AHSEC CLASS 12 ECONOMIC
Part-A
Micro Economics
Chapter:1
Introduction to Microeconomics
Key Points of the Chapter
- Economic problems arises because of the scarcity of resources having alternative uses.
- The central problems of an economy is what to produce.
- How to produce and for whom to produce. Opportunity cost is called economic cost.
- B are actually solved. But normative economics deals with what ought to be done.
5.State the meaning of micro economics and macro economics. [AHSEC 2017]
Ans. Micro economics is the study of individual economic units of an economy. Macro economics is the study of economy as a whole.
6. Explain the concept of opportunity cost with examples.
Ans. The amount of other goods and services that must be sacrified to obtain more of any one goods. Suppose, a teacher receives monthly salary of 6000. If he receives other job of a monthly salary of 4000. But he cannot receive both job simultaneously. He would have to give up the second job. So the opportunity cost of the teacher is rs. 4000.
HS 2ND YEAR Economic Notes for 2023 Exam Assam Board
7.Mention the basic problems of an economy.
Ans. (1) What to produce. (2) How to produce. (3) Whom to produce.
8. What are the main causes of economic problem?
Ans.
- Human wants are unlimited.
- The Resources to satisfy our wants are limited.
- The Resources have alternative uses.
9. Distinguish between Micro economics and Macro economics.
Ans.
(1) Micro economics deals with the analysis of behaviour of individual unit whereas macro economics deals as a whole.
(2) Factor of production are the main tools of micro economics whereas aggregate demand and aggregate supply of the whole economy are the main tools of macro economics.
10. What is government intervention? When does the government intervention in production and distribution of a goods or service?
Ans. When the government interfere in the means of production and Organises all economic activities on the basis of its own decision it is known as government intervention. Under socialist and mixed economy government intervenes production and distribution of goods and services.
HS 2ND YEAR Economic Questions Answer for 2023 Exam
11. Mention any two assumptions of production possibility curve.
Ans. (1) There is no change in technology. (2) Resources are fixed.
12.Write down any two uses of production possibility curve.
Ans. (1) Production Possibility curve shows the production of goods with given resources.
(2) The basic problems of an economy can be explained with the help of production possibility curve.
AHSEC class 12 Economic Questions Answer for 2023 Exam
13. Mention any two micro economic variables.
Ans. Individual demand, Equilibriam of a firm.
14. Mention any two macro economic variables.
Ans. Aggregate demand, National Income.
15. State how economic activities are organised in a mixed economy.
Ans. Under mixed economy, both public sector and private sectors are alloted their respective roles for solving the central problems of the economy together. Private sector is given the freedom to choose its lines of production. The government keeps a close watch on its activities.
16. Write any two characteristics of market economy.
Ans.
(1) Existence of private profit.
(2) All decisions are taken by price mechanism.
AHSEC class 12 Economic Questions Answer
17. Write any two characteristics of centrally planned economy.
Ans.
(1) Government controls the major economic activities.
(2) Existence of economic planning.
18. Write any two features of mixed economy.
Ans.
(1) Existence of both public sector and private sector.
(2) Existence of economic planning.
Model Question Answers of 4 Marks
1. Explain the production possibility curve with the help of a diagram.
Ans. A production possibility curve is a curve which depicts all combination of two commodities which can be produced in a country with the given resources and technology.
In the cloth diagram, PP, is the production possibility curve which consist of various combinations such as A, B, C, D. where two commodities cloth and wheat can be produced. To produce more cloth, the producer have to give up the production of wheat and so on.
AHSEC class 12 Economic Questions Answer
2. Explain the central problems of an economy. (v.v.i)
Ans: The central problems of an economy are:
(a) What to produce: Since its resources are scarce an economy have to decide what commodities to be produced and in what quantities.
(b) How to produce: Every economy has to face is that of deciding how to produce the chosen goods and services.
(c) For whom to produce: The third problem is that allocation of resources is the problem of distribution of the produce among the various individuals.
3. Why is production possibility curve is called the opportunity curve?
Ans. Production possibility curve is called the opportunity curve because it is based on the concept of opportunity cost. It implies in order to produce more of one good, some units of another good must be sacrified.
AHSEC class 12 Economic Notes & Solutions
4. How does market economy solve the economic problems?
Ans. In a market economy, producers are free to take their own decisions. They will choose to produce those goods and services prices of which is relatively higher. They will adopt that technique of production which is relatively cheaper. They will produce goods and services for those people who offer them maximum possible price. An those problems are solved through price mechanism.
5.How does mixed economy solve the economic problems?
Ans. In a mixed economy, decisions of what, how and for whom are taken by some central authority appointed by the government. Price mechanism therefore is replaced by central planning authority. In certain areas of production, producers are free to take their decisions to maximise profir. But in other areas of production decisions are taken on social grounds.
HS 2nd Year Economic Notes
6.How does centrally planned economy solve the economic problems?
Ans. In centrally planned economy, decisions of what, how and for whom to produce are taken by central authority appointed by the government. All decisions are taken in view to maximising social welfare. Those goods and services will be produced which are socially most useful. The techniques to be used where resources are fully utilized. Goods and services will be produced for needy persons.
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Also Read : AHSEC Class 12 Economic Syllabus 2023
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