​Q. 1.B. Choose the correct option.

5 Mark
1) A B
1) Time utility, a) Transport
2) Place utility, b) Blood Bank
3) Service utility, c) Mobile phone
4) Knowledge utility, d) Doctor
Answer:-1-b, 2-a, 3-d, 4-c

Q. 2A. Distinguish between. 4 Mark.

1) Desire & Demand.
Answer:-DESIRE- a)Desire means an urge to have
something.
b)Desire is a part of demand.
c)Desire is not per unit of time.
d)There is no relation between desire and price.
e)Reference of time and price is not necessary to
express desire.
f)E.g.: The desire of a poor person to go on a
vacation to Switzerland.
DEMAND:-a)Demand means a desire which is backed
by willingness and ability to pay.
b)Demand includes desire.
c)Demand is always per unit of time.
d)There is an inverse relationship between
demand and price.
e)Reference of time and price is necessary
to express demand.
f)E.g.: The demand of a popular movie
actor to buy an "Audi" car.
2) Stock & Supply.
Answer:-STOCK -1 ) Stock is thet otal quantity of goods
available for sale with a seller at a particular point of
time.
2)Stock is the outcome of production.
3) Stock can be increased if production is
increased. 4) Stock is generally more than supply.
5)Stock is a static concept and is not
expressed in relation to price and time
SUPPLY -1)Supply refers to the quantity of goods that
a seller is able and willing to offer for sale at a
particular price during a certain period of time.
2)Supply is derived out of stock.
3)Supply can be increased if stock is
increased. 4)Supply can be less than or equal
to stock. However, it cannot exceed stock.
5)Supply is a flow concept and is
always expressed in relation to price and time.

Q.2 B. Write the definition. 4 Mark.

1) micro economics
Answer;- Microeconomics is the study of individuals,
households and firms' behavior in decision making
and allocation of resources. It generally applies to
markets of goods and services and deals with
individual and economic issues.
2)A) Definition of demand
Answer:- Demand may be defined as the quantity of a
commodity that a consumer is able and willing to
buy, at each possible price, over a given period of
time. ● Essential elements of demand are quantity,
ability, willingness, prices, and period of time
Q. 3. Answer the following.
1) explain the types of utility.
Answer:-1. Form utility- Increase in utility due to
change in shape of good is termed as form utility.
2. Place utility- Increase in utility due to change in the
place where it is consumed is called place utility.
3. Time utility- Increase in utility due to change in the
time of usage is called time utility.
4. Service utility- When services are rendered to the
consumers by service providers or professionals, it is
called service utility.
5. Knowledge utility- Increase in utility due to an
increased knowledge about a good is known as
knowledge utility.

2) explain the meaning of supply.

Answer:-Supply is a fundamental economic concept
that describes the total amount of a specific good or
service that is available to consumers. Supply can
relate to the amount available at a specific price or
the amount available across a range of prices if
displayed on a graph. This relates closely to the
demand for a good or service at a specific price; all
else being equal, the supply provided by producers
will rise if the price rises because all firms look to
maximize profits.
Q. 4. Answer the detail. 12Marks.
1) state and explain the law of demand with
exception.
Answer:-Meaning: -The Law of demand establishes
the functional relationship between the Price of a
commodity and the quantity of that commodity
demanded at different prices, assuming other factors
remaining constant.
When the price of a commodity rises, demand for it
falls and when the price of the commodity falls,
demand rises. So less quantity is demanded at higher
prices and more quantity is demanded at lower
prices. There exist inverse relationship between price
and quantity demanded of a commodity.
Definition: -According to Marshall the
law of demand, is defined as "Other things being
equal, the quantity of a commodity demanded varies
inversely with its price."
Symbolically, the Law of demand can be expressed as
follows:
Dx = f (Px)
Where, D = stands for the demand for commodity X
X stands for the commodity
demanded
F stands for function of
Px stands for the price of the
commodity X
We can explain this law with the help of a schedule
and a diagram.
The Schedule shows that with an increase in Price the
quantity demanded is decreasing. It indicates inverse
relationship between the two variables price and
quantity demanded. When the price is Re. 1 the
consumer demand 50 units and when the price rises
to Rs. 5 he demands the least that is 10 units.
In the above diagram X-axis represents quantity
demanded and Y- axis represents price. Various
points from the schedule are plotted on the graph,
joint those points we will be getting demand curve.
DD is the demand curve which slopes downward
from left to right indicating inverse relationship
between price and Quantity demanded. This happens
when the price is more, demand is less and when
price is less, and demand is more
1. Giffen goods or inferior goods- Giffen Paradox: -
Inferior goods are those goods whose demand does
not rise even if their price falls. At times, the demand
decrease, when the price of such gods falls. Sir Robert
Giffen discovered this behaviour in England in
relation to inferior goods such as bread. Therefore
inferior goods are named after Giffen and they called
'Giffen Goods'.
2. Prestige Goods: There are certain goods and
services, which represent 'Status' of 'Prestige'for the
people. Demanduse for these commodities is more
when the price is more.
3. Anticipation of changes in price:-If people
anticipate a further rise in price, they may buy more
at the existing higher price. Likewise, if people
anticipating a further fall in price, they will not buy
more even at the existing lower prices. They will wait
for the price to fall further.
4. Price Illusion: -There is a belief among the people
that the higher is the price, the better is the product
and accordingly the greater is the demand for such
goods.
5. Changes in fashion: The law of demand may not
work, if there is change in fashion. For example, if a
product goes out of fashion and its price falls down,
people will not buy more of it even at very low prices.
6. Promotional activates: - Promotional activities such
as advertising and salesmanship undertaken by seller
can make the people buy more even at high prices.
7. Changes in quality: if there is a change in the
quality of the product, the law of demand may not
apply. For instance, if there is improvement in quality
of the product, some people my demand more even at
higher price.

2)explain the meaning of perfect competition with its

features.
Answer:-1. Large number of buyers and sellers:-
There exist large number of buyers and sellers in a
perfectly competitive market. The number of buyers
and sellers are so large that a single buyer or a single
seller can't influence (manipulate) the price or output
through his action.
2. Homogeneous Product:-
The products sold in market are homogeneous, that is
identical in its taste, shape, size, colour, design,
quality etc.
3. Freedom of entry and exit:-
There is freedom of entry and exit to Use the firms
under perfectly competitive app market. Any firm
(buyer or seller). can enter the market or exit from
the market as and when he wants.
4. Perfect Knowledge:-
Buyers and sellers must have a perfect knowledge
about the market conditions. They should have
complete information about the price at which goods
are bought and sold and the place where the
transactions take place etc.
5. Perfect mobility of factors of production:-
The Factors of production are perfectly mobile in the
sense that they are completely free to move from one
industry to another or from one market to another or
from one occupation to another.
6. Absence of transportation cost:-
It is assumed that all the sellers are equally near or
far away from the markets, and as such there are
uniform transport coasts to all the sellers. So, it is
assumed that the transport cost is absent or constant
for all the sellers.
7. Absence of Government Intervention:-
There is no government intervention in respect of
production, transportation and exchange of goods.
8. Uniform price:-
There exist a single uniform price in the market and
it is determined by the forces of demand and supply.

9. Demand curve of the Firm:-

Since the firm is a price taker it can sell any amount
of the commodity at the prevailing price. Thus the
demand curve facing the horizontal line.