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

General Instructions:
(i) All questions are compulsory.
(ii) Draw tables/diagrams wherever necessary.
(iii) Figures to the right indicate full marks.
(iv) Write answer of every new question on a new page.

  • Question 1

    Q.1 (A) Fill in the blanks with appropriate words from the brackets:  [5 marks]

    1. Economics is a ________ science.


    2. ___________ appears in monopoly market.

    (Product differentiation/Price discrimination/Large number of sellers/Free entry)

    3. Stock of ________ is not possible.


    4. Transfer of values is a ________ function of money.


    5. __________ is the traditional weapon of credit control.

    (Bank rate/Direct action/Moral persuasion/Issue of direction)


  • Question 2

    Q.1 (B) State whether the following statements are TRUE or FALSE: [5 marks]

    1. Total utility increases at an increasing rate.

    2. Demand increases, when the price decrease.

    3. Demand for durable goods tend to be elastic.

    4. Law of demand is applicable to prestigious goods.

    5. Macro economics concentrates on the study of whole economy.


  • Question 3

    Q.1 (C) Choose the correct answer from the following alternatives:  [5 marks]

    1. Marginal utility of money can never be _________.

    (a) zero

    (b) falling

    (c) constant

    (d) average

    2. Demand for luxury goods is _________.

    (a) elastic

    (b) inelastic

    (c) unitary

    (d) perfectly elastic

    3. With increase in income saving _________.

    (a) decreases

    (b) increases

    (c) remains constant

    (d) is not variable

    4. The cheque which is useful in travelling is _________.

    (a) traveller’s cheque

    (b) crossed cheque

    (c) simple cheque

    (d) overdraft

    5. When expenditure equals with receipts, it is _________ budget.

    (a) balance

    (b) surplus

    (c) deficit

    (d) family


  • Question 4

    Q.1 (D) Match the following Group ‘A’ with Group ‘B’ :                                             [5 marks]

    Group ‘A’ Group ‘B’
    (a) Price and demand (1) Expenditure on defence
    (b) Inelastic demand (2) Average propensity to consume
    (c) Govt. expenditure (3) Less rate of interest
    (d) Consumption function (4) High rate of interest
    (e) Current deposits (5) Salt


    (6) Inverse relationship



    (7) Electricity

  • Question 5

    Q.2 (A) Define of Explain the following concepts. (Any FOUR)                               [8 marks]

    1. Micro economics

    2. Individual demand schedule

    3. Variable capital

    4. Net national income

    5. Marginal propensity to consume

    6. Current deposit

    7. Revenue expenditure

    8. Balanced budget


  • Question 6

    Q.2 (B) Explain with reasons whether the following statements are True or False (Any FOUR) :                               [8 marks]

    1. Goods which have many substitutes have elastic demand.

    2. Product differentiation is the feature of monopolistic

    3. Macro economics studies one family.

    4. Labour is one of the determinants of aggregate supply.

    5. Banks discourage the use of cheques.

    6. Central bank has the monopoly of issuing notes.

    7. The main objective of macro economics is economic growth.

    8. The period of budget is one year.


  • Question 7

    Q.3 (A) Distinguish between (Any FOUR) :                              [8 marks]

    1. Micro economics and Macro economics.

    2. Direct demand and Indirect demand.

    3. Price elasticity of demand and Income elasticity of demand.

    4. Individual supply and Market supply.

    5. Personal income and National income.

    6. Consumption and Saving.

    7. Saving deposits and Current deposits.

    8. Deficit budget and Surplus budget.


  • Question 8

    Q.3 (B) Give reasons or explain the following (Any FOUR) :                               [8 marks]

    1. Utility has no ethical significance.

    2. There are some assumptions to the law of demand.

    3. Supply cannot exceed stock.

    4. Price discrimination is possible in monopoly.

    5. Labour is a perishable factor.

    6. Value of final goods should be measured in gross National product.

    7. Money is what money does.

    8. In the barter system there is direct exchange of goods.


  • Question 9

    Q.4 (A) Write answers in ‘one’ or ‘two’ paragraph each. (Any TWO) :                        [8 marks]

    1. Write the characteristics of Capital.

    2. Explain the expenditure method of measuring National income.

    3. Explain the concept of Saving function.

    4. Explain the secondary function of Money


  • Question 10

    Q.4 (B) Write explanatory notes on. (Any Two)  :                              [8 marks]

    1. Characteristics of Micro economics.

    2. Determinants of Aggregate supply.

    3. General utility functions of a Commercial bank.

    4. Components of Government budget.


  • Question 11

    Q.5 Do you agree with the following statements? Give reasons. (Any TWO) :                              [16 marks]

    1. Demand curve always slopes downward.

    2. Macro economics has many features.

    3. Issuing currency is only one function of the Central bank.


  • Question 12

    Q.6 Answer in detail. (Any TWO) :                                  [16 marks]

    1. Explain the relationship between Marginal utility and Total utility with diagram.

    2. Explain the price equilibrium under perfect competition.

    3. Explain the exceptions of the law of supply.

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