11th - Economics - Book Back Answers - Unit 4 - English Guides

  

 


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    Tamil Nadu Board 11th Standard Economics - Unit 4 : Book Back Answers and Solutions

        This post covers the book back answers and solutions for Unit 4 – 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 4 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 4: Costs and Revenue Analysis


    I. Multiple Choice questions.

    1. Cost refers to

    a. price
    b. value
    c. fixed cost
    d. cost of production 
    Answer key: 
     d. cost of production     
                      
    2. Cost functions are also known as function.
    a. production
    b. investment
    c. demand
    d.consumption
    Answer key:  
    a. production  
     
    3. Money cost is also known as cost.
    a. explicit
    b. implicit
    c. social
    d. real
    Answer key: 
    a. explicit  
     
    4. Explicit cost plus implicit cost denote cost.
    a. social
    b. economic
    c. money
    d. fixed  
    Answer key: 
    b. economic  
     
    5. Explicit costs are termed as
    a. out of pocket expenses
    b. real cost
    c. social cost
    d. sunk cost
    Answer key:  
    a. out of pocket expenses 
     
    6. The costs of self–owned resources are termed as cost.
    a. real
    b. explicit
    c. money
    d. implicit
    Answer key:  
    d. implicit  
     
    7. The cost that remains constant at all levels of output is cost.
    a. fixed
    b. variable
    c. real
    d. social
    Answer key:  
    a. fixed  
     
    8. Identify the formula of estimating average variable cost.
    a. TC/Q
    b. TVC/Q
    c. TFC/Q
    d. TAC/Q
    Answer key: 
    b. TVC/Q  
     
    9. The cost incurred by producing one more unit of output is cost.
    a. variable
    b. fixed
    c. marginal
    d. total
    Answer key:  
    c. marginal  
     
    10. The cost that varies with the level of output is termed as cost.
    a. money
    b. variable cost
    c. total cost
    d. fixed cost
    Answer key:  
    b. variable cost 
     
    11. Wage is an example for cost of the production.
    a. fixed
    b. variable
    c. marginal
    d. opportunity 
    Answer key:
    b. variable  
    12. The cost per unit of output is denoted by----- cost.
    a. average
    b. marginal
    c. variable
    d. total
    Answer key: 
    a. average  
     
    13. Identify the formula of estimating average cost.
    a. AVC/Q
    b. TC/Q
    c. TVC/Q
    d. AFC/Q
    Answer key: 
    b. TC/Q  
     
    14. Find total cost where TFC=I00 and TVC = 125.
    a. 125
    b. 175
    c. 225
    d. 325
    Answer key: 
    c. 225  
     
    15. Long-run average cost curve is also called as curve.
    a. demand
    b. planning
    c. production
    d. sales
    Answer key:  
    b. planning  
     
    16. Revenue received from the sale of products is known as revenue.
    a. profit
    b. total revenue
    c. average
    d. marginal
    Answer key: 
    b. total revenue  
     
    17. Revenue received from the sale of additional unit is termed as revenue.
    a. profit
    b. average
    c. marginal
    d. total
    Answer key:  
    c. marginal  
     
    18. Marginal revenue is the addition made to the
    a. total sales
    b. total revenue
    c. total production
    d. total cost
    Answer key: 
    b. total revenue  
     
    19. When price remains constant, AR will be---MR.
    a. equal to
    b. greater than
    c. less than
    d. not related to
    Answer key:  
    a. equal to  
     
    20. A book seller sold 40 books with the price of Rs.10 each. The total revenue of the seller is RS. .
    a. 100
    b. 200
    c. 300
    d. 400  
    Answer key:  
    d. 400   
     

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

    21. Define cost.                                                       
    Cost refers to the total expenses incurred in the production of a commodity.
     
    22. Define cost function.
    The functional relationship between cost and output is expressed as ‘Cost Function’(or)
    C = f ( Q )
    where, C=Cost and Q=Quantity of output.
     
    23. What do you mean by fixed cost?
    Expenses on fixed factors are called fixed cost.

    24. Define Revenue.  

    The amount of money that a producer receives in exchange for the
    sale of goods is known as revenue.

    25. Explicit Cost - Define.

    It refers to the actual expenditures of the firm to purchase or hire the inputs the firm needs.
     
