CLASS XII
ECONOMICS
ONE MARK QUESTIONS
ONE MARK QUESTIONS FROM CBSE - BOARD EXAMS FROM 2005-2012.
Q 1. Give two reasons for the problem of choice.
Ans. 1. Resources are scare 2. Resources have alternative
uses.
Q 2. Give
meaning of opportunity cost.
Ans. Opportunity cost refers to value of a factor in its next best (or second best) alternative use.
Q 3. What
does problem' for whom to produce'?
Ans. Problem of for whom to produce is
related choose the consumer of goods and
services to be produce.
Q 4. Define
marginal rate of transformation.
Ans. When some resources are remove from
production of 'Y' and employed to produce 'X' good, it the ratio of lost of output of 'Y' and gain of output of
'X'.
Q 5. Define Opportunity cost.
Ans. Opportunity cost refers to value of a
factor in its next best (or second best) alternative use.
Q 6. Define Micro economics.
Ans. When economic problems are studied considering small economic units like an individual consumer, or an individual producer.
Q 7. Define Macro economics.
Ans. Macro economics refers to the study of economic problems related to the economy as whole.
Q 8. Give two examples of Micro and Macro economics.
ANS. Macro examples: -1. Theory of consumer behaviour.2. Theory of producer behavior. 3. Theory of price.
Q 9. Define an economy.
Ans. Economy is a system spread over a particular area that reveal the nature and level of economic activities in that area. It show that how people of that area earned.
Q 10. Why
is the study of consumer equilibrium a subject matter of Micro economics?
Ans. Because
it is consumer is a single unit, so it studied under micro economics.
Q 11. Give
one reason for rightward shift of production possibility curve.
Ans. Growth of resources.
Q 12. Define utility.
Ans. Utility is a want satisfying power of a commodity.
Q 13. Give meaning of equilibrium.
Ans. Equilibrium is that situation where
there is no need to change.
Q 14. Define a budget line.
Ans. It is line showing different possible combination of good -1 and good -2, which a consumer can buy, given his budget and the prices of Good -1 and Good -2.
Q 15.
Define an indifference curve.
Ans. An indifference curve is a
diagrammatic presentation of an indifference set. It shows a combination of two goods
which a consumer is indifferent.
Q 16.
Define an indifference map.
Ans.
It refers to a set of indifference curves corresponding to different
income level to the consumer.
Q 17. Where the equilibrium will struck in case of one commodity?
Ans. Equilibrium will struck when MUx / Px = MUm.Q
18. When total utility start decline, what will be MU?
Ans. MU become negative.
Q 19. Why the budget line is negative?
Ans. The slope of budget line shows the
rate at which market price allow the consumer to substitute good -1 for good 2.
Q 20. What
is feasible or attainable combination?
Ans. A consumer can afford to buy combination that fall along his budget or inside it, it is called feasible or attainable combination.
Q 21. Define marginal utility.
Ans. It refers to additional utility on account of the consumption of an additional unit of a commodity.
Q 22. Define
demand by a consumer. Ans. Demand for commodity refers to the
desire to buy a commodity backed with sufficient purchasing
power and willingness to spend.
Q 23. When
is a good called a 'normal good' ?
Ans. When demand of a good is increased
with the increase in income of the consumer.
Q 24. what is a demand schedule.
Ans. A demand schedule is a table showing the relationship between different quantities of a commodity to be purchased at different prices of that commodity.
Q 25. When is a good called inferior good ?
Ans. A good can be inferior when income of the consumer increases and demand for the goods decreases.
Q 26.
Define individual demand schedule.
Ans. It is that table showing different
quantities of a commodity that one particular buyer in the market
is ready to buy at different
possible prices of the commodity at a point of time.
Q 27. What is meant by inferior good in economics ?
Ans. These are the goods the demand
for which decrease as
income of buyer rises.
Q 28. what is meant by Giffen good in economics ? Ans. Giffen good is that inferior good whose income effect is negative but price effect is positive.
Q 29. What cause an upward movement along a demand curve ?
Ans. Favorable change in taste and preferences, increase in income, increase in price of substitute goods.
Q 30. Give one reason for a shift in demand curve.
