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Question Paper Solutions - Economics 2011 - 2012-CBSE 12th-Class 12 CBSE (Central Board of Secondary Education)


Marks: 100
[1]1

Give meaning of an economy.

Chapter: [1.01] Introduction
Concept: What is an Economy?
[1]2

Given the meaning of market demand.

Chapter: [1.01] Demand
Concept: Market Demand
[1]3

What is the behaviour of average fixed cost as output is increased? Why is it so?

Chapter: [1.03] Producer Behaviour and Supply
Concept: Cost - Average Fixed Cost
[1]4

What is the behaviour of average revenue in a market in which a firm can sell more only by lowering the price?

Chapter: [1.06] Cost and Revenue
Concept: Total, Average and Marginal Revenue
[1]5

What is a price taker firm?

Chapter: [1.07] Main Market Forms
Concept: Features of Perfect Competition
[3]6

What is opportunity cost? Explain with the help of a numerical example.

Chapter: [1.01] Introduction
Concept: Concept of Opportunity Cost
[3]7

Given the price of a good, how does a consumer decide as to how much of the good to buy?

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Consumer'S Equilibrium
[3]8

Draw Average Variable Cost, Average Total Cost ad Marginal Cost curves in a single diagram.

Chapter: [1.06] Cost and Revenue
Concept: Relationship Between Average Variable Cost and Average Total Cost and Marginal Cost
[3]9

An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and explicit cost from this information. Explain

Chapter: [1.03] Producer Behaviour and Supply
Concept: Basic Concepts of Cost
[3]10 | Attempt Any One
[3]10.1

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

Chapter: [1.07] Main Market Forms
Concept: Features of Perfect Competition
[3]10.2

Why are the firms said to be interdependent in an oligopoly market? Explain.

Chapter: [1.04] Forms of Market and Price Determination
Concept: Main Market Forms
[4]11

Define an indifference curve.

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

Explain why an indifference curve is downward sloping from left to right.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Indifference Curve
[4]12

When price of good is Rs7 per unit a consumer buys 12 units. When price falls to Rs6 per unit he spends Rs72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.

Chapter: [1.02] Consumer Equilibrium and Demand
Concept: Measurement of Elasticity of Demand - Percentage-change Method
[4]13 | Attempt Any One
[4]13.1

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

Chapter: [1.05] Concept of Production and Production Function
Concept: Law of Variable Proportions
[4]13.2

Explain how changes in prices of other products influence the supply of a given product.

Chapter: [1.04] Market Mechanism
Concept: Effects of Shifts in Demand and Supply
[6]14

Explain how do the following influence demand for a good:
i. Rise in income of the consumer.
ii. Fall in prices of the related goods

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

Explain the conditions of a producer's equilibrium in terms of marginal cost and marginal revenue. Use diagram.

Chapter: [1.03] Producer Behaviour and Supply
Concept: Concept of Producer's Equilibrium
[6]16 | Attempt Any One
[6]16.1

A market for a good is in equilibrium. There is simultaneous "increase" both in demand and supply of the good. Explain its effect on the market price

Chapter: [1.04] Market Mechanism
Concept: Market Equilibrium
[6]16.2

Market for a good is in equilibrium. There is simultaneous "decrease" both in demand and supply of the good. Explain its effect on market price

Chapter: [1.04] Market Mechanism
Concept: Market Equilibrium
[1]17

Define stock variable

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

Define capital goods.

Chapter: [2.01] National Income and Related Aggregates
Concept: Basic Concepts - Capital Goods
[1]19

What are demand deposits?

Chapter: [2.02] Money and Banking
Concept: Currency Held by the Public and Net Demand Deposits Held by Commercial Banks
[1]20

Define a Tax.

Chapter: [5.01] Fiscal Policy
Concept: Direct and Indirect Tax
[1]21

Give meaning of managed floating exchange rate.

Chapter: [2.05] Balance of Payments
Concept: Concept of Foreign Exchange Rate
[3]22

Calculate Gross Value Added at Factor Cost:

i Units of output sold (units) 1,000
ii Price per unit of output (Rs) 30
iii. Depreciation (Rs) 1,000
iv. Intermediate cost (Rs) 12,000
v. Closing stock (Rs) 3,000
vi. Opening stock (Rs) 2,000
vii. Excise (Rs) 2,500
viii. Sales tax (Rs) 3,500

 

Chapter: [2.01] National Income and Related Aggregates
Concept: Aggregates Related to National Income - Gross Value Added and Net Value Added
[3]23

Explain the ‘store of value’ function of money. How has solved the related problem created by barter?

Chapter: [2.04] Money
Concept: Money - Store of Value
[3]24

Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.

Chapter: [1] Understanding Economics
Concept: Concept of Aggregate Demand and Aggregate Supply
[3]25

Find national income from the following:

Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50

Chapter: [2.01] National Income and Related Aggregates
Concept: Concept of National Income
[3]26 | Attempt Any One
[3]26.1

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

Chapter: [2.04] Government Budget and the Economy
Concept: Classification of Expenditure
[3]26.2

Explain the role of Government budget in allocation of resources.

Chapter: [2.04] Government Budget and the Economy
Concept: Government Budget - Allocation of Resources
[4]27

Giving reason explain how should the following be treated in estimating national income:

i. Expenditure on fertilizers by a farmer.
ii. Purchase of tractor by a farmer.

Chapter: [2.01] National Income and Related Aggregates
Concept: Concept of National Income
[4]28 | Attempt Any One
[4]28.1

Explain the components of Legal reserve Ratio.

Chapter: [2.05] Commercial Bank
Concept: Commercial Banks
[4]28.2

Explain bankers bank function of a Central bank.

Chapter: [4.02] Banking
Concept: Central Bank Function - Banker's Bank
[4]29

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
[6]30

Find out (a) national income and (b) net national disposable income:

S. No.                            Items                                                    (Rs crores)

i.            Factor income from abroad                                                  15
ii.           Private final consumption expenditure                                  600
iii.          Consumption of fixed capital                                                50
iv.          Government final consumption expenditure                         200
v.           Net current transfers to abroad                                           (-) 5
vi.          Net domestic fixed capital formation                                    110
vii.         Net factor income to abroad                                                10
viii.        Net imports                                                                     (-) 20
ix.          Net indirect tax                                                                   70
x.          Change in stocks                                                              (-) 10

Chapter: [2.01] National Income and Related Aggregates
Concept: National Disposable Income (Gross and Net)
[6]31 | Attempt Any One
[6]31.1

Explain the concept of 'excess demand' in macroeconomics. Also explain the role of 'open market operation' in correcting it.

Chapter: [1] Understanding Economics
Concept: Concept of Aggregate Demand and Aggregate Supply
[6]31.2

Explain the concept of 'deficient demand' in macroeconomics.

Chapter: [1] Understanding Economics
Concept: Concept of Aggregate Demand and Aggregate Supply

explain the role of Bank Rate in correcting deficient demand?

Chapter: [1] Understanding Economics
Concept: Concept of Aggregate Demand and Aggregate Supply
[6]32

Explain the distinction between autonomous and accommodating transactions in balance of payments. Also explain the concept of balance of payments 'deficit' in this context

Chapter: [2.05] Balance of Payments
Concept: Concept of Balance of Payments Account
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