Board Paper of Class 12-Science 2018 Economics (SET 3) - Solutions

General Instructions:

(i) All questions in both sections are compulsory.

(ii) Marks for questions are indicated against each question.

(iii) Question No.1-4 and 13-16 are very short answer questions carrying 1 mark each. They are required to be answered in one sentence each.

(iv) Question No.5-6 and 17-18 are short answer questions carrying 3 marks each. Answers to them should not normally exceed 60 words each.

(v) Question No.7-9 and 19-21 are also short answer questions carrying 4 marks each. Answers to them should not normally exceed 70 words each.

(vi) Question No.10-12 and 22-24 are long answer questions carrying 6 marks each. Answers to them should not normally 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 1
When the total fixed cost of producing 100 units is Rs 30 and the average variable cost Rs 3, total cost is : (Choose the correct alternative)
(a) Rs 3
(b) Rs 30
(c) Rs 270
(d) Rs 330 VIEW SOLUTION

Question 2
When the Average Product (AP) is maximum, the Marginal Product (MP) is : (Choose the correct alternative)

(a) Equal to AP

(b) Less than AP

(c) More than AP

(d) Can be any one of the above VIEW SOLUTION

Question 3
State one example of positive economics. VIEW SOLUTION

Question 4
Define fixed cost. VIEW SOLUTION

Question 5
Explain the central problem of "for whom to produce".

OR

Explain the central problem of "choice of technique". VIEW SOLUTION

Question 6
What is meant by inelastic demand? Compare it with perfectly inelastic demand. VIEW SOLUTION

Question 7
When the price of a commodity changes from Rs 4 per unit to Rs 5 per unit, its market supply rises from 100 units to 120 units. Calculate the price elasticity of supply. Is supply elastic? Give reason. VIEW SOLUTION

Question 8
What is meant by price ceiling? Explain its implications. VIEW SOLUTION

Question 9

Given the price of a good, how will a consumer decide as to how much quantity to buy of that good? Explain.

OR

What is indifference Curve? State three properties of Indifference curves.
VIEW SOLUTION

Question 10
State three characteristics of monopolistic competition. Which of the characteristics separates it from perfect competition and why?

OR

Explain the implications of the following :
(a) Freedom of entry and exit of firms under perfect competition
(b) Non-price competition under oligopoly VIEW SOLUTION

Question 11
Explain the conditions of consumer's equilibrium using Indifference Curve Analysis. VIEW SOLUTION

Question 12
Explain the conditions of producer's equilibrium in terms of marginal revenue and marginal cost. VIEW SOLUTION

Question 13
Define money supply. VIEW SOLUTION

Question 14
Which of the following affects national income? (Choose the correct alternative)
(a) Goods and Services tax
(b) Corporation tax
(c) Subsidies
(d) None of the above VIEW SOLUTION

Question 15
Why does consumption curve not start from the origin? VIEW SOLUTION

Question 16
The central bank can increase availability of credit by : (Choose the correct alternative)

(a) Raising repo rate

(b) Raising reverse repo rate

(c) Buying government securities

(d) Selling government securities VIEW SOLUTION

Question 17
Which among the following are final goods and which are intermediate goods? Give reasons.
(a) Milk purchased by a teal stall
(b) Bus purchased by a school
(c) Juice purchased by a student from the school canteen

OR

Give nominal income, how can we find real income? Explain. VIEW SOLUTION

Question 18
Define multiplier. What is the relation between marginal propensity to consume and multiplier? Calculate the marginal propensity to consume if the value of multiplier is 4. VIEW SOLUTION

Question 19

What is meant by inflationary gap? State three measures to reduce this gap.

OR

What is meant by aggregate demand? State its components.
VIEW SOLUTION

Question 20
The value of marginal propensity to consume is 0.6 and initial income in the economy is Rs 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of Rs 80 crores. VIEW SOLUTION

Question 21
Explain the role of the Reserve Bank of India as the "lender of last resort". VIEW SOLUTION

Question 22
(a) Explain the impact of rise in exchange rate on national income.

(b) Explain the concept of 'deficit' in balance of payments. VIEW SOLUTION

Question 23

Calculate (a) Net National Product at market price, and (b) Gross Domestic Product at factor cost :

		(Rs in crores)
(i)	Rent and interest	6,000
(ii)	Wages and salaries	1,800
(iii)	Undistributed profit	400
(iv)	Net indirect taxes	100
(v)	Subsidies	20
(vi)	Corporation tax	120
(vii)	Net factor income to abroad	70
(viii)	Dividends	80
(ix)	Consumption of fixed capital	50
(x)	Social security contribution by employers	200
(xi)	Mixed income	1,000

VIEW SOLUTION

Question 24
Explain the meaning of the following"
(a) Revenue deficit
(b) Fiscal deficit
(c) Primary deficit

OR

Explain the following objectives of government budget:
(a) Allocation of resources
(b) Reducing income inequalities VIEW SOLUTION

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