Board Paper of Class 12-Commerce 2012 Economics (SET 2) - Solutions

What is a price taker firm?

Give meaning of an Economy.

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

What is market Demand?

What is the behaviour of average fixed cost as output increase?

What is ‘Marginal Rate of Transformation’? Explain with the help of an example.

Explain the implication of large number of buyers in a perfectly competitive market.

OR

Explain why are firms mutually interdependent in an oligopoly market.

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

A producer borrows money and opens a shop. The shop premise is owned by him. Identify the implicit and explicit costs from this information. Explain.

Draw Average Variable Cost, Average Total Cost and Marginal Cost Curves in a single diagram.

Define Marginal Rate of Substitution. Explain why is an indifference curve convex?

A consumer buys 10 units of a good at a price of Rs 9 per unit. At price of Rs 10 per unit he buys 9 units. What is price elasticity of demand. Use expenditure approach. Comment on the likely shape of demand curve on the basis of this measure of elasticity.

What does the Law of Variable Proportions show? State the behavior of total product according to this law.

OR

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

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

OR

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

Explain how do the following influences demand for a good:      

(i) Rise in income of the consumer.

(ii) Fall in prices of the related goods.

Explain the conditions of a producer’s equilibrium in terms of marginal cost and marginal revenue.

Given meaning of managed floating exchange rate.

Define a Tax.

Define stock variable.

Define capital goods.

What are demand deposits?

Calculate Net Value Added at Factor Cost:

Distinguish between Revenue Expenditure and Capital Expenditure in a government budget. Give example.

OR

Explain the role of government budget in allocation of resources.

Explain the significance of the ‘Store of Value’ function of money.

Find ‘investment’ from the following:

Outline the steps taken in deriving saving curve from the consumption curve. Use diagram.

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

(i) Payment of bonus by a firm

(ii) Payment of interest on a loan taken by an employee from the employer

Explain ‘revenue deficit’ in a Government budget? What does it indicate?

Explain the components of Legal Reserve Ratio.

OR

Explain ‘bankers’ bank, function of Central bank.

Find out (a) Net National Product at Market price and (b) Gross National Disposable

Income:

Explain the distinction between autonomous and accommodating transaction in balance of payments. Also explain the concept of balance of payment ‘deficit’ in this context.

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

OR

Explain the concept of ‘deficient demand’ in macroeconomics. Also explain the role of Bank Rate in correcting it.