OMTEX CLASSES

Fill in the blanks with appropriate alternatives given in the brackets: Chapter 5 - Producer's Behaviour Economics Solutions for Class 12 Commerce Economics

*Chapter 5 - Producer’s Behaviour Economics Solutions for Class 12 Commerce Economics*

Fill in the blanks with appropriate alternatives given in the brackets:

i. _ determines the potential supply. (Stock/ Output/ Supply/ Flow)

ii. When the price rises, there is of supply. (extension/ contraction/ decrease/ increase)

iii. The vertical supply curve represents _ elasticity. (zero/ unit/ constant/ less)

iv. An increase in supply means selling a amount at the same price. (larger/ smaller/ constant/ less)

v. Total Revenue ÷ Number of units Sold = . (Average Cost/ Average Revenue/ Marginal Cost/ Total Cost)

ANSWER:

i) Stock determines the potential supply.

Explanation:

Stock is the amount of goods that are available with the seller, for sale, at a given point of time. Thus, we can say that stock determines the potential supply.

ii) When the price rises, there is extension of supply.

Explanation:

When supply rises as a result of rise in price, it is known as extension in supply. Graphically, it is represented by an upward movement along the supply curve.

iii) The vertical supply curve represents zero elasticity.

Explanation:

The vertical supply curve represents zero elasticity. That is, the quantity supplied is totally unresponsive to the change in the price of a good.

iv) An increase in supply means selling a larger amount at the same price.

Explanation:

Increase in supply implies that a larger quantity is supplied at the same price. An increase in supply is caused by factors such as decrease in the factor prices, advancement in technology, favourable government policies, etc. The increase in supply is graphically shown in the following figure by parallel rightward shift of the supply curve.

v) Total Revenue ÷ Number of units Sold = Average Revenue.

Explanation:

Average revenue is the revenue earned per unit of output sold. It is equal to total revenue divided by total number of units sold. Algebraically,

Total Revenue

Number of Units Sold

=Average Revenue

23. Journalise the following transactions in the books of Ashwin. (a) Bank informed that Sachin's acceptance for Rs. 5,750 sent to bank for collection had been honoured and bank charges debited were Rs. 50.

23. Journalise the following transactions in the books of Ashwin.

(a) Bank informed that Sachin's acceptance for Rs. 5,750 sent to bank for collection had been honoured and bank charges debited were Rs. 50.

(b) Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and accepting a new bill for the balance plus interest @ 8% p.a. for 3 months.

(c) Discharged our acceptance to Pravin for Rs. 4,250 by endorsing Bhavin's acceptance to us for Rs. 4,000.

(d) Jatin who had accepted Ashwin's bill of Rs. 8,500 was declared insolvent and only 40% of the amount due could be recovered from his estate.

Sr. No.	Particulars	JF	DEBIT	CREDIT
(a)	Bank A/c … Dr.		5700
	Bank Charges A/c … Dr.		50
	To Bills Sent for Collection A./c			5750
	[being the bill is sent to bank for collection bill is honoured and bank charged debited]
(b)	Nitin’s A/c …. Dr.		7200
	To Bills Receivable A/c			7200
	[Being the bill is dishonoured]

	Nitin’s A/c …. Dr.		100
	To Interest A/c			100
	[Being the interest is charged on balance amount]

	Cash A/c … Dr.		2200
	To Nitin’s A/c			2200
	[Being the Part payment is made in Cash]

	Bills Receivable A/c … Dr.		5100
	To Nitin’s A/c			5100
	[Being the new bill is drawn along with interest]

(c)	Bills Payable A/c … Dr.		4250
	To Bills Receivable A/c			4000
	To Discount A/c			250
	[Bills receivable endorsed in payment of acceptance at a discount]

(D)	Jatin’s A/c …. Dr.		8500
	To Bills Receivable A/c			8500
	[Being the bill is dishonoured]

	Cash A/c … Dr.		3400
	Bad debts A/c …. Dr.		5100
	To Jatin’s A/c			8500
	[Being the drawee become insolvent and only 40% of the amount could be recovered from his private property]