CBSE Class 12th : Economics Model Practice Paper
two central problems facing an economy.
1) What to produce
2) How to produce
Q.2 Define the term
Ans: Utility is the satisfaction
derived from the consumption of a good.
do you men by demand schedule?
schedule refers to a tabular statement containing different quantities of a
commodity that would be demanded at different prices
Q.4 What is a cartel?
A cartel is a
business combination under which firm coordinates their output and pricing
Q.5 What are the characteristics of PPC?
Possibility Curve has two basic properties: -
(1) It slopes downwards.
Production possibility curve slopes downwards from left to
right. It is because in a situation of full employment of the resources
production of one good can be increased by decreasing the production of other
good only. More of one good will means less of the other. So it has downward
(2) It is concave to the origin.
Production Possibility Curve is concave to the origin which shows the operation
of the law of increasing marginal opportunity cost. Opportunity cost of
producing cloth is the quantity of wheat, which may be sacrificed. As the
shifting of resources is done from one good to another good the rate of
sacrifice increases and it leads to the fact that PPC is concave to the origin
Q.6 What is budget
line? Give an example.
The budget line
represents all the commodities which a consumer can purchase with his entire
money income. Let us have two commodities x and y their respective prices are Rs
P1 and Rs P2 the consumer entire income is Rs 100. Then,
the budget line can be written as follows:
+ P2Y =100