Economics Official Board 2024-2025 ISC (Commerce) Class 12 Question Paper Solution

In the diagram given above, CD is the budget line. What does the point G represent?

Combination of two goods on which a consumer spends her entire money income.

Combination of two goods on which a consumer spends less than her money income.

Combination of two goods on which a consumer spends greater than her money income.

Consumer spends her entire money income either on Good A or Good B.

Abhinav derives total utility of 11 utils after consuming 4 mangoes and 9 utils after consuming 6 mangoes.

What is his marginal utility on consuming the 6^th mango?

1 util

21 utils

10 utils

−1 util

Law of Variable Proportions is NOT applicable when ______.

all factor inputs increase in the same proportion.

the time period is short.

all the units of variable input are equally efficient.

technology remains constant.

Refer to the diagram given below and choose the correct statement.

E₁ is the equilibrium point as MR = MC.

E₁ and E₂ are equilibrium points as MR = MС.

E₂ is the equilibrium point because MC > MR beyond this point.

E₂ is the equilibrium point because MC < MR beyond this point.

Identify the correct statement with reference to the measures of money supply.

M₃ includes M₂.

M₃ includes Time Deposits with commercial banks.

M₁ includes Time Deposits with commercial banks.

M₂ includes National Saving Certificates.

Suppose the total receipts are ₹ 1045 Cr. and total payments are ₹ 1526 Cr. in the Balance of Payments account of India.

In the above context, which one of the following can improve the Balance of Payments of India?

Indian tourists buying souvenirs in the foreign countries.

Foreign Institutional Investor (FII) buying shares of Indian companies.

Indian students joining foreign universities for higher education.

Value of the US dollar falling against the Indian rupee.

Which one of the following scenarios correctly represents a Degressive tax system?

Ruhi paid income tax in three consecutive years at the rate of 10% on her income of ₹ 10,000, 15% on her income of ₹ 20,000 and 15% on her income of ₹ 30,000.

Goods and Service tax on gold ornaments is 3% and 18% on fine dining in restaurants.

Roshan was promoted to the position of Senior Manager and received a raise in his income. But he continued paying 10% of his income as tax.

Suhana paid TDS at a higher rate on her increased interest income in the current year as compared to the previous year.

Assertion: Rise in price of burger at Burger Bliss raises the demand for burgers at Burger Heaven.

Reason: There is a negative relationship between the demand for a good and the price of the complementary good.

Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.

Assertion is true and Reason is false.

Both Assertion and Reason are false.

Assertion: Commercial banks can deposit their surplus funds with RBI.

Reason: A high reverse repo rate enables the commercial banks to earn an income.

Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

Both Assertion and Reason are true but Reason is not the correct explanation of Assertion.

Assertion is true and Reason is false.

Both Assertion and Reason are false.

With the help of a diagram, illustrate the effect of an increase in the price of the product shown in Image A on the demand for the product shown in Image B.

The long run average cost curve is U shaped due to the Law of Variable Proportions. Defend or refute the statement with a reason.

Amit withdrew ₹ 50,000 from his savings to invest in his own business. He bought a Xerox machine for ₹ 30,000 for his office the same day. Identify the explicit cost and the implicit cost in the above situation.

If Indian companies raise the wages in accordance with the Minimum Wage Act, it will lead to cost push inflation. Give a reason to support this statement.

Sagarika wants to buy a car worth 10 lakhs. She has only 3 lakhs and plans to borrow the remaining amount from the bank.

Name and briefly explain the selective credit control measure that enables Sagarika to get maximum loan from the bank.

Why does the supply of foreign exchange increase with an increase in the foreign exchange rate?

What is meant by primary deficit?

Ibrahim works as a mechanic and earns ₹ 5000 per month. To increase his family income, his wife and parents also begin to work. Over a period of time when his income increases to ₹ 20,000, Ibrahim asks his family members not to work and enjoy leisure.

The phenomenon indicated in this situation does not conform to the Law of Supply. Give a reason to support this statement. Draw the supply curve based on the given situation.

When the price of potato chips falls from ₹ 40 to ₹ 20 per unit, its demand increases by 20 units. If the price elasticity of demand is (−) 0·5, calculate the quantity demanded of potato chips at ₹ 20.

Study the schedule given below and explain the relation between Average Revenue and Marginal Revenue by giving a suitable reason.

