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# Economics Delhi Set 2 2012-2013 CBSE (Arts) Class 12 Question Paper Solution

Economics [Delhi Set 2]
Date: March 2013

[1]1

Give two examples of variable costs.

Concept: Cost -variable Cost
Chapter: [0.023] Producer Behaviour and Supply
[1]2

Given the meaning of market demand.

Concept: Market Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[1]3

Under which market form a firm's marginal revenue is always equal to price?

Concept: Total, Average and Marginal Revenue
Chapter: [0.023] Producer Behaviour and Supply
[1]4

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

Concept: Change in Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[1]5

Define marginal cost.

Concept: Cost - Marginal Cost
Chapter: [0.023] Producer Behaviour and Supply
[3]6 | Attempt one of the following
[3]6.1

Explain the law of diminishing marginal utility with the help of a total utility schedule.

Concept: Diminishing Marginal Utility
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[3]6.2

Explain the condition of consumer's equilibrium with the help of utility analysis.

Concept: Conditions of Consumer's Equilibrium Using Marginal Utility Analysis
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[3]7

Explain the difference between an inferior good and a normal good.

Concept: Change in Quantity Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[3]8

A firm’s revenue rises from Rs 400 to Rs 500 when the price of its product rises from Rs 20 per unit to Rs 25 per unit. Calculate the price elasticity of supply.

Concept: Measurement of Price Elasticity of Supply - Geometric Method
Chapter: [0.023] Producer Behaviour and Supply
[3]9

Complete the following table:

 Output (Units) Average Cost (Rs) Marginal Cost (Rs) 1 12 ……. 2 10 …….. 3 ……. 10 4 10.5 …….. 5 11 …….. 6 …….. 17
Concept: Total Product
Chapter: [0.023] Producer Behaviour and Supply
[3]10

Explain any two features of monopoly market.

Concept: Meaning and Features of Market
Chapter: [0.024] Forms of Market and Price Determination
[4]11

Production in an economy is below its potential due to unemployment. Government starts employment generation schemes. Explain its effect using production possibilities curve.

Concept: Concepts of Production Possibility Frontier
Chapter: [0.021] Introduction
[4]12 | Attempt one of the following
[4]12.1

The demand for good rises by 20 percent as a result of all in its price. Its price elasticity of demand is (−) 0.8. Calculate the percentage fall in price.

Concept: Type of Elasticity of Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[4]12.2

How is price elasticity of demand affected by:

(i) Number of substitutes of available for the good.

(ii) Nature of the good.

Concept: Type of Elasticity of Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[4]13

Explain the conditions of producer’s equilibrium with the help of a numerical example.

Concept: Concept of Producer's Equilibrium
Chapter: [0.023] Producer Behaviour and Supply
[6]14 | Attempt one of the following
[6]14.1

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

Concept: Indifference Curve
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[6]14.2

Explain the relationship between

(i) Prices of other goods and demand for the given good.

(ii) Income of the buyers and demand for a good.

Concept: Type of Elasticity of Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
[6]15

Giving reason, state whether the following statement is true or false.
When equilibrium price of a good is less than its market price, there will be competition among the sellers.

Concept: Equilibrium Price
Chapter: [0.024] Forms of Market and Price Determination

Giving reason, state whether the following statement is true or false.

A Monopolist can sell any quantity he likes at a price.

Concept: Main Market Forms
Chapter: [0.024] Forms of Market and Price Determination
[6]16

State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour

Concept: Law of Variable Proportions
Chapter: [0.023] Producer Behaviour and Supply
[1]17

What is government budget?

Concept: Meaning of Government Budget
Chapter: [0.016] Government Budget and the Economy
[1]18

Give two examples of indirect taxes.

Concept: Direct and Indirect Tax
Chapter: [0.016] Government Budget and the Economy
[1]19

Define externalities. Give an example of negative externality. What is its impact on welfare?

Concept: GDP and Welfare
Chapter: [0.012] National Income and Related Aggregates
[1]20

How can increase in foreign direct investment affect the price of foreign exchange?

