Arts (English Medium) Class 12 - CBSE Question Bank Solutions for Economics

Define production function.

A consumer consumes only two goods A and B and is in equilibrium. Show that when price of good B falls, demand for B rises. Answer this question with the help of utility analysis

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

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

What is government budget?

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

Define marginal propensity to consume

Calculate investment expenditure from the following data about an economy which is in equilibrium:
National income = 1000
Marginal propensity to save = 0.25
Autonomous consumption expenditure = 200

Given the price of a good, how does a consumer decide as to how much of the good to buy?

C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate

(i) Equilibrium level of National Income.

(ii) Consumption expenditure at equilibrium level of national income.

Complete the following table:-

Calculate National Income from the following data:

Find national income from the following:

Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50

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

i. Expenditure on fertilizers by a farmer.
ii. Purchase of tractor by a farmer.

Explain the distinction between autonomous and accommodating transactions in balance of payments. Also explain the concept of balance of payments 'deficit' in this context

National income is the sum of factor incomes accruing to : (Choose the correct alternative)

(a) Nationals

(b) Economic territory

(c) Residents

(d) Both residents and non-residents

Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called ______.

An economy is in equilibrium. Calculate Marginal Propensity to Consume :

National income = 1000

Autonomous consumption expenditure = 200

Investment expenditure = 100

Indian investors lend abroad. Answer the following questions :

(a) In which sub-account and on which side of the Balance of Payments Account such lending is recorded? Give reasons.

(b) Explain the impact of the lending on market exchange rate.

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