Economics Official 2023-2024 ISC (Commerce) Class 12 Question Paper Solution

If the price elasticity of demand for a commodity is 2 and the percentage change in price is 5, the percentage change in quantity demanded will be ______.

3

2.5

10

7

Assertion: An increase in public expenditure during recession can help to control the situation.

Reason: Government reduces subsidies to overcome its budget deficit.

Both Assertion and Reason are true and Reason is the correct explanation of Assertion.

Both Assertion and Reason are true, but Reason is not the correct explanation of Assertion.

Assertion is true but Reason is false.

Assertion is false but Reason is true.

At the point of inflexion, ______ is maximum.

total product

total cost

average product

marginal product

In which one of the following types of markets are Average Revenue curve and Market Demand curve the same?

Monopoly

Oligopoly

Perfect Competition

Monopolistic Competition

The diagram given below shows the change in price of cotton shirts. Which one of the following causes the equilibrium price to move from P₁ to P₂?

Increase in excise duty on raw cotton.

Expected fall in future price of cotton shirts.

Fall in the price of synthetic shirts.

Increase in wage rate.

Refer to the diagram given below and choose the incorrect statement.

E is the equilibrium point.

The diagram shows a situation of normal profit.

C is the shut down point.

E is the break even point.

Government of India purchased Raffle aircrafts from France in recent times.

Which one of the following market forms is applicable for this product in India?

Monopsony

Monopoly

Oligopoly

Monopolistic Competition

Revenue receipts in the government's budget:

create liability

reduce liability and create assets

reduce assets

keep liability and assets unaltered

If S > I, it will lead to ______.

Excess demand

Deficient demand

Notional demand

Actual demand

An increase in the number of firms in the market causes a rightward shift in the market supply curve, but the individual supply curve may shift leftward. Justify the statement.

State whether the following is True or False. Give a reason for your answer.

TVC is an avoidable cost.

True

False

Mention any one difference between Induced investment and Autonomous investment.

Why is the demand curve for foreign exchange negatively sloped?

Mention any one difference between Balance of Trade and Balance of Payment.

How is APS obtained from the APC?

With reference to Simple Keynesian model, give the meaning of ex-ante demand.

Milk is used for making curd, sweets and chocolates.

What type of demand does milk have? Give a reason.

Figures (A), (B) and (C) given below represent different types of Demand curves.

(A)	(B)	(C)

What kind of goods do each of these Demand curves represent? Give a reason for each of the curves.

A huge production of onions and lack of storage facilities have caused a continuous fall in its price. This may adversely affect the production of onions in the subsequent year. With the help of a diagram, briefly explain the measures that the government should adopt to combat this situation.

Draw Average Fixed Cost curve.

Explain Average Fixed Cost curve.

With the help of a diagram, explain the relationship between Average Product and Total Product under the Law of Variable Proportions.

Explain the implication of ‘freedom of entry and exit to the firms’ under perfect competition. 

Per unit price of electricity is higher in the Commercial sector as compared to the Domestic sector. Identify and briefly describe this phenomenon. Name the market in which it is applicable.

Briefly discuss the importance of Selling Cost under oligopoly market.

There are many manufacturers of pencils on the market who produce pencils in different designs and colours to attract children. Which market form is referred to here? Briefly explain the features of this market form indicated in the given situation.

What is meant by autonomous consumption expenditure? Show it on a diagram.

When National Income rises from ₹ 600 Cr. to ₹ 1000 Cr., the consumption expenditure increases from ₹ 500 Cr. to ₹ 800 Cr. Calculate MPC and hence the value of Investment Multiplier.

A large amount of fiscal deficit proves to be counter productive. Give any two reasons in support of this statement.

What is meant by no quid pro quo of a tax?

Name any two direct taxes.

Categorise the following item into Current Account or Capital Account of Balance of Payment of India.

Acquisition of land in India by an American firm

Categorise the following item into Current Account or Capital Account of Balance of Payment of India.

Use of transport by Indian tourists in Dubai

Categorise the following item into Current Account or Capital Account of Balance of Payment of India.

Dividend paid to foreigners on their investment in shares in India.

Categorise the following item into Current Account or Capital Account of Balance of Payment of India.

Loan taken by India from International Monetary Fund (IMF) to cover its BOP deficit

Briefly explain the effect of the following on the Balance of Payment of a country.

Inflationary pressure in the economy

Briefly explain the effect of the following on the Balance of Payment of a country.

Appreciation in the domestic exchange rate.

Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?

Export of cotton garments by India to the USA

Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?

Export of technical knowledge by the USA to India

Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?

Import of wheat by India from the USA

Suppose the exchange rate was \[\ce{$}\]1 = ₹ 80 and later changed to \[\ce{$}\]1 = ₹ 92. What will be its effect on the following?

Import of gold jewellery by the USA from India

Briefly discuss the fixed exchange rate system of determining foreign exchange rate.

Draw a well labelled diagram and explain the circular flow of income in a four-sector model.

How is Total Revenue under perfect competition different from Total Revenue under imperfect competition? Give two points to show the difference.

Show with the help of a diagram, how a perfectly competitive firm earns a normal profit in short-run equilibrium.

Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.

Elasticity of demand is equal to zero

Draw a straight-line demand curve joining both the axes. Indicate the following on the demand curve.

Elasticity of demand is greater than one

Observe the graph given below and answer the question that follow.

1. Give a reason to explain if the graph shown above can be a common phenomenon or not.  [2]
2. What is an indifference map? Draw its diagram.  [2]
3. State any two differences between cardinal utility and ordinal utility.   [2]

Give two differences between intended supply and actual supply.

Refer to the diagram given below and answer the questions that follow.

1. What does the line AB represent? Why is the line AB negatively sloped? (2)
2. At which one of the given points, D, E and F, will the consumer attain equilibrium? Explain. (2)
3. Briefly explain why the consumer is not in equilibrium at the other two points. (2)

State whether the following items will be included in the estimation of National Income or not: Give a reason for your answer.

Government expenditure on street lighting.

State whether the following items will be included in the estimation of National Income or not: Give a reason for your answer.

Profit earned by State Bank of India in a foreign country.

Calculate GNP_MP and NNP_Fc from the following data by Expenditure Method.

State whether the following items will be included in the estimation of National Income or not? Give a reason for your answer.

Fresh tomatoes used by a food processing company.

State whether the following items will be included in the estimation of National Income or not? Give a reason for your answer.

Fresh tomatoes used by a food processing company.

State whether the following items will be included in the estimation of National Income or not? Give a reason for your answer.

Wooden cupboard purchased by a family.

Calculate National Income using Income method and Output method.

Read the passage given below and answer the questions that follow.

1. Which function of the central bank is hinted at in the passage given above?  (1)
2. In which situation does central bank adopt the measure given in the above passage? (1)
3. Explain any two monetary measures that can be used to accomplish a similar objective, other than the one given in the above passage. (4)
4. Differentiate between Reserve Bank of India and Commercial banks by giving any two points. (2)