CBSE Board Class 12 Economics Previous Year Question Papers 2005

PREVIOUS QUESTION PAPER 2005
ECONOMICS
CLASS XII
Time : 3 hours              Marks:100 
General instructions:
1. All questions are compulsory
2. Questions 1 and 13 are very short answer questions.  Their each part is of one mark.
Answer to each of these parts should be written in one set.
3. Questions 2 to 5 and 14 to 17 are short answer type questions of 3 marks each.
Answer to each of these should not exceed 60 words.
4. Questions 6 to 9 and 18 to 21 also short answer questions of 4 marks each.  Answer to
each of these should not exceed 70 words.
5. Questions 10 to 12 and 22 to 24 are long answer questions of 6 marks each.  Answer to
each of these should not exceed 100 words.
6. Attempt all parts of questions at one page.

SECTION A  :  INTRODUCTORY MICRO ECONOMIC THEORY

1 Answer the following:
(a) What is meant by equilibrium quantity?
(b) Define variable costs.
(c) What is meant by elasticity of demand?
(d) What does a rightward shift in production possibility curve indicate?  1x4=4

2 Mention three features of perfect competition. 3

3 With the help of a hypothetical table draw a Production Possibility Curve. 3

4 Distinguish between monopoly and monopolistic competition. 3

5 With the help of a suitable diagram, explain the process of determination of
equilibrium price of a commodity under perfectly competitive market.3

6 Explain the relationship between marginal cost and average variable cost with the
help of diagram.4 

7 Calculate price elasticity of demand in the following cases; using total expenditure
method:
(i)      Price (Rs.)                Quantity demanded
8 100
10                                               90
(ii)     Price (Rs.)                Quantity demanded
8 100
10                                               80  2, 2

8 Distinguish between decrease in quantity demanded (contraction of demand) of a
commodity and decrease in demand. (Use diagrams).4

9 How does a change in the price of related goods affect the demand of a commodity? 
Explain. 
OR
Distinguish between:
(a) Normal good and inferior good.
(b) Complementary good and substitute good.  4

10 (a)  Calculate Total Revenue and Marginal Revenue at each level of output from the
following information and  (b)  Draw  the Total Revenue and Marginal Revenue
Curves from the obtained data.
Output  (Units)                  Total  Revenue                  Marginal  Revenue                          Average
Revenue(Rs.)
1                                               --                         --                                              5
2                                               --                         --                                              5 
3                                               --                         --                                              5
4                                               --                         --                                              5
6

11 Explain any four determinants of the Market supply of a Commodity.
OR
Define price elasticity of supply.  Briefly explain the two methods of measuring it.  6 12 What is meant by returns to a factor?  State the three phases of the law of variable
proportion.6

       
SECTION B :  INTRODUCTORY MACRO ECONOMIC THEORY
 
13.Answer the following questions:
a. Name any two-invisible items of current account of balance of payments.
b. Give one point of difference between macro and micro-economics.
c. Calculate the value of imports when balance of trade (merchandise) is Rs.(-)
400 crores and value of exports is 300 crores.
d. Price determination of a commodity is a subject-matter of micro or macro
economics.1x4=4

14 Explain any two fiscal policy measures to remedy the problem of excess demand 
in an economy.3

15 Distinguish between gross national income at market price and net domestic
income at factor cost.3

16 State three main sources of demand for foreign currency. 3

17 In an economy the actual level of income is Rs.500 crores whereas the full
employment level of income is Rs.800 crores.  The MPC is 0.75.  Calculate the
increase in investment to achieve the full employment level of income. 3

18 Give any four major functions of a Central Bank.
OR
State any four-agency functions of a Commercial Bank. 4

19 Explain any  two  drawbacks of the barter system.  How does money help in
removing these drawbacks?4

20 Distinguish between: -
(a) Direct and indirect taxes.
(b) Revenue receipts and capital receipts  4

21 What is meant by fiscal deficit?  What are the implications of a large fiscal deficit? 4 22 From the following information calculate gross national income by (a) income
method   (b) expenditure method.
                                                                                         (Rs. in crores)
1. Factor income from abroad                                                   10
2. Compensation of employees                                               150
3. Net domestic capital formation                                             50
4. Private final consumption expenditure                                220
5. Factor income to abroad                                                         15
6. Change in stock                                                                       15
7. Employer’s contribution to social security schemes               10                 
8. Consumption of fixed capital                                                   15
9. Interest                                                                                      40
10. Exports                                                                                      20
11. Imports                                                                                      25
12. Indirect taxes                                                                              30
13. Subsidies                                                                                    10
14. Rent                                                                                            40
15. Govt. final consumption expenditure                                         85
16. Profit                                                                                         100  3, 3

23 Explain the value added method of estimating national income with the help of a
suitable example.
OR
Distinguish between:-
(a) Domestic product and national product
(b) Intermediate goods and final goods
(c) Factor income and transfer receipt.  6

24 Explain with the help of diagrams that the equilibrium level of income and employment is not necessarily at a full employment level.6