11th Economics - Book Back Answers - Unit 2 - English Medium Guides

  

 


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    Tamil Nadu Board 11th Standard Economics - Unit 2 : Book Back Answers and Solutions

        This post covers the book back answers and solutions for Unit 2– Economics from the Tamil Nadu State Board 11th Standard textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

        We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

        By going through this material, you’ll gain a strong understanding of Economics Unit 3 along with the corresponding book back questions and answers (PDF format).

    Question Types Covered:

    • 1 Mark Questions: Choose the correct answer, Fill in the blanks, Identify the correct statement, Match the following 
    • 2 Mark Questions: Answer briefly 
    • 3, 4, and 5 Mark Questions: Answer in detail

    All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

    All the best, Class 11 students! Prepare well and aim for top scores. Thank you!

    Unit 2:Consumption Analysis


    I. Multiple Choice questions.

    1. Pick the odd one out
    a. Luxuries
    b. Comforts
    c. Necessaries
    d. Agricultural goods
    Answer key:
    d. Agricultural goods

    2. Choice is always constrained or limited by the - --- of our resources.
    a. Scarcity
    b. Supply
    c. Demand
    d. Abundance
    Answer key:
    a. Scarcity
     
    3. The chief exponent of the Cardinal utility approach was
    a. J.R.Hicks
    b. R.G.D.Allen
    c. Marshall
    d. Stigler
    Answer key:
    c. Marshall

    4. Marginal Utility is measured by using the formula of
    a. TUn-TUn-1
    b. TUn-TUn+1
    c. TUn+TUn+1
    d. TUn-TUn+1
    Answer key:
    a. TUn-TUn-1
     
    5. When marginal utility reaches zero, the total utility will be
    a. Minimum
    b. Maximum
    c. Zero
    d. Negative
    Answer key:
    b. Maximum
     
    6. Gossen’s first law is known as.
    a. Law of equi-marginal utility.
    b. Law of diminishing marginal utility
    c. Law of demand.
    d. Law of Diminishing returns.
     Answer key:
    b. Law of diminishing marginal utility
     
    7. The basis for the law of demand is related to
    a. Law of diminishing marginal utility
    b. Law of supply
    c. Law of equi-marginal utility.
    d. Gossen’s Law.
    Answer key:
    a. Law of diminishing marginal utility
      
    8. The concept of consumer’s surplus is associated with
    a. Adam Smith
    b. Marshall
    c. Robbins
    d. Ricardo
    Answer key:
    b. Marshall
      
    9. Given potential price is Rs.250 and the actual price is Rs.200. Find the consumer surplus.
    a. 375
    b. 175
    c. 200
    d. 50
    Answer key:
     d. 50 
     
    10. Indifference curve approach is based on
    a. Ordinal approach
    b. Cardinal approach
    c. Subjective approach
    d. Psychological approach
    Answer key:
    a. Ordinal approach 
     
    11. The concept of elasticity of demand was introduced by
    a. Ferguson
    b. Keynes
    c. Adam Smith
    d. Marshall
    Answer key:
     d. Marshall 
     
    12. Increase in demand is caused by
    a. Increase in tax
    b. Higher subsidy
    c. Increase in interest rate
    d. decline in population
    Answer key:
     b. Higher subsidy
     
    13. The movement on or along the given demand curve is known as
    a. Extension and contraction of demand.
    b. shifts in the demand.
    c. increase and decrease in demand.
    d. all the above
    Answer key:
     a. Extension and contraction of demand.
     
    14. In case of relatively more elastic demand the shape of the curve is
    a. Horizontal
    b. Vertical
    c. Steeper
    d. Flatter
    Answer key:
    15. A consumer is in equilibrium when marginal utilities from two goods are
    a. Minimum
    b. Inverse
    c. Equal
    d. Increasing
    Answer key:
    d. Increasing 
      
    16. Indifference curve was first introduced by
    a. Hicks
    b. Allen
    c. Keynes
    d. Edgeworth
    Answer key:
     c. Keynes
     
    17. Elasticity of demand is equal to one indicates
    a. Unitary Elastic Demand
    b. Perfectly Elastic Demand
    c. Perfectly Inelastic Demand
    d. Relatively Elastic Demand
    Answer key:
     d. Relatively Elastic Demand 
     
    18. The locus of the points which gives same level of satisfaction is associated with
    a. Indifference Curves
    b. Cardinal Analysis
    c. Law of Demand
    d. Law of Supply
    Answer key:
     a. Indifference Curves
     
    19. Ordinal Utility can be measured by
    a. Ranking
    b. Numbering
    c. Wording
    d. None of these
    Answer key:
    a. Ranking 

    20. The indifference curve are
    a. vertical
    b. horizontal
    c. positive sloped
    d. Negatively sloped
    Answer key:
    d. Negatively sloped  

    II. Answer the following questions in one or two sentences.

    21. Define Utility.
    Utility is the want-satisfying power of a commodity or a service.
      
    22. Mention the classifications of wants.
    1. Necessaries : food                     
    2. Comforts : TV, Fan                     
    3. Luxuries : Diamonds and Cars.

