CBSE (Arts) Class 12CBSE
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Question Paper Solutions for Economics All India Set 1 2012-2013 CBSE (Arts) Class 12


Marks: 100
[1]1

Define marginal revenue.

Chapter: [1.03] Producer Behaviour and Supply
Concept: Total, Average and Marginal Revenue
[1]2

What does a rightward shift of demand curve indicate?

 

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Demand Curve and Its Slope
[1]3

Under which market form is a firm a price taker? 

 

 
Chapter: [1.04] Forms of Market and Price Determination
Concept: Features of Perfect Competition
[1]4

When is the demand for a good said to be perfectly inelastic? 

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Change in Quantity Demand
[1]5

Give one reason for an “increase” in supply of a commodity. 

Chapter: [1.03] Producer Behaviour and Supply
Concept: Concept of Supply
[3]6

How is the demand for a good affected by a rise in the prices of other goods? Explain.

Chapter: [1.04] Forms of Market and Price Determination
Concept: Effects of Shifts in Demand and Supply
[3]7

A firm supplies 10 units of a good at a price of Rs 5 per unit. Price elasticity of supply is 1.25. What quantity will the firm supply at a price of Rs 7 per unit?

Chapter: [1.03] Producer Behaviour and Supply
Concept: Concept of Supply
[3]8

Explain the meaning of diminishing marginal rate of substitution with the help of an example.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Diminishing Marginal Utility
[3]9

From the following table, find out the level of output at which the producer will be in equilibrium. Give reasons for your answer.

Output

(units)

Marginal Revenue

Rs

Marginal Cost

Rs

1

8

10

2

8

8

3

8

7

4

8

8

5

8

9

Chapter: [1.03] Producer Behaviour and Supply
Concept: Concept of Producer's Equilibrium
[3]10 | attempt one of the following
[3]10.1

Why can a firm not earn abnormal profits under perfect competition in the long run? Explain.

Chapter: [1.04] Forms of Market and Price Determination
Concept: Features of Perfect Competition
[3]10.2

Why is the demand curve of a firm under monopolistic competition more elastic than under monopoly? Explain.

Chapter: [1.04] Forms of Market and Price Determination
Concept: Effects of Shifts in Demand and Supply
[4]11

Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price but only through the market forces. Also explain the series of changes that will occur in the market.

 

Chapter: [1.04] Forms of Market and Price Determination
Concept: Equilibrium Price
[4]12 | Attempt one of the following
[4]12.1

Explain the meaning of opportunity cost with the help of production possibility schedule.

Chapter: [1.01] Introduction
Concept: Concepts of Production Possibility Frontier
[4]12.2

Explain the central problem for whom to produce.

Chapter: [1.01] Introduction
Concept: Central Problems of an Economy
[4]13

A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.

 

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Factors Affecting Price Elasticity of Demand
[6]14 | Attempt one of the following
[6]14.1

Explain the three properties of the indifference curves.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Indifference Curve
[6]14.2

Explain the conditions of consumer’s equilibrium using indifference curve analysis.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Indifference Curve
[6]15

If equilibrium price of a good is greater than its market price, explain all the changes that will take place in the market. Use diagram.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Consumer'S Equilibrium
[6]16

Giving reasons, state whether the following statements are true or false: 

(i) Average product will increase only when marginal product increases.

(ii) With increase in level of output, average fixed cost goes on falling till it reaches zero.

(iii) Under diminishing returns to a factor, total product continues to increase till marginal product reaches zero

Chapter: [1.03] Producer Behaviour and Supply
Concept: Average Product
[1]17

Give two examples of intermediate goods.

Chapter: [2.01] National Income and Related Aggregates
Concept: Basic Concepts - Intermediate Goods
[1]18

State the components of supply of money.

Chapter: [1.03] Producer Behaviour and Supply
Concept: Concept of Supply
[1]19

What one step can be taken through market to reduce the consumption of a product harmful for health?

Chapter: [2.01] National Income and Related Aggregates
Concept: Basic Concepts - Consumption Goods
[1]20

How can Reserve Bank of India help in bringing down the foreign exchange rate which is very high?

Chapter: [2.02] Money and Banking
Concept: Function of Central bank - Bank of Issue
[1]21

Explain 'Revenue Deficit in a Government budget? What does it indicate?