Ans. Increase in price of substitute goods.
Q 31. What is market demand.
Ans. Market demand is the demand of all the consumers of a commodity at given price.
Q 32. When is demand said to be price-elastic ?
Ans. When change in demand is more than change in price.
Q 33. When is the demand for a good said to be perfectly inelastic ?
Ans. When the price of a commodity changes but there is no change in quantity demanded.
Q 34. Define production function.
Ans. Production function is functional relation between physical inputs and physical output.
Q 35. Give meaning of marginal physical production.
Ans. MPP is the additional output caused by the use of an additional unit of the variable factor, other factors remaining constant.
Q 36. Define
Average production .
Ans. A P is output per unit of the
variable factor used in the process of production.
Q 37. Give meaning of 'returns to a factor'.
Ans. When some factor remains constant ,
variable factor employed with fix factor than production will
increase that is called returns to a
factor.
Q 38. Define fixed cost. Ans. Fixed factors are those factors which remains constant with the increase in the output.
Q 39. Give meaning of marginal cost.
Ans. It is addition in the Total cost when one more unit of a output is produced.
Q 40. Define variable cost.
Ans. Variable costs are those cost which
change as the level of output is changed.
Q 41.Define fixed cost .
Q 42. Define total cost.
Ans. Total cost refers to all expenses incurred by the producer to produce a given quantity of output.
Q 43. Why is average total cost greater than average variable cost.
Ans. Because it the addition of AFC and AVC.
Q 43 A . Define explicit cost.
Ans. Explicit cost is the expenses incurred by the producer for outside payments.
Q 44. Define Implicit cost.
Ans. Implicit costs are opportunity cost of self owned or self employed resources.
Q 45. What is the behavior of average fixed cost as output is decreased ?
Ans. Average fix cost will increase.
Q 46. Name the cost which does not change with change in output.
Ans. Fixed cost.
Q 47. Give
two example of fixed cost.
Ans. Salary of permanent staff and rent of
factory building.
Q 48. What
is the behavior of total variable cost, as output increase ?
Ans. Total Variable Cost will increase with
the increase in output.
Q 49. Why does average fixed cost fall with increase in output ?
Ans. Because it is calculated from fixed cost. When output increases AFC will fall. Q 50. Define marginal revenue.
Ans. Marginal revenue is the change in the total revenue on account of the sale of an additional unit of output.
Q 51. Give meaning of 'revenue' in micro-economics.
Ans.
By selling a commodity whatever money a firm receives is called revenue
in micro economics.
Q 52. What
is the shape of marginal revenue curve.
Ans. It is u shaped.
Q 53. In what manner does average revenue of a firm under perfect competition change as output increase ?
Ans. Average revenue of a firm does not change with the change in the output in perfect competition.
Q 54. in what manner does average revenue of a monopoly firm change as output increase ?
Ans. Under Monopoly firm Average revenue will decrease with the increase in output.
Q 55. What is revenue in microeconomics?
Q 56. In what manner does average revenue of a firm under monopolistic competition change as output increases? Ans. Under Monopolistic competition A R will decrease with increase output.
Q 57. What
behavior of marginal revenue in a market in which a firm can sell any quantity
of the output it produce
at a given price.
Ans. MR will remains constant.
Q 58. What is meant by producer's equilibrium ?
Ans. A producer's will be in equilibrium when
he get maximum profit.
Q 59.What
causes an upward movement along a supply curve ?
Ans. Increase in the price of a commodity.Q 60. what causes a downward movement along a supply curve?
Ans. Decrease in price of a
commodity.
Q 61. What
causes a movement along a supply curve ?
Ans. Price of the commodity.Q 62. Give meaning of supply curve ?
Ans. Supply is quantity of refers to a schedule showing various quantity of a commodity that the producers are willing to sell at different possible prices of the commodity at a point of time.
Q 63. What is 'market supply'?
Ans. Market supply of a good refers to supply by all the firms producing that good.
Q 64. what does an upward movement along a supply curve indicate?
Ans. It shows increase in price of the commodity.
Q 65. What is meant by inelastic supply of a commodity ?
Ans.
When supply of a commodity is zero elastic OR when supply does not at
all respond to change in price of the commodity.