    23. Name the basic approaches to consumer behaviour.

        1. Cardinal Approach 
        2. Ordinal Approach
     
    24. What are the degrees of price elasticity of Demand?
    Ep = ∞
    Ep =0
    Ep>1
    Ep<1
    Ep =1
     
    25. State the meaning of indifference curves.
        An Indifference Curve is the locus of all combinations of any two goods which give equal satisfaction to the consumer.
     
    26. Write the formula of consumers surplus.
        Consumer’s surplus = Potential price – Actual price
     
    27. What are Giffen goods? Why?
                 ·         Rice and Ragi
    ·         When the price of an inferior good falls, the poor will buy less and vice versa.

    III. Answer the following questions in one paragraph.

     28. Describe the feature of human wants.
     1. Wants are unlimited
     2. Wants become habits
     3. Wants are Alternative
     4. Wants are Competitive
     5. Wants are complementary
     6. Wants are recurring
     
    29. Mention the relationship between marginal utility and total utility.
    MARGINAL UTILITY
    TOTAL UTILITY
    It declines
    It increases
    It reaches zero
    It reaches maximum
    It becomes negative
    It declines

    30. Explain the concept of consumer’s equilibrium with a diagram.
    Meaning ; Consumer will attain equilibrium when he gets maximum satisfaction from his expenditure on different goods is highest.
         E is the point of equilibrium as budget line AB is tangent on indifference curve IC2 the upper IC which implies maximum possible level of satisfaction.
        At equilibrium point, MRSx,y = Px/Py.
     
    31 & 33. Explain the theory of “consumer’s surplus” .
        “The excess of price which a person would be willing to pay rather than go without the thing, over that which he actually does pay, is the economic measure of this surplus of satisfaction.
     It may be called consumer's surplus.
         
     where, TU = Total Utility, P = Price and Q= Quantity of the commodity
     
    32. Distinguish between extension and contraction of demand
     

     
     33.What are the properties of indifference curves?
            4. Indifference Curves are convex to the origin

    IV. Answer the following questions in about a page.

    34. Explain the law of demand and its exceptions.

    Definition
        According to Alfred Marshall, The Law of Demand said as “the quantity demanded increases
            with a fall in price and diminishes with a rise in price”.
        Assumptions of Law of Demand
        1. The income of the consumer remains constant.
        2. The taste, habit and preference of the consumer remain the same.
        3. The prices of other related goods should not change
     DEMAND SCHEDULE 

    Price
    Demand
    3
    1
    2
    2
    1
    3

       Explanation
        1. Quantity demanded and Y axis represents the price of the commodity.
        2. DD is the demand curve, which has a negative slope.
        A fall in price brings about a contraction of demand and a rise in price results in an extension of demand. Therefore the demand curve slopes upwards from left to right.
     
        Exception to the Law of Demand
        1. Giffen Paradox
        2. Veblan Effect
        3. Speculation
        4. Ignorance

    35. Elucidate the law of diminishing marginal utility with diagram.

          Definition
         Marshall states the law as, “the additional benefit which a person derives from a given increase
            of his stock of a thing, diminishes with every increase in the stock that he already has”.
         Assumption
            1. Utility can be measured by cardinal number (Eg:1,2, 3..)
            2. The marginal utility of money remains constant. 
     
    Units of Apple
    TU
    MU
    1
    20
    20
    2
    30
    10
    3
    30
    0
    4
    25
    -5

                        
     

     

    Explanation
    1. Suppose a consumer wants to consume 4 apples one after another.
    2. The utility from the first apple is 20. But the utility from the second apple will be less than that of the first (say 10), the third less than that of the second (say 0) and so on.
    3. Finally, the utility from the third apple becomes zero and the utilities from fourth apples are negative.
     
    36. What are the methods of measuring Elasticity of demand?
        Methods of measuring Elasticity of Demand:
    1.The Percentage Method 2. Total Outlay Method 3. Point or Geometrical Elasticity  
         1. The Percentage Method
          It is also known as ratio method, when we measure the ratio as:
          2. Total Outlay Method
      This examines the change in total outlay of the consumer or total revenue of the firm 
         3. Point or Geometrical Elasticity   
     

        L - Lower segment of the demand curve
         U- Upper segment of t e demand curve

    37. Explain the law of Equi-marginal utility.
    Meaning
    ·         The law of equi-marginal utility states that the consumer will distribute his money
    ·         income between the goods in such a way that the utility derived from the last rupee spend on each good is equal.
    ·         . In other words, consumer is in equilibrium position when marginal utility of money expenditure on each goods is the same.
    Equi-marginal =
    Assumption
        1. The consumer is rational in the sense that he wants to get
    maximum satisfaction.
        2. The utility of each commodity is measurable in cardinal numbers.
    Explanation 
        1. X axis represents the amount of money spent and Y axis represents the marginal
    utilities of Apple and Orange respectively.
        2. If the consumer spends .6 on Apple and .5 on Orange, the marginal utilities of
    both are equal i.e.,AA1=BB1 (4=4).
        3. Hence, he gets maximum utility.
     






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