Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev

Economics for CBSE Class 12 Board Examinations

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The document Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev is a part of the Commerce Course Economics for CBSE Class 12 Board Examinations.
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N.C.E.R.T Questions

(Q1) What is meant by law of supply ?

(Q2) What is meant by change in quantity supplied and change in supply ?

(Q3) Due to improvement of technology, the marginal costs of production of televisions have gone down. How will it affect the supply curve of television?

(Q4) What effect does a change in input price have on the supply curve?

(Q5) What effect does imposition of unit tax (an increase in excise tax rate) have on supply curve the product ?

(Q6) If a farmer grows rice and wheat how will an increase in the price of wheat affect the supply curve of rice ?

(Q7) What is meant by market period ?

(Q8) What does price elasticity of supply measure or quantify ?

(Q9) What is the price elasticity associated with a straight line supply curve passing through the origin ?

(Q10) Give two examples where technological progress leads to a shift in the supply curve.

(Q11) A new technique of production reduces the marginal cost of producing stainless steel How will this affect the supply curve of stainless steel utensils ?

(Q12) Because of cyclone in a coastal area, the sea level , covers a lot office fields. This reduces the productivity of land. How will it affect the supply curve of rice of the region ?

(Q13) Draw straight line supply curve with (a) Es = unitary (b) Es = zero

(Q14)

Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev

(a) Complete the table
(b) Plot supply curve of each firm and the market. What relationship do you observe between individual supply curve and the market supply curve ?
(c) Calculate Es of firm A when price rises from Rs2 to Rs 3

(Q15) What is the supply curve of the firm in short run ?

(Q16) A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns revenue of Rs 150. What is the Es of the firm’s?


(Q17) The market price of a good changes from Rs 5 to rs 20. As a result, the quantity supplies by a firm increases by 15 units. The Es is . 5 Find initial and final output levels of the firm.

(Q18) At market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs. 30 what quantity will the firm supply at new price if Given Es = 1.25

(Q19) Difference between Stock and supply ?

(Q20) Why more is suppied at higher prices ?

(Q21) Find and plot market supply

Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev

(Q22) There are three indentical firms in the market. The following table shows the supply schedule of firm 2 . Compute the market supply schedule

Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev

CBSE Questions

(Q1) State three causes of decrease in supply ?

(Q2) Draw straight line supply curve with Es equal to (i) one (ii) less than one (iii) more than one

(Q3) What is meant by supply schedule and market supply ?

(Q4) What causes a movement along a supply curve of a good ?

(Q5) When the supply of a commodity is called “elastic” ?

(Q6) What causes downward movement of supply curve ?

(Q7) Es= 0.8 . Is the supply elastic or inelastic ? why

(Q8) List any three determinants of supply of a commodity.

(Q9) Distinguish between increase in quantity supplied and increase in supply ?

(Q10) Explain three causes of rightward shift of supply curve ?

(Q11) Define price Es ? How it is measured by geometric method ? ( in case of straight line supply curve ) or Explain two method of measuring Es ?

(Q12) Explain four determinants of the market supply of a commodity ?

(Q13) A 5 percent rise in price of a commodity results in rise in its quantity supplied from 300 units to 370 units. Find Es ? Is its supply elastic ?

(Q14) The quantity supplied of a commodity fall from Rs 10 per unit to Rs 9 , its Q.S falls by 20 %.Find Es ?

(Q15) The Q.S of a commodity at a price of Rs 8 is 400 units. Its Es= 2. Calculate the price at which its Q.S will be 600 units .

(Q16) The Es = 2. when its price falls from Rs 10 to Rs 8 per unit, its Q.S fall by 500 units. Calculate the Q.S at reduced price ?

(Q17) When the price rises from Rs 10 to Rs 11 per unit, its Q.S rises by 100 units. Its Es = 2. Calculate its Q.S at increased price .
 

CBSE 2008 + Sample Paper Questions

(Q1) What is ‘market supply’ ?(1)

(Q2) What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75º ?(1)

(Q3) What is the likely effect on the supply of a good if the prices of the inputs used in production of that good fall? Explain.(4)

(Q4) Draw supply curves with price elasticity of supply throughout equal to

(i) zero (ii) one
(iii) infinity and (iv) less than one.

(Q5) Distinguish between (i) elastic and inelastic supply and (ii) Perfectly elastic and perfectly inelastic supply.

