Chapter 1

2marks questions

1. What is meant by scarcity in economics?

2. Define the term economic problem.

3. Differentiate between positive and normative economics.

4. What is microeconomics?

5. What is macroeconomics?

6. What are the central problems of an economy?

7. Explain what is meant by ‘what to produce’.

8. Explain what is meant by ‘for whom to produce’.

9. State the meaning of ‘how to produce’.

10. Define opportunity cost.

11. Name the three types of economic systems.

12. What is a mixed economy?

13. What is a centrally planned economy?

14. What is a business cycle?

15. Name the four phases of a business cycle.

6-Mark Questions

1. Explain how the problem of scarcity gives rise to the central problems of an
economy.

2. Distinguish between positive and normative economics with suitable examples.

3. Compare and contrast microeconomics and macroeconomics in terms of scope

and applications.

4. Explain the central problems of an economy with the help of suitable examples.

5. What is the Production Possibility Curve (PPC)? Explain the implications of

points lying on, inside, and outside the PPC.

6. Define opportunity cost. How is it represented on the PPC?

7. Briefly describe the main features of the capitalist, socialist, and mixed
economic systems.
 8. Explain the phases of a business cycle with a neat diagram.

9. Highlight the basic characteristics of the Indian economy since independence.

10. Discuss recent trends in India’s economic growth and structural changes in
different sectors.

14-Mark Questions

1. Explain the concept of scarcity and choice. How do these lead to the basic
economic problems of what to produce, how to produce, and for whom to
produce?

2. Discuss in detail the nature and scope of economics. Is economics a positive or

a normative science? Justify your answer.

3. Compare microeconomics and macroeconomics in detail. How do they

complement each other in economic analysis?

4. Explain the concept and significance of the Production Possibility Curve (PPC).
Using diagrams, discuss shifts in the PPC and what they represent.

5. Describe the working of different types of economic systems (capitalist,

socialist, mixed). Discuss their advantages and limitations with examples.

6. Discuss the causes and effects of business cycles. Suggest measures for
stabilizing the economy during different phases.

7. Evaluate the basic structural characteristics of the Indian economy. How have
these features evolved over time?

8. Examine the recent trends in key sectors of the Indian economy (agriculture,
industry, and services). How have policy reforms shaped these trends?

9. Explain the concept of opportunity cost with examples. How does it help in
efficient resource allocation in an economy?

10. Analyze the central problems of an economy and illustrate how different
economic systems attempt to solve them.

Chapter 2

2-Mark Questions

1. Define demand in economics.

2. Mention any two determinants of demand.

3. What is meant by a demand schedule?

4. Differentiate between individual demand and market demand.

5. State the law of demand.

6. What does a rightward shift in the demand curve indicate?

7. Define elasticity of demand.

8. Mention any two methods of demand forecasting.

9. What is meant by the method of moving averages?

10. Define cardinal utility.

11. State the Law of Diminishing Marginal Utility.

12. What does the Law of Equi-Marginal Utility state?

13. Define an indifference curve.

14. What is a budget line?

15. Define consumer’s equilibrium.

6-Mark Questions

1. Explain the determinants of demand with suitable examples.

2. Discuss the business significance of consumption and demand.

3. Explain the difference between individual demand and market demand curves.

4. State and explain the law of demand with the help of a diagram and example.

5. Describe the types of elasticity of demand.

6. Discuss the causes for changes or shifts in the demand curve.

7. Explain the method of moving averages used in demand forecasting.

8. Explain the cardinal utility approach to consumer behavior.

9. State and explain the Law of Diminishing Marginal Utility with a diagram.

10. Describe the Law of Equi-Marginal Utility and its importance in consumer
choice.

11. Explain the concept of an indifference curve and its properties.

 12. Describe the concept of a budget line and how it relates to consumer choice.

13. Show how a consumer attains equilibrium using the indifference curve analysis.

14-Mark Questions

1. Define demand. Explain the law of demand, its assumptions, exceptions, and
importance in business decision-making.

2. Discuss in detail the determinants of demand and the reasons for variations in
demand.

3. Explain elasticity of demand—its types, measurement methods, and

significance in pricing decisions.

4. Discuss the different methods of demand forecasting. Illustrate the statistical

methods like the Moving Average and Least Squares method with suitable
examples.

5. Examine the relationship between consumption, utility, and demand.

6. Explain the Cardinal Utility approach in detail, discussing the Laws of

Diminishing and Equi-Marginal Utility with diagrams.

7. Describe the Indifference Curve Approach in detail. How does a consumer attain
equilibrium using the indifference curve and budget line?

8. Compare and contrast the Cardinal Utility and Indifference Curve approaches to
consumer behavior.

9. Analyze how changes in income and prices affect consumer equilibrium using
the indifference curve framework.

10. Discuss the importance of understanding consumption and demand analysis in

business decision-making.

CHAPTER- 3

2-Mark Questions

1. Define production in economics.

2. What is meant by a production function?

3. List the factors of production.

4. State two characteristics of factors of production.

 5. What is meant by the short-run in production analysis?

6. Define total product (TP).

7. What is average product (AP)?

8. Define marginal product (MP).

9. State the relationship between TP, AP, and MP.

10. What are fixed factors of production?

11. What are variable factors of production?

12. Define the Law of Variable Proportions.

13. What are economies of scale?

14. What are diseconomies of scale?

15. Define returns to scale.

6-Mark Questions

1. Explain the concept of a production function with examples.

2. Discuss the different factors of production and their characteristics.

3. Distinguish between fixed and variable factors of production.

4. Explain the concepts of total product, average product, and marginal product
with a diagram.

5. Describe the relationship among TP, AP, and MP.

6. Explain the Law of Variable Proportions using a diagram.

7. Distinguish between the classical and modern approaches to the Law of

Variable Proportions.

