Board Paper of Class 12-Humanities 2012 Economics (SET 1) - Solutions

Define Microeconomics?

Give one reason for shift in demand curve.

What is the behaviour of Total Variable Cost, as output increases?

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?

What is a price-maker firm?

Define Production Possibilities Curve. Explain why it is downward sloping from left to right.

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.

Draw total Variable Cost, Total Cost, and Total Fixed Cost curves in a single diagram.

A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain.

Explain the implications of large number of sellers in a perfectly competitive market.

OR

Explain why there are only a few firms in an oligopoly market.

Define an indifference map. Why does indifference curve to the right show more utility? Explain.

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.

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

OR

Explain how changes in prices of inputs influence the supply of a product.

Explain the difference between (i) inferior goods and normal goods and (ii) cardinal utility and ordinal utility. Give example in each case.

Explain the distinction between “change in quantity supplied” and “change in supply”. Use diagram.

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.

OR

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.

Define flow variable.

Define Consumption Goods.

What are time deposits?

Define a ‘Direct tax’.

What is a fixed exchange rate?

Find Net Value added at Market Price:

Explain the ‘standard of deferred payment’ function of money.

Outline the steps taken in deriving Consumption Curve from the Saving Curve. Use diagram.

Find Consumption Expenditure from the following:

Distinguish between revenue receipts and capital receipts in a government budget. Give example in each case.

OR

Explain the role of government budget in bringing economic stability

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.

Explain the ‘lender of last resort’ function of the central bank.

OR

Explain ‘government’s banker’ function of the central bank.

Explain the concept of ‘fiscal deficit’ in a government budget. What does it indicate?

Find out (i) Gross National Product at Market Price and (ii) Net Current Transfers from Abroad:

Explain the concept of ‘inflationary gap’. Also explain the role of ‘legal reserves’ in reducing it.

OR

Explain the concept of ‘deflationary gap’. Also explain the role of ‘margin requirements’ in reducing it.

Give the meaning of ‘foreign exchange’ and ‘foreign exchange rate’. Giving reason, explain the relation between foreign exchange rate and demand for foreign exchange.