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

General Instructions:
(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 3

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

    VIEW SOLUTION


  • Question 4

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

    VIEW SOLUTION




  • Question 6

    What is opportunity cost? Explain with the help of a numerical example.

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  • Question 7

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

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  • Question 8

    Draw Average Variable Cost, Average Total Cost ad Marginal Cost curves in a single diagram.

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  • Question 9

    An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and explicit cost from this information. Explain.

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  • Question 10

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

    OR

    Explain why firms are mutually interdependent in an oligopoly market.

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  • Question 11

    Define an indifference curve. Explain why an indifference curve is downward sloping from left to right.

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  • Question 12

    When price of good is Rs 7 per unit a consumer buys 12 units. When price falls to Rs6 per unit he spends Rs 72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.

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  • Question 13

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

    OR

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

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  • Question 14

    Explain how do the following influence demand for a good:

    (i) Rise in income of the consumer.

    (ii) Fall in prices of the related goods.

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  • Question 15

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

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  • Question 16

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

    OR

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

    VIEW SOLUTION










  • Question 21

    Give meaning of managed floating exchange rate.

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  • Question 22

    Calculate Gross Value Added at Factor Cost:

    (i)

    Units of output sold (units)

    1,000

    (ii)

    Price per unit of output (Rs.)

    30

    (iii)

    Depreciation (Rs.)

    1,000

    (iv)

    Intermediate cost (Rs.)

    12,000

    (v)

    Closing stock (Rs.)

    3,000

    (vi)

    Opening stock (Rs.)

    2,000

    (vii)

    Excise (Rs.)

    2,500

    (viii)

    Sales tax (Rs.)

    3,500

     

    VIEW SOLUTION


  • Question 23

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

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  • Question 24

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

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  • Question 25

    Find national income from the following:

    Autonomous consumption

    = Rs. 100

    Marginal propensity to consume

    = 0.80

    Investment

    = Rs 50

     

    VIEW SOLUTION


  • Question 26

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

    OR

    Explain the role of Government budget in allocation of resources.

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  • Question 27

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

    (i) Expenditure on fertilizers by a farmer.

    (ii) Purchase of tractor by a farmer.

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  • Question 28

    Explain the components of Legal reserve Ratio.

    OR

    Explain ‘bankers’ bank, function of Central bank.

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  • Question 29

    Explain ‘Revenue Deficit’ in a Government budget? What does it indicate?

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  • Question 30

    Find out (a) national income and (b) net national disposable income:

    S.No.

    Items

    (Rs crores)

    (i)

    Factor income from abroad

    15

    (ii)

    Private final consumption expenditure

    600

    (iii)

    Consumption of fixed capital

    50

    (iv)

    Government final consumption expenditure

    200

    (v)

    Net current transfers to abroad

    (–) 5

    (vi)

    Net domestic fixed capital formation

    110

    (vii)

    Net factor income to abroad

    10

    (viii)

    Net imports

    (–) 20

    (ix)

    Net indirect tax

    70

    (x)

    Change in stocks

    (–) 10

     

    VIEW SOLUTION


  • Question 31

    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.

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  • Question 32

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

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