ans –
The demand for a good moves in the opposite direction of its price. But theimpact of the price change is always not the same. Sometimes, the demand for agood changesconsiderably even for small price changes. On the other hand,there are some goods for which the demand is not affected much by price changes Demands for some goods are veryresponsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demandis a measure of the responsiveness of the demand for a good to changes in itsprice. Price elasticity of demand for a good is defined as the percentage change in demand for the good divided by the percentage change in its price.
9.) Consider a market where there are just two consumers and suppose their demands for the good are given as follows: Calculate the market demand for the good.
P | D1 | D2 |
1 | 10 | 28 |
2 | 9 | 24 |
3 | 8 | 20 |
4 | 7 | 18 |
5 | 6 | 16 |
6 | 5 | 14 |
Ans.
P | D1 | D2 | Market demand=d1+d2 |
1 | 10 | 28 | 10+28=38 |
2 | 9 | 24 | 9+24=33 |
3 | 8 | 20 | 8+20=28 |
4 | 7 | 18 | 7+18=25 |
5 | 6 | 16 | 6+16=22 |
6 | 5 | 14 | 5+14=19 |
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