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

What is the relation between marginal cost and average variable cost when marginal cost is rising and average variable cost is falling?

Suppose total revenue is rising at a constant rate as more units of a commodity are sold, marginal revenue would be:

(a) Greater than average revenue

(b) Equal to average revenue

(c) Less than average revenue

(d) Rising

When does ‘increase’ in demand take place?

Homogenous product’ is a characteristic of : (choose the correct alternative)

(a) Perfect competition only

(b) Perfect oligopoly only

(c) Both (a) and (b)

(d) None of the above

There is inverse relation between price and demand for the product of a firm under:

(choose the correct alternative)

(a) Monopoly only

(b) Monopolistic competition only

(c) Both under monopoly and monopolistic competition

(d) Perfect competition only

A Consumer consumes only two goods X and Y. Marginal utilities of X and Y is 4 and 5 respectively. The prices of X and Y are Rs 4 per unit and Rs 5 per unit respectively. Is the consumer in equilibrium? What will be the further reaction of the consumer? Explain.

Price elasticity of demand of goods X is -2 and goods Y is -3. Which of the two goods is more price elastic and why?

What is maximum price ceiling? Explain its implications.

Explain the chain effects, if the prevailing market price is below the equilibrium price.

Explain the effect of change in prices of the related goods on demand for the given good.

Define production function.

Distinguish between short run and long run production functions

Define cost.

Distinguish between fixed and variable costs. Give one example of each.

A producer supplies 80 units of a good at a price of Rs 10 per unit. Price elasticity of supply is 4. How much will he supply at Rs 9 per unit?

Assuming that no resource is equally efficient in production of all goods, name the curve which shows production potential of the economy. Explain, giving reasons, its properties.

Explain the conditions of consumer’s equilibrium using indifference curve analysis.

Explain the distinction between “change in quantity supplied’ and “change in supply”. Use diagram.

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

Large number of buyers

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

Freedom of entry and exit to firms

Explain the implications of the following in an oligopoly market:

Inter- dependence between firms

Explain the implications of the following in an oligopoly market:

Non-price competition

Define stocks.

Depreciation of fixed capital assets refers to :

(a) Normal wear and tear

(b) Foreseen obsolescence

(c) Normal wear and tear and foreseen obsolescence

(d) Unforeseen obsolescence.

What is revenue expenditure?

Fiscal deficit equals :

(a) Interest payments

(b) Borrowings

(c) Interest payments less borrowing

(d) Borrowing less interest payments

Foreign exchange transactions dependent on other foreign exchange transactions are called ______.

Current account transactions

Capital account transactions

Autonomous transactions

Accommodating transactions

Find net value added at factor cost:

                                                                                        (Rs lakh)

(i) Durable use producer goods with a life span of 10 years       10

(ii) Single use producer goods                                                  5

iii) Sale                                                                                 20

(iv) Unsold output produced during the year                              2

(v) Taxes on production                                                           1

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

Explain the role of taxation in reducing excess demand.

In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.

Government insure expenditure to popularize yoga among the masses. Analyses its impact on gross domestic product and welfare of the people.

Explain the ‘store of value’ function of money. How has solved the related problem created by barter?

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

Explain how open market operations are helpful in controlling credit creation.

What is government budget?

Explain how taxes and subsides can be used to influence allocation of resources.

Explain how government budget can used to bring in price stability in the economy.

What are revenue receipts in a government budget?

Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.

(a) In which sub-account and on which side of balance of payments account will foreign investments in India be recorded? Given reasons.

(b)What will be the effect of foreign investments in India on exchange rate? Explain.

Find national income and private income:

                                                                                                            (Rs crore)

(i) Wages and salaries                                                                               1,000

(ii) Net current transfer to abroad                                                                   20

(iii) Net factor income paid to abroad                                                              10

(iv) Profit                                                                                                    400

(v) National debt interest                                                                              120

(vi) Social security contributions by employers                                               100

(vii) Current transfers from government                                                         60

(viii) National income accruing to government                                                150

(ix) Rent                                                                                                     200

(x) Interest                                                                                                 300

(xi) Royalty                                                                                                  50