Paper : CBSE Class 12th Economics Exam Paper, 2004 (Delhi: Set - 1)

SECTION - A

Q. 1. Answer the following questions: 1x4

1. What causes a downward movement along a supply curve of a commodity?
2. Why does the problem of choice arise?
3. Under which market form, a firm is a price-taker?
4. Define fixed cost.

Q. 2. Explain the meanings of normal goods and inferior goods. 3

Q. 3. State three main features of a monopoly market. Describe any one. 3

Q. 4. At a price of Rs 8 per unit, the quantity supplied of a cornmodity is 200 units. Its price elasticity of supply is 1.5. If its price rises to Rs. 10 per unit, calculate its quantity supplied at the new price. 3

Q. 5. What does a pro possibility curve show? When will it shift to the right? 3

Q. 6. Define mark supply of a good. Give three causes of a right- ward shift of supply curve. 4

Q. 7. Explain the expenditure method of measuring price elasticity of demand of a commodity. When is the demand said to be inelastic? 4

Q. 8. From the following table, calculate average -variable cost of each given level of output:

Q. 9. Explain the relationship between total revenue and marginal revenue with the help of a revenue schedule. 4

Or

What is meant by returns to a factor? What leads to increasing returns to a factor? Explain.

Q. 10. Explain with the help of diagrams the effect of the following changes on the demand of a commodity: 6
(a) A fall in the price of substitute good.
(b) A fall in the income of its buyer.

Q. 11. Explain the meaning of increasing returns to scale and decreasing returns to scale with the help of a total physical product schedule. 6

Q. 12. If at a given price of a commodity, there is excess demand, how will the equilibrium price be reached? Explain with the help of a diagram. 6

Or

Explain with the help of a diagram the effect of a rightward shift of supply curve of a commodity on its equilibrium price and quantity

SECTION - B

Q. 13. Answer the following questions: 1x4

1. Is the study of cotton textile industry a macro-economic study or a micro-economic study?
2. What is meant by foreign exchange rate?
3. Give two examples of macro-economic studies.
4. A government budget shows a primary deficit of Rs. 4,400 crores. The revenue expenditure on interest, payment is Rs. 400 crores. How much is the fiscal deficit?

Q. 14. Calculate Gross National Disposable Income from the following data: 3

Q. 15. Distinguish between average propensity to consume and marginal propensity to consume. The value of which of these two can be greater than one and when? 3

Q. 16. What is a government budget? Name two sources each of non-tax revenue receipts and capital receipts. 3

Q. 17. In an economy marginal propensity to consume is 0.75. If investment expenditure is increased by Rs. 500 crores, calculate the total increase in income and consumption expenditures. 3

Q. 18. What is the basis of classifying government expenditure into 4
(i) revenue expenditure and capital expenditure?
(ii) plan expenditure and non-plan expenditure?

Q. 19. Explain the effect of an increase in Bank Rate on credit creation by commercial banks. 4

Q. 20. State four sources each of demand and supply of foreign exchange.

Or

State any four items each of current account and capital account of the balance of payments account.

Q. 21. Briefly explain any two functions of money. 4

Q. 22. Will the following be a part of domestic factor income of India ? Give reasons for your answer. 6
(a) Old age pension given by the Government.
(b) Factor income from abroad.
(c) Salaries to Indian residents working in Russian Embassy in India.
(d) Profits earned by a company in India , which is owned by a non-resident.

Q. 23. Explain the equilibrium level of income with the help of saving and investment curves. If savings exceed planned investment, what changes will bring about the equality between them? 6

Or

Distinguish between inflationary gap and deflationary gap. Show deflationary gap on a diagram Can this gap exist at equilibrium level of income? Explain.

Q. 24. From the following data, calculate Gross National Product At Market Price by (i) income method, and (ii) expenditure method: 3, 3