Economics All India Set 1 2014-2015 Commerce (English Medium) Class 12 Question Paper Solution

Define an indifference curve.

If due to fall in the price of good X, demand for good Y rises, the two goods are : (Choose the correct alternative)

a. Substitutes
b. Complements
c. Not related
d. Competitive

If Marginal Rate of Substitution is increasing throughout, the Indifference Curve will be: (Choose the correct alternative)

a. Downward sloping convex
b. Downward sloping concave
c. Downward sloping straight line
d. Upward sloping convex

Giving reason comment on the shape of Production Possibilities curve based on the following schedule :

What is likely to be the impact of "Make in India" appeal to the foreign investors by the Prime Minister of India, on the production possibilities frontier of India? Explain

What is likely to be the impact of efforts towards reducing unemployment on the production potential of the economy? Explain

The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?

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

Homogeneous products.

What is maximum price ceiling? Explain its implications.

A consumer spends Rs 1,000 on a good priced at Rs10 per unit. When its price falls by 20 percent, the consumer spends Rs800 on the good. Calculate the price elasticity of demand by the Percentage method

What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced?

Define Average Revenue. Show that Average Revenue and Price are same.

A consumer consumes only two goods X and Y, both priced at Rs 2 per unit. If the consumer chooses a combination of the two goods with Marginal Rate of Substitution equal to 2, is the consumer in equilibrium? Why or why not? What will a rational consumer do in this situation? Explain.

A consumer consumes only two goods X and Y whose prices are Rs 5 and Rs 4 respectively. If the consumer chooses a combination of the two goods with marginal utility of X equal to 4 and that of Y equal to 5, is the consumer in equilibrium? Why or why not? What will a rational consumer do in this situation? Use utility analysis

State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour

Explain why will a producer not be in equilibrium if the conditions of equilibrium are not met.

A market for a good is in equilibrium. The supply of good "decreases". Explain the chain of effects of this change

What is aggregate demand?

If MPC = 1, the value of the multiplier is ______

0

1

Between 0 and 1

Infinity

Primary deficit in a government budget is : (Choose the correct alternative)

a. Revenue expenditure - Revenue receipts
b. Total expenditure - Total receipts
c. Revenue deficit - Interest payments
d. Fiscal deficit - Interest payments

A direct tax is called direct because it is collected directly from ______.

The producers on goods produced

The sellers on goods sold

The buyers of goods

The income earners

Other things remaining the same, when in a country the market price of the foreign currency falls, national income is likely (Choose the correct alternative)

a. to rise
b. to fall
c. to rise or to fall
d. to remain unaffected

If the Real GDP is Rs400 and Nominal GDP is Rs450, calculate the Price Index (base = 100).

What are fixed and flexible exchange rates?

Give meaning of managed floating exchange rate.

Where is 'borrowings from abroad' recorded in the Balance of Payments Accounts? Give reasons.

Explain bankers bank function of a Central bank.

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

Currency is issued by the central bank, yet we say that commercial banks create money. Explain. How is this money creation by commercial banks likely to affect the national income? Explain

An economy is in equilibrium. Calculate the Investment Expenditure from the following
National Income = 800
Marginal propensity to save = 0.3
Autonomous Consumption = 100

Giving reason explain how the following should be treated in the estimation of national income:

Payment of interest by a firm to a bank

Giving reason explain how the following should be treated in the estimation of national income:

Payment of interest by a bank to an individual

Giving reason explain how the following should be treated in the estimation of national income:

Payment of interest by an individual to a bank

Explain the concept of 'deficient demand' in macroeconomics.

explain the role of Bank Rate in correcting deficient demand?

What is 'excess demand'?

Explain the role of 'Reverse Repo Rate' in removing it.

Answer the following question.
Explain how the government can use the budgetary policy in reducing inequalities in incomes.

Calculation (a) Net National Product at market price, and (b) Gross Domestic Product at factor cost:

Calculate the 'National Income' and 'Private Income' :