Economics : 2014 : CBSE : [Delhi] : Set – II

If unemployment is reduced, it would increase production of output and income leading to rightward shift in production possibility frontier. It indicates better utilization of resources as the economy can produce more goods and services with the increased labour.

Returns to a factor means the change in the physical output of a good when the quantity of one variable factor of production is increased keeping all the other factors constant. It is a short term phenomenon.

Perfect oligopoly refers to the oligopoly market situation in which the firms produce homogeneous products.

Demand deposits refer to those deposits of commercial banks which can be withdrawn from the bank on demand or by writing the check anytime.

Marginal propensity to consume is defined as the ratio of change in consumption to the change in the income.

A government budget is an annual statement showing the estimated receipts and expenditure of the government during a financial year.

A budget line represents all bundles of goods that a consumer can buy with his given income and prices of the good. For example there are two goods say good 1 and good 2 and price of good 1 is P₁ and price of good 2 is P₂ and consumer wants to buy X₁ unit of good 1 and X₂ unit of good 2 and consumer income is M, then the equation of budget line is written as P₁.X₁+P₂.X₂=M

In economics the sum of explicit and implicit cost is considered as cost. It is the total cost of production.

Or

Cost is the expenditure incurred by a firm on factor as well as non-factor inputs for the production of a good or service.

The current account deficit indicates that payments made to abroad for imports of goods and services and unilateral transfers are more than receipts from exports of goods and services and unilateral transfers.

Full employment is the level of employment where aggregate demand is equal to aggregate supply at the prevailing price level.