(Q6) What is the likely effect on the supply of a god if a unit tax is imposed on that good ? Explain.

(Q7) What is the likely effect of technological progress on the supply of a good? Explain.

(Q8) State the law of supply. What is meant by the assumption other things remaining the same on which the law is based? (3)

(Q9) What will be the price elasticity of supply if the supply curve is a positively sloped straight line?

(Q10) Give one reason for rightward shift in supply curve ?(1)

(Q11) Explain the effect of fall in prices of other goods on the supply of a given good(3)

(Q12) The price elasticity of supply of commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in the price X results in a 40 percent rise in its supply. If the price of Y falls by 8 percent, calculate the percentage fall in its supply.(4)

CBSE 2010 + Sample Paper Questions

(Q1) Total revenue is Rs. 400 when the price of the commodity is rs. 2 per unit. when price rises to Rs. 3 per unit, he quantity supplied is 300 units. Calculate the price elasticity of supply.(3M)

(Q2) What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75° ?(1M)

(Q3) State the ‘law of supply’. What is meant by the assumption ‘other things remaining the same’ on which the law is based ?(3 M)

(Q4) The price elasticity of supply of good X is half the price elasticity of supply of Good Y. A 10% rise in the price of good Y results in a rise in its supply from 400 units to 520 units. Calculate the percentage change in quantity supplied of good X when its price falls from Rs 10 to Rs 8 per unit.

(Q5) Explain the effect of the following on the supply of a commodity:(3 M)

(a) Fall in the prices of factor inputs.(b) Rise in the prices of other commodities.

(Q6) What will be the price elasticity of supply at a point on a positively sloped, straight line supply curve?(3M)

CBSE 2011 & CBSE 2012

(Q1) What is ‘decrease’ in supply ?(1 mark)

(Q2) Explain the distinction between “change in quantity supplied” and “change in supply”. Use diagram.

OR
Explain the distinction between “change in quantity supplied” and “change in supply” with the helpof a table.(6 marks)

(Q3) Explain how changes in prices of inputs influence the supply of a product.

(Q4) Define Market Supply . What is the effect on the supply of a good when government imposes a tax on the production of that good ? CBSE (D) 2011

(Q5) What is a Supply schedule . What is the effect on the supply of a good when government gives a subsidy on the production of that good ?CBSE (D) 2011

(Q6) The price of a commodity is rs 10 per unit and total revenue from it is Rs 1000. Its price elasticity of supply is O.8 . Its price falls by 10 % . Calculate the total revenue at the reduced price.Ans: 828

C.B.S.E & Sample Paper 2013

(Q1) Give one reason for an “increase” in supply of a commodity.(1 M)

(Q2) Give one reason for “decrease” in supply of a commodity.(1 M)

(Q3) Give the meaning of market supply.(1 M)

(Q4) Define supply.(1 M)

(Q5) A 15 percent rise in the price of a commodity raises its supply from 300 units to 345 units.Calculate its price elasticity of supply.(3 M)

(Q6) The price elasticity of supply of a commodity is 2.0. A firm supplies 200 units of it at a price of Rs. 8 per unit. At what price will it supply 250 units ?(3 M)

(Q7) A firm supplies 10 units of a good at a price of Rs. 5 per unit. Price elasticity of supply is 1.25.What quantity will the firm supply at a price of Rs. 7 per unit ?(3 M)

(Q8) Price elasticity of supply for a commodity is 5. When price of the commodity rises from Rs. 9 per unit to Rs.10 per unit, supply rises by 25 units. Calculate quantity supplied at Rs. 9 per unit.[ Ans. 45 units ]

(Q9)  Total revenue of a firm rises from Rs 100 to Rs 300 when the price of its product rises from Rs 20 per unit to Rs 30 per unit calculate elasticity of supply ?

(Q10) Total revenue of a firm risse from Rs 400 to Rs 500 when the price of its product rises from Rs 20 per unit to Rs 25 per unit calculate elasticity of supply ?

(Q11)  When is elasticity of supply called inelastic ?

Ans :: W hen proportionate change in supply is less than proportionate change in price.

(Q12) Explain the differnece between Movement along the Supply and ‘Shift of Supply Curve’ ? use digram

Ans: Movement along the Supply curve takes place when supply changes only on account of change in own price of the good. For example movement from point A to B implies that supply has risen from OQ1 to OQ2 on account of rise in price from OP1 to OP2 ‘Shift of Supply Curve’ takes place when supply changes on account of any factor other than own price of the good. For example, movement from A to B or from B to C is not on account of change in price OP. It must be on account of some other factor.

Scanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRevScanner - Supply and Elasticity of Demand (2008-2015) Commerce Notes | EduRev

 

C.B.S.E Paper 2014

(Q1) What is market supply of a product ?(1M)

Ans:  Market supply of good is the sum total of quantities that all the producers of that good are willing to supply at a price during a period of time

(Q2) Explain how technological progress is a determinant of supply of a good by a firm.(3M)

Ans: Technological progress leads to reduction in cost of producing output. Price remaining unchanged, less cost means more profit. This increases supply of the good.

(Q3) Explain how input prices are a determinant of supply of a good by a firm.(3M)

Ans: Suppose input prices rise. This raises cost. Price of the good remaining unchanged, profits fall. This discourages the producer so supply will decrease. Opposite happens if the input prices fall.

(Q4) Explain any three causes of decrease in supply of a good.(3M)

(Q5) Explain the effect of -(6M)

(i) Technological advancement ; and
(ii) Subsidy on production of a good on supply of a commodity.

(Q6) How does change in per unit tax effect supply of good by a firm ?

Ans: Suppose per unit tax is raised. This raises cost of producing the good. Price remaining unchanged, profits decline. This is disincentive to producers who supply less.

Sample Paper 2015

(Q1) What is meant by change in supply and change in quantity supplied ?

Ans: Change in quantity supplied means when more is supplied at a higher price (expansion) or when less is supplied at a lower price (contraction). It leads to an upward or downward movement along the supply curve.  It is caused due to a change in the own price of the commodity, other factor affecting supply areheld constant.
Change in supply means more is supplied at the same price (increase) or less is supplied at the same price (decrease).  It leads to a rightward or leftward shift of the supply curve. It is caused due to a change in other factors affecting supply and not a change in the own priceof the commodity.

(Q2) ‘Supply curve is the rising portion of marginal cost curve over and above the minimum of Average Variable cost curve’. Do you agree? Support your answer with valid reason. (3M)

Ans: Yes, we do agree with the given statement that the supply curve is the rising portion of marginal cost curve over and above the minimum of Average Variable cost curve, since no rational producer/seller would like to supply his output to the market if he is unable to recover his per unit variable cost as it would lead to losses between the range of minimum of marginal cost and minimum of average variable cost.

(Q3) Distinguish between stock and supply.

Ans: Stock refers to the total quantity of a commodity available with the seller at any given time. Whereas Supply refers to that quantity of a commodity which a seller is willing to sell at different prices during a given period of time.

(Q4) Apply the geometric method to determine the elasticity of supply at point L on the supply curve SS given above.3(M)

 

C.B.S.E Paper 2015

(Q1) Explain the significance of ‘minus sign’ attached to the measure of price elasticity of demand in case of a normal good, as compared to the ‘plus sign’ attached to the measure of price elasticity of supply.(3M)

Ans: The measure of price elasticity of demand has a minus sign because there is inverse relation between price and demand of a normal good, while the measure of price elasticity of supply has plus sign because there is direct relation between price and supply of a good.

(Q2) ‘Supply curve is the rising portion of marginal cost curve over and above the minimum of Average Variable cost curve’. Do you agree? Support your answer with valid reason.[SP (3M)]

(Q3) What is ‘change in supply’ ? Explain the effect of tax imposed on a good on the supply of the good.

Ans: “Change in supply” refers to increase / decrease in supply due to a change in any factor other than the own price of the good.  Imposition of tax raises cost. Price remaining unchanged, profit falls. So producers supply less.

(Q4)  Explain the effect of the following on market supply of a good : (6)

(a) Increase in input prices (b) Reduction in per unit tax

Ans: (a) When input price increases, cost of production rises. Price of the product remaining the same, profit falls. This will reduce market supply.

(b) Reduction in per unit tax will reduce the cost of production. Price remaining the same, profits will increase. So the producers will produce more and market supply will increase.

(Q5)  Giving reasons, state whether the following statements are true or false : “The supply curve of a good shifts to the right when prices of other goods rise.”

Ans: False, W hen price of other goods rise, it becomes more profitable to produce them in place of the given good, so supply curve will shift to left.

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