Home » Commerce » Sample Paper of Economics 2014 for class 12, CBSE. Paper No.2

Sample Paper of Economics 2014 for class 12, CBSE. Paper No.2

Sample Paper – 2010

Class – XII

Subject – Economics




  1. Define marginal revenue.                                                                                [1]
  2. When APP is at its maximum, what is the relation between MPP and APP?[1]
  3. Define producer’s equilibrium.                                                                       [1]
  4. A fall in price of a good results in decrease in expenditure on it. What is its elasticity of demand?                                                                                     [1]
  5. What do returns to scale refer to?                                                                   [1]
  6. Explain the central problem of ‘for whom to produce’ with the help of an example.                                                                                                            [3]
  7. Given below is the utility schedule of a consumer for commodity X. The price

Of the commodity is Rs. 3 per unit. How many units should the consumer purchase to maximize satisfaction? (Assume that utility is expressed in utils and 1 util= Re.1) Give reasons for your answer.

Consumption                         Total Utility               

                 ( units)                                    ( utils)                                             [3]

  • 8
  • 15
  • 20
  • 23
  • 25


  1. How does a change in the price of inputs affect the supply curve of a commodity?

Explain.                                                                                                           [3]

  1. State the ‘law of demand’ What is meant by the assumption ‘other things

remaining the same’ on which the law is based?                                            [3]


  1. What will be the price elasticity of supply if the supply curve is a positively

sloped straight line?                                                                                        [3]


  1. Explain the relationship between average variable cost and marginal cost with the

help of a diagram? Can AC fall when MC is rising?                                      [3]


  1. 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
MC (Rs.) 6 5 4 6


  1. Under perfect competition the seller is a price taker, under monopoly he is a price

maker. Explain.                                                                                                 [4]


  1. Distinguish between: a) normal goods and inferior goods with

examples,   b) substitute goods and complementary goods with examples.


  1. c) When price of a good falls by 10 percent, its quantity demanded rises

from 40 to 50 units. Calculate price elasticity of demand by percentage method.                                                                                                                                       [2,2,2]

  1. How is the equilibrium price of a good determined? Explain with the help of a diagram a situation when both demand and supply curves shift to the right but equilibrium price remains the same.                                     [6]


  1. Using a suitable diagram and illustration explain the three stages of production when one factor input is variable. [6]




  1. When does a situation of deficient demand arise in an economy? [1]
  2. If MPC and MPS are equal, what is the value of multiplier? [1]


  1. A government budget shows a primary deficit of Rs.4, 400 crores. The revenue expenditure on interest payment is Rs. 400 cr. How much is fiscal deficit? [1]


  1. Define foreign exchange rate. [1]


  1. What is consumption function? [1]


  1. What is the nature of transactions that are recorded in current account of the

Balance of Payments account? Is import of machinery recorded in current

account or capital account?                                                                              [3]


  1. Can there be a fiscal deficit in a government budget without a revenue deficit?

Explain.                                                                                                           [3]


  1. Explain the basis of classifying government receipts into revenue receipts

and capital receipts. Give two examples of each.                                           [3]

  1. List three sources each of demand and supply of foreign exchange. [3]


State 3 merits of a flexible exchange rate system

  1. From the following data calculate net value added at factor cost:

Rs. In crores

(i) Sales                                                                                          500

(ii) Opening stock                                                                             30

(iii) Closing stock                                                                               20

(iv) Purchase of intermediate products                                            300

(v)  Purchase of machinery                                                              150

(vi) Subsidy                                                                                        40

(vii) Depreciation                                                                                20             [3]


  1. Explain the ‘bankers bank’ and ‘supervisor’ function of Central bank. [4]
  2. Explain the ‘medium of exchange’ and ‘standard of deferred payments’

function of money.                                                                                          [4]


  1. Explain and graphically represent the concept of inflationary gap. Explain

any one measure of removing this gap.                                                           [4]

  1. Will the following be included in domestic factor income of India?

Give reasons in support of your answer.

  1. Rent received by a resident Indian from his property in Malaysia.
  2. Profits earned by a branch of a foreign bank in India.
  3. Salaries received by Indian residents working in American embassy in India.
  4. Purchase of new shares of a domestic firm. [6]
  5. Explain the meaning of equilibrium level of income and output with the help of saving and investment curves. If planned expenditure is less than planned output, what changes will take place in the economy?                                                 [6]
  6. Calculate Net Domestic Product at factor cost and Personal Income from the following data:                                                                                     [3+3]

Rs. Crores

  1. Change in stock   5
  2. Personal taxes   40
  3. Private final consumption expenditure 480
  4. Net Indirect taxes   40
  5. Savings of non-departmental enterprises   15
  6. Net current transfers from rest of the world        (-)   10
  7. Net domestic fixed capital formation   70
  8. Net factor income from abroad   10
  9. Undistributed profits     5
  10. Current transfers from government   20
  11. Corporation tax   25
  12. National debt interest   30
  13. Net Exports        (-)   30
  14. Government final consumption expenditure 100
  15. Income from property and entrepreneurship accruing to

Government administrative departments                                                    20




Paper Submitted by: SAHIL.K.MAHAJAN

Email : mahajan09091988@yahoo.co.in

Mob No. : 9888988024



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