CBSE Class 12th : Economics Model Practice Paper
Q 1) Why do central problems
arise in an economy? : 1 Marks.
Ans : Central
problems arise in an economy due to scarcity of resources having alternative
uses in relation to unlimited wants.
Q 2) What
is the general shape of the APP curve? : 1 Marks
Ans : APP curve
first rises and then falls when more units of a factor are employed.
Q 3) What
do the returns to scale refer to?
Ans : Returns to scale relates to increase in output when all the inputs are increased
in the same proportion.
Q 4) What
are volume discount? : 1 Marks
Ans : Volume
discount is the discount on price when a large quantity is purchased
Q 5) Define
monopoly. : 1 Marks
Ans : Monopoly
refers to a market situation in which there is a single seller and there is no
close substitute of the commodity sold by the monopolist.
Q 6) Explain
how scarcity and choice go together? : 3 Marks
Ans : Resources
refer to all the factors of production. Scarcity means that resources whichs.
produce goods and services are less in relation to their demand.s. Though these
resources are scarce they can be used for producing different goods. Due to
scarcity of these resources, an economy cannot produce all the goods and
services as required by its citizens. So some wants will have to remain
unfulfilled. Therefore choice has to be made which means decision-making. If the
resources were unlimited like sunshine or air then there would be no problem of
choice. So scarcity and choice is inseparable.
Q 7)What do you understand by the term Rationality in economics?
Ans : Rationality
refers to the tendency of an individual to promote his self-interest. A consumer
is rational in his behavior if he attempts to maximize his satisfaction while he
is spending money on the purchase of different goods and services. Likewise a
producer is rational, if he attempts to maximize his profits.