Class XII (Foreign)
Subject – Economics
Time allowed: 3 Hours Maximum Marks: 100
General Instructions:
(i) Answer all questions in both the sections are compulsory.
(ii) Marks for questions are indicated against each.
(iii) Question Nos. 1-5 and 17-21 are very short-answer questions carrying 1 mark each. They are required to be answered in one sentence each.
(iv) Question Nos. 6-10 and 22-26 are short-answer questions carrying 3 mark each. Answers to them should normally not exceed 60 words each.
(v) Question Nos. 11-13 and 27-29 are also short-answer questions carrying 4 mark each. Answers to them should normally not exceed 70 words each.
(vi) Question Nos. 14-16 and 30-32 are long-answer questions carrying 6 marks each. Answers to them should normally not exceed 100 words each.
(vii) Answers should be brief and to the point and the above word limits should be adhered to as for as possible.
SECTION - A
1. Why does an economic problem arise? 1
2. When is the demand of a commodity said to be elastic? 1
3. Define variable costs. 1
4. What causes an upward movement along a supply curve? 1
5. Define marginal revenue. 1
6. Explain the problem of ‘how to produce’. 3
7. Explain the law of supply with the help of a supply schedule. 3
8. Draw a straight line demand curve and show on it a point at which
(i) Price elasticity of demand > 1
(ii) Price elasticity of demand < 1
(iii) Price elasticity of demand = 1 3
For Blind Candidates only in lieu of Q. No. 8
What is meant by price elasticity of demand? If elasticity of demand of a commodity is less then 1, what will be the effect of a fall in its price on total expenditure on it? Explain.
9. Explain consumer’s equilibrium in case of a single commodity, through the utility approach.
OR
Explain the law of diminishing marginal utility with the help of a utility schedule. 3
10. How is the supply of a commodity affected by changes in the prices of other commodities? Explain. 3
11. Explain with the help of a total product curve the meaning of increasing returns to a factor.
For Blind Candidates only in lieu of Q. No. 11
Explain the meaning of increasing returns to a factor with the help of a total schedule. 3
12. The ratio of elasticity of supply of commodities A and B is 1:1.5. 20 percent fall in price of A results in a 40 percent fall in its supply. Calculate the percentage increase in supply of B if its price rises from Rs. 10 per unit to Rs. 11 per unit. 4
13. Explain “large number of buyers and sellers” feature of perfect competition.
OR
Explain “freedom of entry and exit to firms” feature of perfect competition. 4
14. Giving reasons, state whether the following statements are true or false:
(i) A producer is in equilibrium when total cost and total revenue are equal
(ii) The difference between average total cast and average variable cost decreases with decrease in the level of output.
(iii) When marginal cost rises, average cost will also rise.
15. Explain three causes of a shift in demand curve of a commodity.
OR
Explain the difference between “decrease in demand”, and ‘decrease in quantity demanded’ with the help of a demand schedule. Give two causes of a decrease in demand.
16. Define equilibrium price. How is it determined? Ex[plain with the help of a schedule.
SECTION - B
17. Can the value of average propensity to save be negative? If yes, when? 1
18. Why is income tax a direct tax? 1
19. What is the relationship between marginal propensity to save and multiplier? 1
20. Give the meaning of deflationary gap. 1
21. Give the meaning of demand deposits of commercial banks. 1
22. Calculate net value added at factor cost from the following data: 3
| (Rs. is crores) | |
| (i) Purchase of machinery to be used in the production unit | 100 |
| (ii) Sales | 200 |
| (iii) Intermediate costs | 90 |
| (iv) Indirect taxes | 12 |
| (v) Change in stock | 10 |
| (vi) Excise duty | 6 |
| (vii) Stock of raw material | 5 |
23. Explain any functions of a commercial bank.
OR
Explain any two functions of a central bank. 3
24. Complete the following table: 3
| Income | Consumption | Marginal Propensity to Save | Average Propensity to Consume |
| 0 | 12 | ------- | -------- |
| 20 | 26 | -------- | -------- |
| 40 | 40 | -------- | -------- |
| 60 | 54 | ------- | -------- |
25. List the type of transactions that are recorded in the current account of balance of payment account. 3
26. How can a government budget help in reallocation of resources in an economy? Explain. 3
27. Explain two merits and two demerits of fixed foreign exchange rate. 4
28. Explain the basis of classifying government receipts into revenue receipts and capital receipts. Give two example of each. 4
OR
Explain the meaning and implications of fiscal deficit.
29. State any two problems of barter system of exchange. How does money solve them? 4
30. While calculating national income of India from its domestic factor income, how will you treat the following? Give reasons for your answer. 6
(i) Salaries received by Indians working in branches of foreign banks in India.
(ii) Profits earned by an Indian bank from its branches abroad.
(iii) Rent paid by embassy of Japan in India to an India resident.
31. C = 100 + 0.75 Y is a consumption function (where C = consumption expenditure and Y = national income) and investment expenditure is 800. On the basis of this information calculate: 6
(i) Equilibrium level of national income:
(ii) Savings at equilibrium level of national income
OR
In an economy, aggregate demand is less than aggregate supply. Is the economy in equilibrium? If not, explain the changes that will bring the economy in equilibrium. 6
32. From the following data, calculate “national income” by (i) income method and (ii) expenditure method.
(i) Net domestic capital formation
(ii) Interest
(iii) Rent
(iv) Private final consumption expenditure
(v) Government final consumption expenditure
(vi) Net exports
(vii) Net indirect taxes
(viii) Net current transfers from rest of the world
(ix) Consumption of fixed capital
(x) Net factor income from abroad
(xi) Profits
(xii) Compensation of employees
CBSE Board Question Papers Class 12th 2009