With the help of a diagram, illustrate the effect of a simultaneous and proportional decrease in demand and supply on equilibrium price and quantity.

Why is fixed cost a short run phenomenon?

Draw the Total Fixed Cost curve?

How do Total Product, Average Product and Marginal Product behave under the Law of Increasing Returns to a Factor? Briefly explain one reason for the operation of this law.

Laxman & Sons is a leading producer of perfume among many other firms. Recently, it introduced a new fragrance and offered gift vouchers to the customers who bought this product.

Identify the form of market and explain the feature implied in this situation.

Briefly discuss the situations when a perfectly competitive firm continues to produce even after facing losses in the short run.

The main occupation of the villagers in a village is beekeeping. The villagers sell their produce only to firm X.

1. Identify the type of market prevalent here.
2. Is it a buyer’s market or a seller’s market? Give a reason.

Monopolistic competition is the perfect blending of monopoly and perfect competition. Explain.

Aditi deposits 1000 in a bank which leads to an increase in money supply in the economy to the extent of 4000. Name and explain the process of this increase in money supply.

The Indian rupee fell 14 paisa to 83-91 aa against the US dollar on Wednesday amid outflow of foreign capital and volatile domestic equity markets. 

The above situation would lead to a surplus in Balance of Payments account of India. Defend or refute the statement by giving a reason.

The government initiated the ‘Make in India’ programme to attract global investment in the Indian economy. Explain the impact of this programme on the Balance of Payments account of India.

In July 2024, India’s retail inflation rate was 3.54%. Though it is falling yet it continues to persist.

Explain how this would affect India’s Balance of Payments.

Tata Motors’ purchase of iconic British luxury car maker Jaguar Land Rover ($ 2.3 billion) has proved to be a master stroke.

State whether the above transaction will be recorded under the Debit side or the Credit side of Balance of Payments. Give a reason.

With reference to government budget, classify the following as Revenue receipt or Capital receipt. Give a valid reason for each.

1. Financial help from a Multinational Corporation (MNC) for victims in a flood affected area.
2. Sale of shares of a Public Sector Undertaking (PSU) to a private company.

Budget 2024 outlined the sources of government revenue which comprised 19% from Income Tax, 18% from Goods and Service Tax and the remaining from borrowings.

Categorise the two types of taxes mentioned above. State any one difference between them.

Under the Gruha Lakshmi Scheme in Karnataka, the state government provides ₹ 2000 monthly assistance to head female member in each family. Will this receipt be a part of National Income accounting? Explain.

State whether the following is True or False. Give a reason.

In a closed economy, GDP is always equal to GNP.

State whether the following is True or False. Give a reason.

Money received by an Indian cricketer as Man of the Match does not contribute to the National Income of India.

The price of chocolates increased during the Valentine week in February leading to an increase in the supply at a greater rate.

Identify the price elasticity of supply and illustrate it on a diagram.

Robert consumes commodities X and Y. The price of commodity X is ₹ 2 and the price of commodity Y is ₹ 1. He has decided to spend ₹ 11 on these two commodities.

1. Using the following schedule, identify the combination of the two commodities X and Y that gives maximum satisfaction to Robert.     [4]
   

   Units	1	2	3	4	5	6
   MUX	16	14	12	10	8	6
   MUY	10	9	8	7	6	5

2. State the underlying law related to the schedule given above. Mention the equilibrium condition.     [2]

What is meant by investment multiplier?

How is the investment multiplier related to marginal propensity to consume?

Refer to the diagram given below and answer the questions that follow.

1. What does the gap EG represent? Explain.     [2]
2. Recommend any two fiscal measures and any two monetary measures to combat the situation referred to in subpart (a).     [4]

Discuss the problem of double counting with the help of an example. How can it be solved?

Calculate NDP_FC and NNP_FC on the basis of the following information.

Discuss two reasons for NOT considering GDP a true indicator of economic welfare.

Calculate GDP_MP and National Income from the following information.

Read the passage given below and answer the questions that follow.

1. Identify the form of market referred to in the above passage. Name any two industries which come under the same market form.
2. Explain any two important features of the market form referred to in the passage.
3. Briefly discuss the nature of demand curve in this form of market.
4. Distinguish between perfect competition and imperfect competition on the following basis:
   1. Nature of product
   2. Nature of demand curve