8. What is meant by returns to scale? Explain its types with examples.

9. Describe internal and external economies of scale.

10. Discuss the role of the production possibility curve in illustrating opportunity
cost.

14-Mark Questions
 1. Explain in detail the production function and its significance in business
decision-making.

2. Discuss the different factors of production and explain their characteristics and
importance in the production process.

3. Describe the Law of Variable Proportions. Explain its stages and underlying
assumptions with the help of a diagram.

4. Compare the classical and modern approaches to the Law of Variable

Proportions.

5. Explain the Law of Returns to Scale. Illustrate with diagrams the three stages of
returns (increasing, constant, and diminishing).

6. Discuss the concept of economies and diseconomies of scale. How do they

affect the cost of production?

7. Explain the relationship between total product, average product, and marginal
product with graphical presentation.

8. Explain the importance of the Production Possibility Curve (PPC) in

understanding resource allocation and opportunity cost.

9. Distinguish between short-run and long-run production functions. How does the
nature of factors change between the two?

10. Analyze how economies and diseconomies of scale influence business

decisions and planning.

Chapter – 4

2-Mark Questions

1. Define supply.

2. What is meant by a supply schedule?

3. Distinguish between individual supply and market supply.

4. State the law of supply.

5. Mention any two determinants of supply.

6. What is meant by equilibrium price?

7. Define elasticity of supply.

 8. What happens when there is an increase in supply?

9. What happens when there is a decrease in supply?

10. Define cost in economics.

11. What are sunk costs?

12. What are direct costs?

13. What is a fixed cost?

14. Define variable cost.

15. What is marginal cost (MC)?

6-Mark Questions

1. Explain the concept of supply and its determinants.

2. Differentiate between individual supply and market supply curves.

3. State and explain the law of supply with the help of a diagram.

4. Distinguish between extension and contraction of supply.

5. Explain the concept of elasticity of supply and its importance in business

decisions.

6. Illustrate the determination of equilibrium price and quantity with the help of a
diagram.

7. Explain how a shift in supply affects the equilibrium price and quantity.

8. Define costs and explain the different types of costs with examples.

9. Distinguish between fixed cost and variable cost with the help of a diagram.

10. Explain the relationship between total cost, average cost, and marginal cost.

14-Mark Questions

1. Define supply. Explain the law of supply, its assumptions, exceptions, and
importance in business decision-making.

2. Discuss the determinants of supply in detail. How do these factors influence the
supply of a commodity?
 3. Explain the concept of equilibrium of demand and supply. How are equilibrium
price and quantity determined? Illustrate with a diagram.

4. Analyze the effect of a shift in supply on the equilibrium price and output,
assuming demand remains constant.

5. Describe the concept and types of elasticity of supply. Discuss its importance in
pricing and production decisions.

6. Discuss the various types of costs in detail — fixed, variable, direct, indirect,
sunk, and future costs — with examples.

7. Explain with diagrams the different cost curves: total cost, average cost, and
marginal cost curves.

8. Describe and illustrate the relationship between average cost and marginal cost.

9. Explain the short-run and long-run cost relationships with diagrams.

10. Evaluate the importance of cost analysis in managerial decision-making and

pricing strategies.

Chapter -5

2-Mark Questions

1. Define revenue.

2. What is total revenue (TR)?

3. What is average revenue (AR)?

4. What is marginal revenue (MR)?

5. State the relationship between AR and MR under perfect competition.

6. What is the relationship between MR and AR under monopoly?

7. Define a market.

8. Mention any two features of a perfect competition market.

9. What is monopoly?

10. Define monopolistic competition.

11. What is oligopoly?

12. Define equilibrium of a firm.

 13. State the TR–TC approach to equilibrium.

14. What is the MR–MC approach to equilibrium?

15. What does price determination mean?

6-Mark Questions

1. Explain the basic concepts of total revenue, average revenue, and marginal
revenue.

2. Illustrate the relationship between AR and MR under perfect competition with a

diagram.

3. Explain the relationship between AR and MR under imperfect competition.

4. Distinguish between perfect competition and monopoly.

5. Describe the determinants of price and output under perfect competition.

6. Explain the TR–TC approach for the equilibrium of a firm.

7. Describe the MR–MC approach for price and output determination.

8. Write short notes on monopoly equilibrium.

9. Explain the main features of monopolistic competition.

10. What are the characteristics of oligopoly? Give suitable examples.

14-Mark Questions

1. Explain the different concepts of revenue and show the relationship between
total, average, and marginal revenue with appropriate diagrams.

2. Discuss how AR and MR curves differ under perfect and imperfect competition
with graphical explanation.

3. Explain in detail the equilibrium of a firm under perfect competition using the TR–
TC and MR–MC approaches.

4. Describe the long-run equilibrium of an industry under perfect competition with

diagrams.

5. Explain how price and output are determined under monopoly. Illustrate with
diagrams.
6. Discuss the equilibrium of a monopolistic competition firm in the short run and
long run.

7. Compare the pricing and output decisions under monopoly and monopolistic
competition.

8. Explain the concept of oligopoly. Discuss the major features, types, and price
rigidity under oligopoly.

9. Describe the determination of equilibrium price and output under different

market conditions.

10. Analyze the importance of revenue and cost concepts in managerial decision-
making regarding pricing and production