CBSE Board Class 12 Economics Sample Papers 2011

Sample Question Paper 
Economics
Class – XII
Time – 3 Hours. Maximum marks – 100
Instructions
1. All questions in both the sections are compulsory.
2. Marks for questions are indicated against each.
3. Question 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.
4. Question Nos. 6-10 and 22-26 are short-answer questions carrying 3 marks each. Answer
to them should not normally exceed 60 words each.
5. Question Nos. 11-13 and 27-29 are also short-answer questions carrying 4 marks each.
Answer to them should not normally exceed 70 words each.
6. Question Nos. 14-16 and 30-32 are long-answer questions carrying 6 marks each. Answer
to them should not normally exceed 100 words each.
7. Answer should be brief and to the point and the above word limit be adhered to as far as
possible.

                  Section A
1. What causes an upward movement along a demand curve of a commodity ? (1)

2. What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75°?(1)

3. What change will take place in marginal product, when total product increases at a diminishing rate?(1)

4. Give the meaning of marginal cost. (1)

5. Give the meaning of ‘oligopoly’. (1)

6. Explain the inverse relationship between the price of a commodity and its demand.(3)

7. State the ‘law of supply’. What is meant by the assumption ‘other things remaining the same’ on which the law is based? (3)

8. The  price  elasticity of supply of  good X is half the  price  elasticity of supply of  Good Y. A 10% rise in the price of good Y results in a rise in its supply from 400 units to 520 units. Calculate the percentage change in quantity supplied of good X when its price falls from Rs 10 to Rs 8 per unit.(3)

9. State the distinction between explicit cost and implicit cost. Give an example of each.(3)

10. Explain the implication of ‘product differentiation’  feature of  monopolistic competition.
OR
Explain the implication of ‘homogenous product’ feature of perfect competition. (3)

11. Explain the effect of a rise in the prices of ‘related goods’ on the demand for a good X.

12. Explain the concept of opportunity cost with the help of an example.
OR
Explain the central problem of distribution in an economy.(4)

13. Explain the likely behaviour of Total Product and Marginal Product when  for increasing production only one input is increased while all other inputs are kept constant.(6)

14. There is a simultaneous ‘decrease’ in demand and supply of a commodity. When will it result in:(6)
(a) No change in equilibrium price.
(b) A fall in equilibrium price.

15. (a)  What is a budget line? What does the point on it indicate in terms of prices?
(b) A consumer consumes only two goods X and Y. Her money income is Rs 24 and the prices of Goods X and Y are Rs 4 and Rs 2 respectively. Answer the following questions:
(i)   Can the consumer afford a bundle 4X and 5Y? Explain
(ii)   What will be the MRSXY when the consumer is in equilibrium? Explain.
OR
Explain the following:
(a) Why is an indifference curve convex to the origin?
(b) Why does a higher indifference curve represent a higher level of satisfaction? (6)
                                                 Section B
16. What is meant by foreign exchange rate? (1)

17. What is meant by Statutory Liquidity Ratio? (1)

18. How is primary deficit calculated? (1)

19. What is meant by balance of trade? (1)

20. State two sources of supply of foreign currency. (1)

21. Can an economy be in equilibrium when there is  unemployment in the economy. Explain.(3)

22. In an economy income increases by 10,000 as a result of a rise in investment expenditure by 1,000. Calculate:(3)
(a) Investment Multiplier
(b) Marginal Propensity to Consume

23. How does money solve the problem of double coincidence of wants? (3)

24. How can budgetary policy be used for reducing inequalities in income and wealth?
OR
How can budgetary policy be used for allocation of resources in the economy? (3)

25. Calculate gross fixed capital formation from the following data: (3)
Rs crores
(i)    Private final consumption expenditure 1,000
(ii)   Government final consumption expenditure 500
(iii)  Net exports (-) 50
(iv)  Net factor income from abroad 20
(v)   Gross domestic product at market price 2,500
(vi)  Opening stock 300
(vii) Closing stock 200

26. Distinguish between revenue expenditure and capital expenditure in a government budget.  Give two examples of each.(4)

27. Explain the function of a Central Bank as a banker to the government.
OR
Explain the open market operations method of credit control used by a Central Bank: (4)

28. Explain the meaning of deficit in Balance of Payments. (4)

29. State whether the following statements are true or false. Give reasons for your
answer:
(a) Capital formation is a flow.
(b) Bread is always a consumer good.
(c) Nominal GDP can never be less than Real GDP.
(d) Gross domestic capital formation is always greater than gross fixed capital formation.(6)

30. Given below is the consumption function in an economy:
C = 100 + 0.5Y
With the help of a numerical example show that in this economy as income increases APC will decrease.(6)

OR
The savings function of an economy is S =  - 200 + 0.25Y. The economy is in
equilibrium when income is equal to 2,000. Calculate:
(a) Investment expenditure at equilibrium level of income.
(b) Autonomous consumption.
(c) Investment multiplier.