Board Paper of Class 12-Commerce 2008 Economics (SET 1) - Solutions
(i) All questions in both the sections are compulsory.
(ii) Marks for questions are indicated against each.
(iii) Questions 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) Questions Nos. 6-10 and 22-26 are short-answer questions carrying 3 marks each. Answers to them should normally not exceed 60 words each.
(v) Questions Nos. 11-13 and 27-29 are also short-answer questions carrying 4 marks each. Answers to them should normally not exceed 70 words each.
(vi) Questions 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 far as possible.
- Question 1
Define ‘Marginal Rate of Transformation’.VIEW SOLUTION
- Question 2
What is a demand schedule?VIEW SOLUTION
- Question 3
Define ‘production function’.VIEW SOLUTION
- Question 4
What is ‘market supply’?VIEW SOLUTION
- Question 5
Define ‘equilibrium price’.VIEW SOLUTION
- Question 6
Explain the central problem of ‘choice of technique’.VIEW SOLUTION
- Question 7
Price elasticity of demand of a good is (−) 1. At a given price the consumer buys 60 units of the good. How many units will the consumer buy if the price falls by 10 per cent?VIEW SOLUTION
- Question 8
Given the market price of a good, how does a consumer decide as to how many units of that good to buy? Explain.VIEW SOLUTION
- Question 9
What is the likely effect on the supply of a good if the prices of the inputs used in production of that good fall? Explain.VIEW SOLUTION
- Question 10
Explain what happens to the profits in the long run if the firms are free to enter the industry.
Explain what happens to losses in the long run if the firms are free to leave the industry.VIEW SOLUTION
- Question 11
Explain producer’s equilibrium using a schedule. Use total cost and total revenue approach.
Distinguish between (i) fixed cost and variable cost giving examples and (ii) average cost and marginal cost giving an example.VIEW SOLUTION
- Question 12
Draw supply curves with price elasticity of supply throughout equal to (i) zero, (ii) one, (iii) infinity and (iv) less than one.VIEW SOLUTION
- Question 13
Complete the following table:
- Question 14
Explain the effect of the following on demand for a good:
(i) Rise in income.
(ii) Rise in prices of related goods.VIEW SOLUTION
- Question 15
Explain, with the help of numerical examples, the effect on total output of a good when all the inputs used in production of that good are increased simultaneously and in the same proportion.VIEW SOLUTION
- Question 16
Given market equilibrium of a good, what are the effects of simultaneous increase in both demand and supply of that good on its equilibrium price and quantity.
Explain the implications of the following:
(i) The feature differentiated products’ under monopolistic competition.
(ii) The feature large number of seller’s under perfect competition.VIEW SOLUTION
- Question 17
Define ‘aggregate supply’.VIEW SOLUTION
- Question 18
Give meaning of deficient demand.VIEW SOLUTION
- Question 19
What is a commercial bank?VIEW SOLUTION
- Question 20
Define government budget.VIEW SOLUTION
- Question 21
What is fixed exchange rate system?VIEW SOLUTION
- Question 22
Calculate Net Value Added at factor cost from the following data:
Change in stock
Imports of raw materials
- Question 23
When exchange rate of foreign currency falls, its demand rises. Explain, how?VIEW SOLUTION
- Question 24
Distinguish between balance of trade and balance on current account.VIEW SOLUTION
- Question 25
Explain the ‘medium of exchange’ function of money.
Explain the evolution of money.VIEW SOLUTION
- Question 26
Give meaning of capital expenditure and revenue expenditure in a government budget.VIEW SOLUTION
- Question 27
In an economy an increase in investment leads to increase in national income which is three times more than the increase in investment. Calculate marginal propensity of consume.VIEW SOLUTION
- Question 28
Explain the lending function of commercial banks.
Explain ‘banker to the government’ function of central bank.VIEW SOLUTION
- Question 29
What is revenue deficit? What are its implications?VIEW SOLUTION
- Question 30
Calculate ‘National Income’ and Private Income’ from the following data:
(Rs in crore)
Net current transfers to the rest of the world
Private final consumption expenditure
National debt interest
Current transfers from government
Net domestic product at factor cost accruing to government
Government final consumption expenditure
Net indirect tax
Net domestic capital formation
Net factor income from abroad
- Question 31
Explain consumption function with the help of a schedule and diagram.
Explain ‘saving function’ with the help of a schedule and diagram.VIEW SOLUTION
- Question 32
Giving reasons, explain how the following are treated in estimating national income:
(i) Wheat grown by a farmer but used entirely for family’s consumption.
(ii) Earnings of the shareholders from the sale of shares.
(iii) Expenditure by government on providing free education.VIEW SOLUTION