Select Board & Class

# Board Paper of Class 12-Commerce 2009 Economics (SET 1) - Solutions

General Instructions:
(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

Give two examples of Microeconomic studies.

VIEW SOLUTION
• Question 2

When is the demand of a commodity said to be inelastic?

VIEW SOLUTION
• Question 4

What causes a downward movement along a supply curve?

VIEW SOLUTION
• Question 6

Why does an economic problem arise? Explain.

OR

Explain the problem of ‘What to produce’.

VIEW SOLUTION
• Question 7

Distinguish between a normal good and an inferior good. Give example in each case.

VIEW SOLUTION
• Question 8

How is the price elasticity of demand of a commodity affected by the number of its substitutes? Explain.

VIEW SOLUTION
• Question 9

Explain the meaning of ‘increase in supply’ and ‘increase in quantity supplied’ with the help of a schedule.

VIEW SOLUTION
• Question 10

Why is a firm under Perfect Competition a price-taker? Explain.

VIEW SOLUTION
• Question 11

Complete the following table:

 Output (Units) Average Variable Cost (Rs) Total Cost  (Rs) Marginal Cost (Rs) 1 - 60 20 2 18 - - 3 - - 18 4 20 120 - 5 22 - -

OR

Complete the following table:

 Output (Units) Price (Rs) Total Revenue  (Rs) Marginal Revenue (Rs) 4 9 36 5 - - 4 6 - 42 - 7 6 - - 8 - 40 -

VIEW SOLUTION
• Question 12

Commodities X and Y have equal price elasticity of supply. The supply of X rises from 400 units to 500 units due to a 20 per cent rise in its price. Calculate the percentage fall in supply of Y if its price falls by 9 per cent.

VIEW SOLUTION
• Question 13

From the following schedule find out the level of output at which the producer is in equilibrium. Give reasons for your answer.

 Output (Units) Price (Rs) Total Cost (Rs) 1 24 26 2 24 50 3 24 72 4 24 92 5 24 115 6 24 139 7 24 165

VIEW SOLUTION
• Question 14

Explain the causes of a rightward shift in demand curve of a commodity of an individual consumer.

OR

Explain the conditions of consumer’s equilibrium in case of (i) single commodity and (ii) two commodities. Use utility approach.

VIEW SOLUTION
• Question 15

Giving reasons, state whether the following statements are true or false:

(i) When there are diminishing returns to a factor, total product always decreases.

(ii) Total product will increase only when marginal product increases.

(iii) When marginal revenue is zero, average revenue will be constant.

VIEW SOLUTION
• Question 16

With the help of a diagram explain the effect of “decrease” in demand of a commodity on its equilibrium price and quantity.

VIEW SOLUTION
• Question 17

Why is repayment of loan a capital expenditure?

VIEW SOLUTION
• Question 18

What is meant by excess demand in Macroeconomics?

VIEW SOLUTION
• Question 19

What can be the minimum value of investment multiplier?

VIEW SOLUTION
• Question 22

Complete the following table:

 Income Saving Marginal Propensity to Consume Average Propensity to Save 0 – 12 20 – 6 – – 40 0 – – 60 6 – –

VIEW SOLUTION
• Question 23

State any three points of distinction between Central Bank and Commercial Banks.

VIEW SOLUTION
• Question 24

How can a government budget help in reducing inequalities of income? Explain.

VIEW SOLUTION
• Question 25

Explain the circular flow of income.

OR

Distinguish between intermediate products and final products. Give examples.

VIEW SOLUTION
• Question 26

List the items of the current account of balance of payments account. Also define ‘balance of trade’.

VIEW SOLUTION
• Question 27

Explain the meaning and two merits of fixed foreign exchange rate.

OR

Explain two sources each of demand and supply of foreign exchange.

VIEW SOLUTION
• Question 28

State the four functions of money. Explain any one of them.

VIEW SOLUTION
• Question 29

Distinguish between:

(i) Direct tax and indirect tax.

(ii) Revenue deficit and fiscal deficit.

VIEW SOLUTION
• Question 30

How will you treat the following while estimating domestic factor income of India? Give reasons for your answer.

(i) Remittances from non-resident Indians to their families in India.

(ii) Rent paid by the embassy of Japan in India to a resident Indian.

(iii) Profits earned by branches of foreign bank in India.

VIEW SOLUTION
• Question 31

Give consumption function C = 100 + 0.75 Y (where C = consumption expenditure and Y = national income) and investment expenditure Rs. 1000, calculate.

(i) Equilibrium level of national income.

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

OR

What changes will take place to bring an economy in equilibrium if

(i) Planned savings are greater than planned investment and

(ii) Planned savings are less than planned investment

VIEW SOLUTION
• Question 32

Calculate “Gross National Product at factor cost” from the following data by (i) income method, and (ii) expenditure method:

 S. No. Items (Rs in crore) (i) Private final consumption expenditure 1,000 (ii) Net domestic capital formation 200 (iii) Profits 400 (iv) Compensation of employees 800 (v) Rent 250 (vi) Government final consumption expenditure 500 (vii) Consumption of fixed capital 60 (viii) Interest 150 (ix) Net current transfers from rest of the world (–) 80 (x) Net factor income from abroad (–) 10 (xi) Net exports (–) 20 (xii) Net indirect taxes 80

VIEW SOLUTION
More Board Paper Solutions for Class 12 Commerce Economics

• ### Board Paper of Class 12-Commerce 2008 Economics (SET 1) - Solutions

Board Paper Solutions for Other Subjects

### Board Paper Solutions for Class 12 Commerce English

What are you looking for?

Syllabus