CBSE & NCERT Free Sample Papers Class 12 Economics : Question Paper

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General Instructions:

All questions in both sections are compulsory. However, there is an internal choice in some questions.
Marks for questions are indicated against each question.
Question 1-5 and 16-20 are very short answer questions carrying 1 mark each. They are required to be answered in one sentence.
Question 6-8 and 21-23 are short answer questions carrying 3 marks each. Answers to them should not normally exceed 60 words each.
Question 9-11 and 24-26 are also short answer questions carrying 4 marks each. Answers to them should not normally exceed 70 words each.
Question 12-15 and 27-30 are long answer questions carrying 6 marks each. Answers to them should not normally exceed 100 words each.
Answers should be brief and to the point and the above word limit be adhered to as far as possible.

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SECTION A: INTRODUCTORY MICRO-ECONOMICS

What is the relationship between average cost and average marginal cost when the firm continues increasing its production?

Suppose total revenue is rising at a diminishing rate as more and more units of a commodity are sold, marginal revenue would be :

(a) Greater than AR

(b) Equal to AR

(d) Rising

A consumer having a monotonic preference is called “rational”. True / False. Give reason.
Heterogeneous product is the characteristic of

(a) Monopolistic Competition

(b) Oligopoly

(d) Both (a) and (b)

There is an indefinite relation between price and demand for the product of a firm under :

(a) Monopoly

(b) Monopolistic competition

(d) Perfect Competition

Suppose the Marginal Rate of Substitution is greater than the Marginal Rate of Exchange. Explain how will a consumer reach equilibrium.
There is a vaccine which can prevent cancer. Market experts feel that its use can be increased 5 times if its price falls to half. Calculate the price elasticity of demand for the vaccine.
The farmers who feed the whole country are unable to feed their own families. Name the government policy which is helpful for the farmers. How it is beneficial to Write its one consequence.

Explain the chain effects, if Reliance Fresh is selling potatoes at a price below the market price.

Explain the effect of a change in income of the consumer after the implementation of the 7^th Pay Commission on the demand for water cooler and air conditioners.
Complete the following table:


Output (units)	AVC (`)	TC (`)	MC (`)
1	-	60	20
2	18	-	-
3	-	-	18
4	20	120	-
5	22	-	-

Define cost. Distinguish between costs on the basis of money payment involved.

11. When the price of a commodity falls by 10%, the total revenue of the firm becomes half of the original total revenue. If the new price is Rs.54, only 10 units are supplied. Calculate the original quantity and the price elasticity of supply.

12. Assuming that no resources are equally efficient in the production of all goods, name the curve which solves the central problems of the economy. Write two properties of this curve. How the “Start-Up India” program will affect this curve.

Are the following statements true or false? Give reasons

(a) If the price elasticity of demand is zero, expenditure on the commodity does not change with a change in the price of the commodity.

(b) The law of demand states inverse and proportional relation between price and quantity.

The following table shows the quantity demanded at different prices. Total costs at corresponding levels of output is 0, 24, 60, 100 and 150. Calculate the levels of profit at which profits are maximum using the MR–MC approach. State the conditions of producer equilibrium.


Price	12	10	7.6	6	4
Quantity Demanded (Units)	0	4	10	15	20

Giving reasons, whether the following statements are true or false.

(a) Excess demand for a commodity exit when it’s market price is greater than the equilibrium price.

(b) Under Monopolistic competition, a firm faces a perfectly elastic demand curve.

“Onions make people cry”. How the govt. can control the market price of onions by market forces. Explain with the help of a diagram.

SECTION B: INTRODUCTORY MACROECONOMICS

16. Name the variables which are measured at the point time. Give one example.

17. Why indirect taxes are not included in factor cost.

18. Escheat is an example of

(a) Revenue Receipts

(b) Capital Receipts

(d) Capital Expenditure

19. Primary deficit equals:

(a) Interest payments

(b) Borrowings

(d) Borrowings less interest payments

20. Foreign exchange transactions because of Building purchased by Tata Sons in Germany are called:

(a) Current account transactions

(b) Capital account transactions

(d) Accommodating transactions

21. A news headlines in The Hindustan Times :

‘Maggi worth ` 320 crores being destroyed: Nestle.

How it affects the GDP of India. Give reasons in support of your answer.

22. A consumer spends ` 17,500 out of his total income of ` 20,000. When his income increased to ` 25,000, he spends ` 21,000. Name two types of consumption on the basis of this information. Which of the two has a direct relation with the multiplier? Find an investment multiplier from the above information.

23. Explain the role of open market operation to rectify the situation of the inflationary gap.

24. The government incurs expenditure on the frequent visits of the Prime Minister to abroad who in turn invite Foreign Direct Investment in the country. Analyse its impact on national income and welfare of the people.

25. Teacher: It is considered a lubricant, it is the resources to flow between factors. From the above statement answer the followings :

(a) Name the resource which is mentioned by the teacher.

(b) ‘It can be used now or used in the future i.e. its value can be retrieved at a later date’. Explain the function of the resource which is mentioned by this statement.

26. What is Legal Reserve Requirement? State its components. How it can affect the credit creation function of the commercial bank.

27. Define capital expenditure in a government budget. Explain how the government budget can be used as a tool in economic stability and growth in the economy.

28. In economy A, prices are rising high. People are becoming more and poorer. They are criticising a government that it has failed to check inflation.

In economy B, prices are falling rapidly. People are cursing the government and seek that government should intervene and help in this situation.

On the basis of above two example:

(a) Identify the class of people in both scenarios.

(b) Name the situation/conditions faced by both the economies.

29. (i) Both autonomous and accommodating transactions depend on each other. True/ false. Give reasons.

(ii) The case I: Govt. of India change the prices of US dollar from ` 60 to ` 62.

(iii) Case II: Rise in market price of US dollar from 7 60 to ` 62.

On the basis of the above information, differentiate between the two cases.

30. From the following data, calculate (a) GDPFC and (b) factor income to abroad.

(i) Gross domestic capital formation = 600
(ii) Interest = 200
(iii) GNPMP = 2800
(iv) Rent = 300
(v) Compensation of employees = 1600
(vi) Profits = 400
(vii) Dividends = 150
(viii) Factor income from abroad = 50
(ix) Change in stock = 100
(x) Net indirect taxes = 240
(xi) Net fixed capital formation = 400
(xii) Net exports = (–) 30

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