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# Economics Delhi Set 3 2012-2013 CBSE (Arts) Class 12 Question Paper Solution

SubjectEconomics
Year2012 - 2013 (March)
Economics [Delhi Set 3]
Marks: 100Date: 2012-2013 March

1

Give two examples of fixed costs.

Concept: Cost - Fixed Cost
Chapter: [0.023] Producer Behaviour and Supply

Give two examples of variable costs.

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

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
3

Given the meaning of market demand.

Concept: Market Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
4

Define marginal cost.

Concept: Cost - Marginal Cost
Chapter: [0.023] Producer Behaviour and Supply
5

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

Concept: Change in Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
6 | Attempt one of the following
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
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
7

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

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

The price elasticity of supply of a good is 0.8. Its price rises by 50 percent. Calculate the percentage increase in its supply.

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

Complete the following table:

 Units of Labour Average Product (Units) Marginal Product (Units) 1 16 ……. 2 20 …….. 3 ……. 20 4 18 …….. 5 …… 8 6 14 ……..
Concept: Relation Between Total, Average and Marginal Product
Chapter: [0.023] Producer Behaviour and Supply
10

Explain the 'free entry and exit of firms' feature of monopolistic competition.

Concept: Main Market Forms
Chapter: [0.024] Forms of Market and Price Determination
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
12

Give the meaning of producer’s equilibrium. A producer that quantity of his product at which marginal cost and marginal revenue are equal. Is he earning maximum profits? Give reason for your answer.

Concept: Marginal Product
Chapter: [0.023] Producer Behaviour and Supply
13 | Attempt one of the following
13.1

The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.

Concept: Elasticity of Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
13.2

Explain any two factors that affect the price elasticity of demand. Give suitable examples.

Concept: Factors Affecting Price Elasticity of Demand
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
14

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
15 | Attempt one of the following
15.1

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

Concept: Indifference Curve
Chapter: [0.022000000000000002] Consumer Equilibrium and Demand
15.2

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
16

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

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
17

Give two examples of indirect taxes.

Concept: Direct and Indirect Tax
Chapter: [0.016] Government Budget and the Economy
18

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
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
20

What is government budget?

Concept: Meaning of Government Budget
Chapter: [0.016] Government Budget and the Economy
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
22 | Attempt one of the following
22.1

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
22.2

Distinguish between revenue deficit and fiscal deficit.

Concept: Measures of Government Deficit Or Surpluses
Chapter: [0.016] Government Budget and the Economy
23

Explain the effect of appreciation of domestic currency on imports.

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

Distinguish between balance of trade and balance on current account?

Chapter: [0.015] Balance of Payments
25

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
26

Explain any one objective of Government Budget.

Concept: Objectives of Government Budget
Chapter: [0.016] Government Budget and the Economy
27

Calculate “sales” from the following data:

 (Rs in lakhs) (i) Intermediate costs 700 (ii) Consumption of fixed capital 80 (iii) Change in stock (−) 50 (iv) Subsidy 60 (v) Net value added at factor cost 1300 (vi) Exports 50
Concept: Aggregates Related to National Income - Gross Value Added and Net Value Added
Chapter: [0.012] National Income and Related Aggregates
28

Explain "Banker to the Government" function of the Central Bank.

Concept: Central bank Function - Goverment Bank
Chapter: [0.013999999999999999] Money and Banking
29 | Attempt one of the following
29.1

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
29.2

Explain the circular flow of income.

Concept: Circular Flow of Income (Two Sector Model)
Chapter: [0.012] National Income and Related Aggregates
30 | Attempt one of the following
30.1

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
30.2

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
31

C = 50 + 0.5 Y is the Consumption Function where C is consumption expenditure and Y is National Income and Investment expenditure is 2000 is an economy. Calculate

(i) Equilibrium level of National Income.

(ii) Consumption expenditure at equilibrium level of national income.

Concept: Concept of National Income
Chapter: [0.012] National Income and Related Aggregates
32

Complete the following table:

 Consumption expenditure (Rs) Savings (Rs) Income (Rs) Marginal propensity to Consume 100 50 150 175 75 ……. …… 250 100 ……. …… 325 125 ……. ……
Concept: Consumption Function and Propensity to Save
Chapter: [0.011000000000000001] Determination of Income and Employment

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