CBSE Class 12 Economics HOTs All Chapters Set B

Quick Revision Question and Answers for Low Achievers

One Mark Questions (1M)

1. What is opportunity cost?

Opportunity cost refers to the cost of the next best alternative foregone.

2. Define Marginal rate of transformation.

It is the amount of one good that must be given to produce one additional unit of a second good. It is also known as marginal opportunity cost.

3. Give two examples of Micro economic variables/ studies.

    a. Individual demand

    b. Individual savings

4. Why does an economic problem arise?

It is due to unlimited wants and limited resources.

5. What is meant by inferior goods in economics?

Inferior goods refer to those goods whose demand decreases with rise in income of the consumer.

6. Define budget line.

Budget line shows all combinations of two goods that a consumer can buy with his income at a given price.

7. What is a demand schedule?

It is a tabular representation of different quantities demanded at different levels of prices

8. Define normal goods.

Normal goods are those goods whose demand rises with increase in income of consumer.

9. Define indifference curve.

It shows the various combinations of two goods which provide same level of satisfaction to the consumer.

10. Define production function.

It refers to the functional relationship between inputs and outputs.

11. Define Marginal physical product.

It refers to the addition made to the total product

12. Define revenue.

It refers to total money income from the sale of output

13. Define marginal revenue.

It refers to the addition made to the total revenue.

14. Why is the ATC greater than AVC

ATC is greater than AVC because ATC includes AVC and AFC

15. Define fixed cost.

Fixed costs refer to cost which remains constant as output changes. For e.g.: rent

16. Define equilibrium price.

Equilibrium price refers to a price at which market demand and market supply are equal.

17. In which market form the products are differentiated.

Monopolistic competition

18. In which market form a firm is a price taker?

Perfect competition

19. Why is demand curve under oligopoly indeterminate (uncertain)?

Demand curve is indeterminate because of price war between the sellers.

Please refer to attached file for CBSE Class 12 Economics HOTs All Chapters