PRINCIPLES OF ECONOMICS UNIT -3

Questions:

1. What does law of demand explain?
2. What are the assumptions of law of demand?
3. What are the exceptions of law of demand?
4. What are the different types of elasticity?
5. State the different degrees of price elasticity.
6. Suppose that the cross price elasticity of demand between bread and butter is – 0.5.What would you expect to happen to demand for butter if the price of bread rises by 10 percent?
7. A 10 percent increase in income brings about a 15 percent decreases in the demand for a good. What is the income elasticity of demand and is the normal good or an inferior good?
8. Write a note on consumer surplus.
9. Define Total Cost.
10. Define Average Cost.
11. Define Marginal Cost.
12. Explain TC MC AC in detail.