Economics Foreign Set 1 2015-2016 Commerce (English Medium) Class 12 Question Paper Solution

A producer borrows money to run a business but manages the business himself. Identify implicit cost.

A firm is able to sell more quantity of a good only by lowering the price. The firm’s marginal revenue, as he goes on selling, would be :(Choose the correct alternative)

a. Greater than average revenue

b. Less than average revenue

c. Equal to average revenue

d. Zero

When does ‘decrease’ in demand take place?

‘A few big sellers’ is a characteristics of : (choose the correct alternative)

a. Perfect competition

b. Monopolistic competition

c. Oligopoly

d. None of the above

Marginal revenue of a firm is constant throughout under : (choose the correct alternative)

a. Perfect competition

b. Monopolistic competition

c. Oligopoly

d. All the above

consumer consumes only two goods X and Y. The Marginal Rate of Substitution is 1. Prices of X and Y are Rs 3 and Rs 4 per unit respectively. Is the consumer in equilibrium? What will be further reaction of the consumer? Give reason.

Price elasticity of demand for the two goods X and Y are zero and (–) 1 respectively. Which of the two is more elastic and why?

What is minimum price ceiling? Explain its implications.

Market of a commodity is in equilibrium. Demand for the commodity "increases." Explain the chain of effects of this change till the market again reaches equilibrium. Use diagram.

What happens to the demand of a good when consumer's income changes? Explain

What type of production function is this in which only one input is increased and others kept constant? State the behaviour of total product in this production function.

Define cost. State the behaviour of (a) Total Fixed Cost and (b) Total Variable Cost as output is increased.

What is perfectly elastic supply?

When price falls by Rs 2 per unit, supply falls from 100 units to 80 units. Price elasticity of supply is 2. What was the price per unit before change?Calculate.

Explain the concepts of Opportunity Cost and Marginal Rate of Transformation using a production possibility schedule based on the assumption that no resource is equally efficient in production of all goods.

A consumer consumes only two goods. Explain consumer's equilibrium with the help of utility analysis.

Explain the difference between “Shift of Supply Curve” and “Movement along Supply Curve”. State one factor responsible for each. Use diagrams.

Explain the implications of the following : Product differentiation in monopolistic competition.

Explain the implications of the following : Perfect knowledge in perfect competition.

Answer the following question.
Why are the firms said to be interdependent in an oligopoly market? Explain.

Explain the implications of the following in a perfectly competitive market :

Large number of sellers

Define Gross Investment.

Unforseen obsolescence of fixed capital assets during production is: (Choose the correct alternative)

a. Consumption of fixed capital

b. Capital loss

c. Income loss

d. None of the above

What is primary deficit?

Disinvestment by government means: (choose the correct alternative)

a. Selling of its fixed capital assets

b. Selling of shares of public enterprises held by it.

c. Selling of its buildings

d. All the above

Balance of Payments ‘deficit’ is the excess of: (choose the correct alternative)

a. Current account payments over current account receipts.

b. Capital account payments over capital account receipts.

c. Autonomous payments over autonomous receipts.

d. Accommodating payments over a accommodating receipts.

Given real income to be 400 and price index be 100, calculate nominal income.

Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.

Explain how government spending can be helpful in removing deficient demand.

Find equilibrium national income:

Autonomous consumption expenditure = 120

Marginal propensity to consume = 0.9

Investment expenditure = 1100

Government spends on child immunization programme. Analyse its impact on Gross Domestic Product and welfare of the people.

Explain the ‘unit of accounts’ function of money. How has it solved the related problem created by barter?

Explain the 'standard of deferred payment' function of money. How has it solved the related problem created by barter?

Explain the ‘bank of issue’ function of central bank.

What are revenue receipts in a government budget?

Explain the role of government budget in bringing stability in the economy.

What is government budget?

Explain the role of Government budget in allocation of resources.

Derive the two alternative conditions of expressing national income equilibrium. Show these equilibrium conditions on a single diagram.

Indian investors borrow from abroad. Answer the following:

a. In which sub-account and on which side of the Balance of Payments Account will this borrowing be recorded? Give reason.

b. Explain what is the impact of this borrowing on exchange rate.

Calculate Net Domestic Product at Factor Cost and Private Income: