Plus one / 11th Economics - Book Back Answers - Unit 3 - English Medium
Tamil Nadu Board 11th Standard Economics - Unit 2 : Book Back Answers and Solutions
This post covers the book back answers and solutions for Unit 3– 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 3:Production Analysis
I. Multiple Choice questions.
1. The primary factors of production
are:
a. Labour and Organisation
b. Labour and Capital
c. Land and Capital
d. Land and Labour.
Answer key:
d. Land and Labour.
2. The man-made physical goods used
to produce other goods and services are referred to as.
a. Land
b. Labour
c. Capital
d. Organization.
Answer key:
c. Capital
3. Formula for calculating AP is
a. ΔTP/N
b. ΔTP/ΔN
c. TP/MP
d. TP/N
Answer key:
d. TP/N
c. Organizer
4. Which factor is called the
changing agent of the Society
a. Labourer
b. Land
c. Organizer
d. Capital
Answer key:
c. Organizer
5.Who said, that one of the key of an
entrepreneur is
“uncertainty-bearing”.
a. J.B.Clark
b. Schumpeter
c. Knight
d. Adam Smith
Answer key:
c. Knight
6. The functional relationship
between “inputs” and “outputs” is called as
a. Consumption Function
b. Production Function
c. Savings Function
d. Investment Function
Answer key:
c. Savings Function
7. In a firm 5 units of factors
produce 24units of the product. When the number of factor increases by one, the
production increases to 30 units. Calculate the Avarage Product.
a. 30
b. 6
c. 5
d. 24
Answer key:
b. 6
8. The short-run production is
studied through
a. The Laws of Returns to Scale
b. The Law of Variable Proportions
c. Iso-quants
d. Law of Demand
Answer key:
b. The Law of Variable Proportions
9. The long-run production function
is explained by
a. Law of Demand
b. Law of Supply
c. Returns to Scale
d. Law of Variable Proportions
Answer key:
c. Returns to Scale
10. An Iso-quant curve is also known
as
a. Inelastic Supply Curve
b. Inelastic Demand Curve
c. Equi-marginal
Utility
d. Equal Product Curve
Answer key:
d. Equal Product Curve 11. Mention the
economies reaped from inside the firm
a.
financial
b.
technical
c. managerial
d. all of the above
Answer key:
d. all of the above
12. Cobb-Douglas
production function assumes
a. Increasing returns to scale
b. Diminishing returns to scale
c. Constant returns to scale
d. All of the above
Answer key:
c. Constant returns to scale
13. Name the
returns to scale when the output increases by more than 5%, for a 5% increase
in the inputs,
a. Increasing returns to scale
b. decreasing returns to scale
c. Constant returns to scale
d. All of the above
Answer key:
a. Increasing returns to scale
14. Which of the
following is not a characteristic of land?
a. Its limited supply.
b. It is mobile
c. Heterogeneous
d. Gift of Nature
Answer key:
b. It is mobile
15.
Product obtained from additional factors of production is termed as
a.
Marginal
product
b. Total
product
c. Average
product
d. Annual
product
Answer key:
a.
Marginal
product
16. Modern
economists have propounded the law of
a. Increasing returns
b. decreasing returns
c. Constant returns
d. variable proportions.
Answer key:
a. Increasing returns
17. Producer’s
equilibrium is achieved at the point where:
a. Marginal rate of technical substitution
(MRTS) is greater than the price ratio
b. MRTS is lesser than the price ratio
c. MRTS and price ratio are equal to each
other
d. The slopes of isoquant and isocost lines
are different.
Answer key:
c. MRTS and price ratio are equal to each
other
18. The
relationship between the price of a commodity and the supply of commodity is
a. Negative
b.
Positive
c. Zero
d. Increase
Answer key:
b.
Positive
19. If average product is decreasing,
then marginal product
a. must be greater than average
product
b. must be less than average product
c. must be increasing
d. both a and c
Answer key:
b. must be less than average product
20. A production function measures the relation between
a. input prices and output prices
b. input prices and the quantity of
output
c. the quantity of inputs and the
quantity of output.
d. the quantity of inputs and input prices.
Answer key:
c. the quantity of inputs and the
quantity of output.
II. Answer the following questions in one or two sentences.
21. Classify the factors of production.
Land,
Labour ,Capital and Organisation
22.
Define Labour.
It refers to any work undertaken for securing an income or reward
23.
State the production function.
Production function is the technological relationship between inputs and
outputs .
24.
Define Marginal Product of a factor.
It is the addition or the increment made to the total product when one more
unit of the variable input is employed. MP = ΔTP/ΔN
25. What
is Iso-cost line?
The iso-cost line illustrates all the possible combinations of two factors
that can be used at given
costs and for a given producer’s budget.
26. What
are conditions for Producer’s Equillibrium?
1.The
iso-cost line must be tangent to iso-quant curve
2.At
point of tangency, the iso-quant curve must be convex to the origin.
27. What
are the reasons for upward sloping supply curve?
As the
price of the commodity increases, the quantum supplied of the commodity also
increases.
Thus the supply curve has a positive slope (upward slop)
from left to right.
III. Answer the following questions in one paragraph.
28. What
are the characteristics of land?
1) Land is a primary factor of production.
2) Land is a passive factor of
production.
3) Land is the free gift of Nature
4) Land has no cost of production.