    26. Give the definition for ‘Real Cost’.
    It includes the efforts and sacrifices landlords in the use of land.
     
    27. What is meant by Sunk cost?
    A cost incurred in the past and cannot be recovered in future is called as Sunk Cost

    III. Answer the following questions in one paragraph.

    28. Distinguish between fixed cost and variable cost.
    Fixed cost
    Variable cost
    Expenses on fixed factors are called fixed cost
    Expenses on variable factors are calledvariable cost
    Fixed cost does not vary with the level of output
    Variable cost vary with the level of output
    Eg : Rent, Interest
    Eg : Factor Price, Wages
     
    29. State the differences between money cost and real cost.
    Money cost
    Real Cost
    Production cost expressed in terms of money is called as money cost
    Real cost expressed in terms of efforts and sacrifices of the owner.
    It includes cost of raw materials and wages
     
     it includes the expenses on owner’s own land and vechiles
    Money costs are also called NominalCost or Explicit Cost
    Real costs are called Opportunity Cost
     
     
    30. Distinguish between explicit cost and implicit cost.
    Explicit cost
    Implicit cost
    It includes actual money expenditure incurred by a firm
    It is not actual money expenditure incurred by a firm
    It enters in the firms books of accounts
    It does not enter in the firms books of accounts
    It is payment concept
    It is receipt concept

    31. Define opportunity cost and provide an example.
    1. It refers, the value of the next best alternative foregone.
    2 .For example, a farmer cultivate paddy instead of sugar cane,the opportunity cost of paddy out put is the amount of sugarcane output given up.
     
    32. State the relationship between AC and MC.
    1. When MC < AC , AC falls
    2. When MC = AC ,AC is Constant at it’s minimum point
    3. When MC > AC , AC rises
     
    33. Write a short note on Marginal Revenue.
    Marginal Revenue is the addition to the total revenue by the sale of an additional unit of a commodity.
    MR = ΔTR/ ΔQ
    1. MR curve perfectly elastic in perfect completion.
    2. MR curve less elastic in monopoly
     
    34. Discuss the Long run cost curves with suitable diagram.
    1. In the long run all factors of production become variable.
    2 LAC = LTC/Q
    3. The LAC curve is derived from short- run average cost curve
    4. It is the locus of points denoting the least cost curve of
    producing the corresponding output.
    Other names of LAC:
    The LAC curve is called as ‘Plant Curve’ or ‘Boat shape
    Curve’ or ‘Planning Curve’ or ‘Envelop Curve

    IV. Answer the following questions in about a page.

    35. If total cost = 10+Q3, find out AC, AVC, TFC, AFC when Q=5.
    TC=TFC+TVC
    AVC=TVCQ 
    AFC=TFCQ 
    AC=TCQ 
    (i) TC=10+Q3 Total cost has two components TFC and TVC.
    (ii) TFC=is the total fixed cost which does not change with the level of output.
    (iii) It is determined by putting the the value of Q.
    (iv) Given the total cost function TC=10+Q3
    Q=units of output where Q=5
    Here TFC=10(TFC will not change when output changes)
    TC=10+(5)3
    TC=10+125
    TC=135
    135=10+TVC
    135-10=TVC
    125=TVC
    TVC=125, TC=135, therefore TFC?
    TC=TFC +TVC
    135=x+125
    135-125=10
    TFC=10 
    AFC=TFCQ
    AFC=105 
    AFC=2
    AVC=TVCQ 
    AVC=1255 
    AVC=25 
    AC=TCQ
    AC=1355
    AC=27 
     
    36. Discuss the short run cost curves with suitable diagram.
    Short run cost curves:
    1. TFC - Total Fixed Cost Curve
    2. TVC - Total Variable Cost Curve
    3. TC - Total Cost Curve
    4. AFC - Average Fixed Cost Curve
    5. AVC - Average Variable Cost Curve
    6. AC OR ATC - Average Cost or Average Total Cost
    7. MC - Marginal Cost


    Short run average cost curves
    Total cost
    Total cost is the sum of total fixed cost and total variable cost.
    TC = TFC + TVC
    TC = Total cost
    TFC = Total Fixed cost (cost of fixed factors)
    TVC = Total variable cost (Cost of Variable Factors)
    Short run average cost curves
    Average Fixed Cost (AFC)
    The average fixed cost is the fixed cost per unit of output. It is obtained by dividing the total fixed
    cost by the number of units of the commodity produced.
    AFC = TFC / Q
    Average Variable cost (AVC)
    Average variable cost is the variable cost per unit of output. It is the total variable cost divided
    by the number of units of output produced.
    AVC = TVC / Q
    Average Total Cost or Average Cost
    Average total cost is simply called average cost which is the total cost divided by the number of units of
    output produced.
    AC = TC / Q (or)
    AC = AFC+AVC
    Marginal Cost
    Marginal cost is defined as the addition made to the total cost by the production of one additional
    unit of output.
    MCn = TCn – TCn-1
     
    37. Bring out the relationship between AR and MR curves under various price conditions.
    Average Revenue
    AR = TR / Q
    Marginal Revenue
    MRn = TRn – TRn-1
    Explanation
    1. If a firm is able to sell additional units at the same price then AR and MR will be constant and equal (Perfect Competition)
    2. If the firm is able to sell additional units only by reducing the price, then both AR and MR will fall and be different (Monopolistic Competition)
     





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