CBSE Board Class 12 Economics Previous Year Question Papers 2007

                                                                          ECONOMICS
Time allowed : 3 hours ]                                                                              [ Maximum Marks: 100

Note :
(i) All questions in both the sections are compulsory,
(ii) Marks for questions are indicated against each.
(iii) Questions No. 1 and 13 are very short-answer questions carrying 1 mark for each part. They are required to be answered in one sentence each.
(iv) Questions No. 2-5 and 14-17 are short-answer questions carrying 3 marks each.
Answers to them should normally not exceed 60 words each.
(v) Questions No. 6-9 and 18 -21 are also short-answer questions carrying 4 marks each. Answers to them should normally not exceed 70 words each.

1.Please check that this question paper contains 11 printed pages.
2. Code number given on the right hand side of the question paper should be written on the title page of the answer-book by the candidate.
3. Please check that this question paper contains 24 questions.
4. Please write down the serial number of the question before attempting it.
   Candidates must write the Code on the title page of the answer-book.
 (vi) Questions No. 10-12 and 22-24 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.
(viii) All parts of a question should be answered at one place.

                                                                                                Section A
1. Answer the following questions :
(i) Why does an economic problem arise ?
(ii) Define opportunity cost.
(iii) What does a rightward shift of production possibility curve indicate ?
(iv) Define microeconomics.                                     1×4

2. Explain the effect of increase in income of the consumer on the demand for a
good.                        3

3. State three causes of increase in supply.                          3

4. Explain the relation between marginal cost and average cost.                     3

5. Explain producer’s equilibrium with the help of a diagram.                        3
For Blind Candidates only in lieu of Q. No. 5
Explain the meaning and conditions of producer’s equilibrium.

6. A consumer buys 40 units of a good at a price of Rs. 3 per unit. When price rises to Rs. 4 per unit he buys 30 units. Calculate price elasticity of demand by the total expenditure method.                        4
OR
A consumer buys 80 units of a good at a price of Rs. 5 per unit. Suppose price elasticity of demand is (-)2. At what price will he buy 64 units ?

7. Give meaning of:
(i) production function
(ii) Supply
(iii) revenue, and
(iv) cost                                  4

8. Calculate ‘total variable cost’ and ‘total cost’ from the following cost schedule
of a firm whose fixed costs are Rs. 10. 4
Output (units) :                    1 2 3 4
Marginal cost (Rs.) :           6 5 4 6

9. At a given price there is excess demand for a good. Explain how the equilibrium
price will be reached. Use diagram.                    4
For Blind Candidates only in lieu of Q. No. 9
What is meant by ‘excess demand’ for a good ? Explain the changes which
will bring about equilibrium price.

10. Distinguish between :
(a) Individual demand and market demand.
(b) ‘Change in demand’ and ‘change in quantity demanded’                   6

11. State the phases of the law of variable proportions in terms of total physical
product. Use diagram.                     6
For Blind Candidates only in lieu of Q. No. 11
State the phases of the law of variable proportions in terms of total physical product and marginal physical product.

12. Explain the following features of perfect competition :                     6
(i) Large number of buyers and sellers
(ii) Homogeneous products
OR
Explain the following :
(i) ‘Free entry and exit’ feature of perfect competition,
(ii) ‘Differentiated products’ feature of monopolistic competition.

                                                                                                Section B
13. Answer the following questions :                      1×4
(i) Define macroeconomics.
(ii) Give two examples of macroeconomic studies.
(iii) What does balance of payments account of a country record ?
(iv) Name the items included in balance of trade account.

14. Calculate ‘private income’ from the following data :
                                                                                                         (Rs. crores)
(i) National debt interest                                                                       30
(ii) Gross national product at market price                                       400
(iii) Current transfers from government                                             20
(iv) Net indirect taxes                                                                             40
(v) Net current transfers from the rest of the world                          (-) 10
(vi) Net domestic product at factor cost accruing to government 50
(vii) Consumption of fixed capital                                                       70                      3

15. A Rs. 200 crore increase in investment leads to a rise in national income by
Rs. 1000 crores. Find out marginal propensity to consume.                                    3

16. Give meanings of :                         3
(i) involuntary unemployment
(ii) full employment, and
(iii) under employment equilibrium

17. Give three sources each of demand and supply of foreign exchange.                       3

18. Give meaning of money. Explain the ‘store of value’ function of money.                      4

19. What is ‘barter’? Explain ‘standard of deferred payment’ function of money.             4

20. Distinguish between ‘revenue receipt’ and ‘capital receipt’ and give two
examples of each.                        4

21. What is ‘fiscal deficit’ ? What are its implications ?                 4

22. Calculate national income and gross national disposable income from the following data:
                                                                                                           (Rs. crores)
(i) Current transfers by government                                                     15
(ii) Private final consumption expenditure                                          400
(iii) Net current transfers from the rest of the world                          20
(iv) Government final consumption expenditure                               100
(v) Net factor income from abroad                                                       (-) 10
(vi) Net domestic capital formation                                                       80
(vii) Consumption of fixed capital                                                          50
(viii) Net exports                                                                                        40
(ix) Net indirect taxes                                                                               60                                 4+2

23. Explain the production method of estimating national income.                                      6
OR
Explain the income method of estimating national income.

24. Explain the problem of ‘excess demand’ in an economy with the help of a
diagram. Explain the role of bank rate in cprrecting it.                                                              6
Explain the meaning of’excess demand’ and ‘deficient demand’ in an economy.
Explain the role of bank rate in correcting excess demand.