11th Economics - Book Back Answers - Unit 3 - 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 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”
     
    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
    Three Phases of Returns to Scale
    © 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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