# Economics Delhi Set 1 2012-2013 Commerce (English Medium) Class 12 Question Paper Solution

Economics [Delhi Set 1]
Date: March 2013

[1] 1

Give two examples of fixed costs.

Concept: Cost - Fixed Cost
Chapter: [0.03] Producer Behaviour and Supply
[1] 2

Define marginal cost.

Concept: Cost - Marginal Cost
Chapter: [0.03] Producer Behaviour and Supply
[1] 3

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

Concept: Change in Demand
Chapter: [0.02] Consumer Equilibrium and Demand
[1] 4

Given the meaning of market demand.

Concept: Market Demand
Chapter: [0.02] Consumer Equilibrium and Demand
[1] 5

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

Concept: Total, Average and Marginal Revenue
Chapter: [0.03] Producer Behaviour and Supply
[3] 6

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

Concept: Change in Quantity Demand
Chapter: [0.02] Consumer Equilibrium and Demand
[3] 7 | Attempt any ONE
[3] 7.1

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

Concept: Diminishing Marginal Utility
Chapter: [0.02] Consumer Equilibrium and Demand
[3] 7.2

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

Concept: Conditions of Consumer's Equilibrium Using Marginal Utility Analysis
Chapter: [0.02] Consumer Equilibrium and Demand
[3] 8

When the price of a good rises from Rs 20 per unit to Rs 30 per unit, the revenue of the firm producing this good rises from Rs 100 to Rs 300. Calculate the price elasticity of supply.

Concept: Concept of Supply - Supply Schedule and Supply Curve
Chapter: [0.03] Producer Behaviour and Supply
[3] 9

Complete the following table:

 Units of Labour Average Product (Units) Marginal Product (Units) 1 8 ............. 2 10 ............ 3 ............ 10 4 9 ........... 5 ............. 4 6 7 ............
Concept: Relation Between Total, Average and Marginal Product
Chapter: [0.03] Producer Behaviour and Supply
[3] 10

Explain ‘large number of buyers and sellers' features of a perfectly competitive market.

Concept: Features of Perfect Competition
Chapter: [0.04] 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: [0.01] Introduction
[4] 12

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

Concept: Concept of Producer's Equilibrium
Chapter: [0.03] Producer Behaviour and Supply
[4] 13 | Attempt any ONE
[4] 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: [0.02] Consumer Equilibrium and Demand
[4] 13.2

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

Concept: Factors Affecting Price Elasticity of Demand
Chapter: [0.02] Consumer Equilibrium and Demand
[6] 14 | Giving reasons, state whether the following statements are true or false.
[3] 14.1

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

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

Concept: Forms of Market
Chapter: [0.04] Forms of Market and Price Determination
[3] 14.2

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: [0.04] Forms of Market and Price Determination
[6] 15

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

Concept: Law of Variable Proportions
Chapter: [0.03] Producer Behaviour and Supply
[6] 16 | Attempt any ONE
[6] 16.1

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

Concept: Indifference Curve
Chapter: [0.02] Consumer Equilibrium and Demand
[6] 16.2 | Explain the relationship between
[3] 16.2.1

Prices of other goods and demand for the given good.

Concept: Demand Curve and Its Slope
Chapter: [0.02] Consumer Equilibrium and Demand
[3] 16.2.2

Income of the buyers and demand for a good.

Concept: Change in Demand
Chapter: [0.02] Consumer Equilibrium and Demand
[1] 17

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

Concept: Concept of Foreign Exchange Rate
Chapter: [0.06] Open Economy Macroeconomics
[1] 18

What are demand deposits?

Concept: Currency Held by the Public and Net Demand Deposits Held by Commercial Banks
Chapter: [0.03] Money and Banking
[1] 19

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

Concept: GDP and Welfare
Chapter: [0.02] National Income and Related Aggregates
[1] 20

Give two examples of indirect taxes.

Concept: Direct and Indirect Tax
Chapter: [0.05] Government Budget and the Economy
[1] 21

What is government budget?

Concept: Meaning of Government Budget
Chapter: [0.05] Government Budget and the Economy
[3] 22
[3] 23 | Attempt any ONE
[3] 23.1

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

Concept: Classification of Expenditure
Chapter: [0.05] Government Budget and the Economy
[3] 23.2

Distinguish between revenue deficit and fiscal deficit.

Concept: Measures of Government Deficit Or Surpluses
Chapter: [0.05] Government Budget and the Economy
[3] 24

Explain any one objective of Government Budget.

Concept: Objectives of Government Budget
Chapter: [0.05] Government Budget and the Economy
[3] 25

Explain the effect of appreciation of domestic currency on imports.

Concept: Concept of Foreign Exchange Rate
Chapter: [0.06] Open Economy Macroeconomics
[3] 26

Distinguish between balance of trade and balance on current account?

Chapter: [0.06] Open Economy Macroeconomics
[4] 27

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: [0.02] National Income and Related Aggregates
[4] 28 | Attempt any ONE
[4] 28.1

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: [0.02] National Income and Related Aggregates
[4] 28.2

Explain the circular flow of income.

Concept: Circular Flow of Income (Two Sector Model)
Chapter: [0.02] National Income and Related Aggregates
[4] 29

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

Concept: Central Bank Function - Goverment Bank
Chapter: [0.03] Money and Banking
[6] 30

C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate

(i) Equilibrium level of National Income.

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

Concept: Concept of National Income
Chapter: [0.02] National Income and Related Aggregates
[6] 31

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: [0.04] Determination of Income and Employment
[6] 32
[6] 32.1

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: [0.02] National Income and Related Aggregates
[6] 32.2

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: [0.02] National Income and Related Aggregates

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