Chapter: [2.04] Government Budget and the Economy
Concept: Measures of Government Deficit Or Surpluses
[3]22 | Attempt one of the following
[3]22.1

Explain the significance of 'medium of exchange' function of money

Chapter: [2.02] Money and Banking
Concept: Function of Money - Primary Function
[3]22.2

Explain the 'lender of last resort' function of central bank.

Chapter: [2.02] Money and Banking
Concept: Central Bank Function - Banker's Bank
[3]23

Distinguish between revenue receipts and capital receipts. Give an example of each. 

Chapter: [2.01] National Income and Related Aggregates
Concept: Meaning of Investment
[3]24

Explain how the government can use the budgetary policy in reducing inequalities in incomes.

Chapter: [2.04] Government Budget and the Economy
Concept: Objectives of Government Budget
[3]25

Explain the effect of depreciation of domestic currency on exports.

Chapter: [2.01] National Income and Related Aggregates
Concept: Meaning of Depreciation
[3]26

How is exchange rate determined in the foreign exchange market? Explain. 

Chapter: [2.05] Balance of Payments
Concept: Determination of Exchange Rate in a Free Market
[4]27

Calculate ‘Sales’ from the following data:

   

(Rs  in lakhs)

(i)

Subsidies

200

 

(ii)

Opening stock

100

 

(iii)

Closing stock

600

 

(iv)

Intermediate consumption

3,000

 

(v)

Consumption of fixed capital

700

 

(vi)

Profit

750

 

(vii)

Net value added at factor cost

2,000

Chapter: [2.01] National Income and Related Aggregates
Concept: Aggregates Related to National Income - Gross Value Added and Net Value Added
[4]28 | Attempt one of the following
[4]28.1

Distinguish between “real” gross domestic product and “nominal” gross domestic product. Which of these is a better index of welfare of the people and why? 

Chapter: [2.01] National Income and Related Aggregates
Concept: Real and Nominal GDP
[4]28.2

Distinguish between stocks and flows. Give two examples of each.

Chapter: [2.01] National Income and Related Aggregates
Concept: Basic Concepts - Stocks and Flows
[4]29

Explain the credit creation role of commercial banks with the help of a numerical example.

Chapter: [2.02] Money and Banking
Concept: Money Creation Or Credit Creation by the Commercial Banking System
[6]30

From the data given below about an economy, calculate (a) investment expenditure and (b) consumption expenditure.

(i)

Equilibrium level of income

5,000

(ii)

Autonomous consumption

500

(iii)

Marginal propensity to consume

0.4

Chapter: [2.01] National Income and Related Aggregates
Concept: Methods of Calculating National Income - Expenditure Method
[6]31

Explain the meaning of under-employment equilibrium. Explain two measures by which full-employment equilibrium can be reached.

Chapter: [2.03] Determination of Income and Employment
Concept: Unemployment
[6]32 | Attempt one of the following
[6]32.1

Calculate “Gross National Product at Market Price” from the following data:

S.No.

Particulars

(Rs  in crores)

(i)

Compensation of employees

2,000

 

(ii)

Interest

500

 

(iii)

Rent

700

 

(iv)

Profits

800

 

(v)

Employer’s contribution to social security schemes

200

 

(vi)

Dividends

300

 

(vii)

Consumption of fixed capital

100

 

(viii)

Net indirect taxes

250

 

(ix)

Net exports

70

 

(x)

Net factor income to abroad

150

 

(xi)

Mixed income of self-employed

1,500

Chapter: [2.01] National Income and Related Aggregates
Concept: Aggregates Related to National Income - Gross National Product (GNP)
[6]32.2

Calculate “Gross National Disposable Income” from the following data:

S.No.

Particulars

(Rs  in crores)

(i)

Net domestic product at factor cost

3,000

 

(ii)

Indirect taxes

300

 

(iii)

Net current transfers from rest of the world

250

 

(iv)

Current transfers from the government

100

 

(v)

Net factor income to abroad

150

 

(vi)

Consumption of fixed capital

200

 

(vii)

Subsidies

100

Chapter: [2.01] National Income and Related Aggregates
Concept: National Disposable Income (Gross and Net)
S