Board Paper of Class 12-Commerce 2012 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 Microeconomics?VIEW SOLUTION
- Question 2
Give one reason for shift in demand curve.VIEW SOLUTION
- Question 3
What is the behaviour of Total Variable Cost, as output increases?VIEW SOLUTION
- Question 4
What is the behaviour of Marginal Revenue in a market in which a firm can sell any quantity of the output it produces at a given price?VIEW SOLUTION
- Question 5
What is a price-maker firm?VIEW SOLUTION
- Question 6
Define Production Possibilities Curve. Explain why it is downward sloping from left to right.VIEW SOLUTION
- Question 7
A consumer consumes only two goods X and Y and is in equilibrium. Price of X falls. Explain the reaction of the consumer through the Utility Analysis.VIEW SOLUTION
- Question 8
Draw total Variable Cost, Total Cost, and Total Fixed Cost curves in a single diagram.VIEW SOLUTION
- Question 9
A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain.VIEW SOLUTION
- Question 10
Explain the implications of large number of sellers in a perfectly competitive market.
Explain why there are only a few firms in an oligopoly market.
- Question 11
Define an indifference map. Why does indifference curve to the right show more utility? Explain.VIEW SOLUTION
- Question 12
A consumer buys 10 units of a commodity at a price of Rs. 10 per unit. He incurs an expenditure of Rs 200 on buying 20 units. Calculate price elasticity of demand by the percentage method. Comment upon the shape of demand curve based on this information.VIEW SOLUTION
- Question 13
What does the Law of Variable Proportions show? State the behaviour of marginal product according to this law.
Explain how changes in prices of inputs influence the supply of a product.VIEW SOLUTION
- Question 14
Explain the difference between (i) inferior goods and normal goods and (ii) cardinal utility and ordinal utility. Give example in each case.VIEW SOLUTION
- Question 15
Explain the distinction between “change in quantity supplied” and “change in supply”. Use diagram.VIEW SOLUTION
- Question 16
Market for a good is in equilibrium. There is simultaneous “decrease” both in demand and supply but there is no change in market price. Explain with the help of a schedule how it is possible.
Market for a good is in equilibrium. Explain the chain of reactions in the market if the price is (i) higher than equilibrium price and (ii) lower than equilibrium price.VIEW SOLUTION
- Question 17
Define flow variable.VIEW SOLUTION
- Question 18
Define Consumption Goods.VIEW SOLUTION
- Question 19
What are time deposits?VIEW SOLUTION
- Question 20
Define a ‘Direct tax’.VIEW SOLUTION
- Question 21
What is a fixed exchange rate?VIEW SOLUTION
- Question 22
Find Net Value added at Market Price:
Output sold (units)
Price per unit of output (Rs)
Closing stock (Rs)
Opening stocks (Rs)
Sales tax (Rs)
Intermediate cost (Rs)
- Question 23
Explain the ‘standard of deferred payment’ function of money.VIEW SOLUTION
- Question 24
Outline the steps taken in deriving Consumption Curve from the Saving Curve. Use diagram.
- Question 25
Find Consumption Expenditure from the following:
= Rs 5,000
= Rs 1,000
Marginal propensity to consume
- Question 26
Distinguish between revenue receipts and capital receipts in a government budget. Give example in each case.
Explain the role of government budget in bringing economic stabilityVIEW SOLUTION
- Question 27
Should the following be treated as final expenditure or intermediate expenditure? Give reasons for your answer.
(i) Purchase of furniture by a firm.
(ii) Expenditure on maintenance by a firm.VIEW SOLUTION
- Question 28
Explain the ‘lender of last resort’ function of the central bank.
Explain ‘government’s banker’ function of the central bank.VIEW SOLUTION
- Question 29
Explain the concept of ‘fiscal deficit’ in a government budget. What does it indicate?VIEW SOLUTION
- Question 30
Find out (i) Gross National Product at Market Price and (ii) Net Current Transfers from Abroad:
Private final consumption expenditure
Net national disposable income
Government final consumption expenditure
Net Indirect tax
Net domestic fixed capital formation
Net factor income to abroad
- Question 31
Explain the concept of ‘inflationary gap’. Also explain the role of ‘legal reserves’ in reducing it.
Explain the concept of ‘deflationary gap’. Also explain the role of ‘margin requirements’ in reducing it.VIEW SOLUTION
- Question 32
Give the meaning of ‘foreign exchange’ and ‘foreign exchange rate’. Giving reason, explain the relation between foreign exchange rate and demand for foreign exchange.VIEW SOLUTION