Concept: Concept of Foreign Exchange Rate
Chapter: [0.015] Balance of Payments
[1]21

What are demand deposits?

Concept: Currency Held by the Public and Net Demand Deposits Held by Commercial Banks
Chapter: [0.013999999999999999] Money and Banking
[3]22

Distinguish between balance of trade and balance on current account?

Chapter: [0.015] Balance of Payments
[3]23

Explain the effect of appreciation of domestic currency on imports.

Concept: Concept of Foreign Exchange Rate
Chapter: [0.015] Balance of Payments
[3]24

Explain the problem of double coincidence of wants faced under barter system. How has money solved it?

Concept: Difficulties Involved in the Barter Exchange
Chapter: [0.013999999999999999] Money and Banking
[3]25

Explain any one objective of Government Budget.

Concept: Objectives of Government Budget
Chapter: [0.016] Government Budget and the Economy
[3]26 | Attempt one of the following
[3]26.1

Distinguish between revenue expenditure and capital expenditure in Government budget. Give an example of each.

Concept: Classification of Expenditure
Chapter: [0.016] Government Budget and the Economy
[3]26.2

Distinguish between revenue deficit and fiscal deficit.

Concept: Measures of Government Deficit Or Surpluses
Chapter: [0.016] Government Budget and the Economy
[4]27 | Attempt one of the following
[4]27.1

Giving reasons categories the following into stock and flow:-

(i) Capital

(ii) Saving

(iii) Gross domestic product

(iv) Wealth

Concept: Basic Concepts - Stocks and Flows
Chapter: [0.012] National Income and Related Aggregates
[4]27.2

Explain the circular flow of income.

Concept: Circular Flow of Income (Two Sector Model)
Chapter: [0.012] National Income and Related Aggregates
[4]28

How do commercial banks create deposits? Explain.

Concept: Commercial Banks
Chapter: [0.013999999999999999] Money and Banking
[4]29

Calculate 'sales' from the following data:-

 S. No. Particulars (Rs in laths) (i) Net value added at factor cost 560 (ii) Depreciation 60 (iii) Change in stock (-)30 (iv) Intermediate cost 1000 (v) Exports 200 (vi) Indirect taxes 60
Concept: Gross and Net Domestic Product (GDP and NDP)
Chapter: [0.012] National Income and Related Aggregates
[6]30

In an economy, S = −100 + 0.6 Y is the saving function, where S is Saving and Y is National Income. If investment expenditure is 1,100, calculate:

(1) Equilibrium level of National Income

(2) Consumption expenditure at equilibrium level of National Income.

Concept: Concept of National Income
Chapter: [0.012] National Income and Related Aggregates
[6]31 | Attempt one of the following
[6]31.1

Calculate National Income from the following data:

 S.No. Particulars Rs.in crores (i) Private final consumption expenditure 900 (ii) Profit 100 (iii) Government final consumption expenditure 400 (iv) Net indirect taxes 100 (v) Gross domestic capital formation 250 (vi) Change in stock 50 (vii) Net factor income from abroad (-)40 (viii) Consumption of fixed capital 20 (ix) Net imports 30
Concept: Concept of National Income
Chapter: [0.012] National Income and Related Aggregates
[6]31.2

Calculate net national disposable income from the following data:-

 S.No. Particulars Rs. in crores (i) Gross domestic product at market price 2000 (ii) Net current transfers to rest of the world (-)200 (iii) Net indirect taxes 150 (iv) Net factor income to abroad 60 (v) National debt interest 70 (vi) Consumption of fixed capital 200 (vii) Current transfers from Government 150
Concept: National Disposable Income (Gross and Net)
Chapter: [0.012] National Income and Related Aggregates
[6]32

Complete the following table:-

 Income (Rs) Consumption expenditure (Rs) Marginal propensity to save Average propensity to save 0 80 100 140 0.4 ....... 200 ........ ...... 0 ....... 240 ........ 0.20 ......... 260 0.8 0.35
Concept: Consumption Function and Propensity to Save
Chapter: [0.011000000000000001] Determination of Income and Employment

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