5) Land is fixed in supply. It is inelastic in supply
6) Land is permanent.
29.What
are the factors governing elasticity of supply?
1.Nature
of the commodity
3. Technical condition
2 .Cost
of production
4.Time factor
30. What
are the functions of Entrepreneur?
1.Initiation
2. Innovation
3.Coordination
4.
Control, Direction&Supervision.
5.Risk-taking and Uncertainty-bearing
31.
State and explain the elasticity of supply.
Elasticity of supply may be defined as the degree of responsiveness of
change in supply to change in price on the part of sellers.
Elasticity of Supply = proportionate change in supply / proportionate
change in price
32. Bring
out the Relationship among Total, Average and Marginal Products.
|
Stages
|
TP
|
MP
|
AP
|
|
I
|
Increases
|
reaches maximum
|
Increases-attain
maximum
|
|
II
|
increase
|
equal to zero
|
Equal to MP
|
|
III
|
Diminishes
|
Becomes negative
|
Continues to
diminish but always greater than zero
|
33. llustrate the
concept of producer’s Equilibrium
The producer manufactures a given amount of output with ‘least cost combination
of factors’,
with his given budget.
Conditions
for Producer Equilibrium:
·
The iso-cost line must be tangent to
iso-quant curve.
At point of tangency, the iso-quant curve
must be convex to the origin or MRTSLk must be declining. MRTSLX = PL / PX
34. State
the Cobb-, Douglas Production Function.
According Cobb-Douglas, “ Linear homogeneous production function implies
that the factors of
production can be substituted for one another up to a certain extent only.”
The
Cobb-Douglas production function can be expressed as follows.
Q = AL ά K β
Where, Q = output; A = positive constant; K = capital; L = Labor α and β
are positive fractions .
i) (ά
+ β) = 1, Constant returns to scale
ii)
(ά + β) < 1, Dimnishing returns to scale
iii) (ά + β) > 1 , Increasing
returns to Scale
IV. Answer the following questions in about a page.
35. Examine the Law of Variable Proportions with the help of a diagram.
Definition
According to G.Stigler, “As equal increments of one input
are added, the inputs of other
productive services being held constant, beyond a certain
point, the resulting increments of product will
decrease, i.e., the marginal product will diminish”.
Meaning
The law of variable proportions states that as the
quantity of one factor is increased, keeping the
other factors fixed, the marginal product of that factor
will eventually decline.
Assumptions
1. Only one factor is variable while
others are held
constant.
2. All units of the variable factor
are homogeneous.
3. The product is measured in
physical units.
Total Product (TP)
It refers to the total amount of commodity produced by
the combination of all inputs. TP = ΣMP
Average Product (AP)
It is the result of the total product divided by the
total
units of the input employed. AP = TP/N
Marginal Product (MP)
It is the addition or the increment made to the total
product. MP=ΔTP/ΔN (or) MP = TP (n) – TP (n-1)
In diagram, the number of workers is measured on X axis
while TP, AP MP are denoted on Y axis. The
diagram explains the three stages of production as given
in the below table.
36. List out the properties of iso-quants with the help of diagrams.
Meaning
An iso-quant curve can be defined as the locus of points
representing various combinations of two
inputs capital and labour yielding the same output.
The iso-quant is also called as the “Equal Product Curve”
or the “Product Indifference Curve”
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Properties of Iso-quant Curve
1. The iso-quant curve has negative
slope.
2. Convex to the origin.
3. Non inter-section of Iso-quant
curves.
4. An upper iso-quant curve
represents a higher level of output.
5. Iso- quant curve does not touch
either X axis Y axis.
37. Elucidate the Laws of Returns to Scale. Illustrate.
Meaning
The laws of returns to scale explain the relationship
between output and the scale of inputs in
the long-run when all the inputs are increased in the
same proportion.
Assumption
1. All the factors of production are
variable but organization is fixed.
2. There is no change in technology.
3. There is perfect competition in
the market.
4. Outputs or returns are measured
in physical quantities.|
Stages
|
Input
|
Output
|
Returns to Scale
|
|
a to b
|
100%
|
200%
|
Increasing
|
|
b to c
|
100%
|
100%
|
Constant
|
|
c to d
|
100%
|
33.33%
|
Decreasing
|
© Increasing
Returns to Scale:
© Constant
Returns to Scale:
© Diminishing
Returns to Scale:
Explanation
1. In the the movement from point a to point b represents
increasing returns to scale.
2. The law of constant returns to scale is implied by the
movement from the point b to point c.
3. Decreasing returns to scale are denoted by the movement from the point c
to point d.
38. Explain the internal and external economies of scale.
|
Basic Difference
|
Internal Economies
|
External Economies
|
|
1. Technical Economies:
|
There is a possibility to introduce up- to-date technologies
|
Increased transport facilities
|
|
2. Financial Economies:
|
Big firms can float shares in the
market for capital expansion,
|
Banking facilities |
|
3. Managerial Economies:
|
Large scale production facilitatesspecialisation and delegation.
|
Development of townships
|
|
4. Labour Economies:
|
Large scale production implies greaterand minute division of labour. |
Development of informationand communication
|
|
5. Marketing Economies:
|
The producers can both buy rawmaterialsin bulk at cheaper cost and cantake the products to distant markets.
|
Expansion of the Plant size
|
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