Q 66. Give
one reason for a rightward shift in supply curve .
Ans. Technological improvement, increase in the number of firms.
Q 67. Define
supply.Ans. Supply
refers to the quantity of a commodity that a seller is willing to sell
corresponding to a given price, at
a given point of time.
Q 68. What is ' decrease' in supply ?
Ans. Decrease in supply Ans. If quantity supplied decreases due to factor other than price of the concerned commodity, it is a situation of decrease in supply.
Q 69. Give meaning of price elasticity of supply .
Ans. It the ratio of change in supply to change in its price.
Q 70. Under which market form, is a firm price-taker?
Ans. Under perfect competition.
Q 71. State any one characteristics of monopolistic competition.
Ans. Number of small firm selling differentiated product.
Q 72. Define
monopoly.
Ans. Monopoly is that market form in which
only single seller control the market.
Q 73. What can you say about the number of buyers and seller under monopolistic competition.
Q 74. Give meaning of monopolistic competition.
Ans. Monopolistic competition is that in which firms selling differentiated product.
Q 75. When is firm called price maker.
Ans. when firm has fully control over the market.
Q 76. What is price-maker firm.
Ans. Monopoly firm is price maker.
Q 77. Which market form has the leat number of producers?
Ans. Oligopoly.
Q 78. Define equilibrium price .
Ans. It is that price which is determined by demand forces and supply forces of the market.
Q 79. What is meant by equilibrium price of a commodity?
Ans. It is that price which is determined by demand forces and supply forces of the market.
Q 80. Define
capital good .
Ans. Capital goods are those good which
help to produce other goods. Like machine.
Q 81. What are stock variables?
Ans. Stock variable are those variable which measures at point of time.
Q 82.Define 'depreciation .
Ans. It is lose of fixed assets due to production of goods.
83. Define intermediate good.
Ans. Intermediate goods are those good which used to make final good.
Q 84.
Define final good. Ans. Final goods are those goods which crossed the boundary
line of production and are
ready to consume
.Q 85.
Define flow variable.
Ans. Flow variable are those variable
which measured at period of time.
Q 86.
Define consumption good .
Ans. Consumption goods are those goods
which consumed by final user of the good.
Q 87. Define domestic product.
Ans. Domestic product is the total production
of goods and services in an accounting year.
Q 88. What
is transfer payment .
Ans. Transfer payments are unilateral
transfer or one side transfer payment like old age pension, pocket
money. scholarship.
Q 89. What
is gross investment?
Ans. It sum of net investment and
depreciation.
Q 90. Give the meaning of money?
Ans. Money refers to a thing (like notes and coins) which is commonly accepted as a medium of exchange.
Q 91. Name two components of money supply. Ans. M1 and M2.
Q 92.What
are demand deposits?
Ans. Demand deposits are those deposits
which can be withdrawn from the bank on demand or by writing a
cheque any time.
Q 93. What is meant by cash reserve ratio?
Ans. CRR requires the commercial banks to
maintain certain minimum cash reserves with Central bank.
Q 94. What
is Central bank?
Ans. Central bank is an apex institution of a country that control and regulates the monetary and financial system of a country.
Q 95. What are the time deposits?
Ans. Time deposits are those deposits which are
not withdrawn with cheque.
Q 96. What
is statutory liquidity ratio?
Ans. SLR requires the commercial bank to maintained a specified percentage of total deposits in the form of liquid assets.
Q 97. Define aggregate supply?
ans. Aggregate demand is value of all the goods and services produced in an accounting year.
Q 98.
Define propensity to consume?
Ans. Propensity to consume is the ratio of
income to consumption.
Q 99. Define average propensity to consume?
Ans. APC refers to ratio between aggregate consumption and aggregate income. APC= Change in consumption / change in income.
Q 100. Define propensity to save?
Ans. It refers to the ratio of saving to income.
Q 101. Define involuntary unemployment.
Ans. Involuntary unemployment is that situation when people are ready to work but there is no employment.
Q 102.Give meaning of aggregate demand.
Ans. Aggregate demand is the total expenditure
of an economy on final goods and services in an accounting year.
Q 103. What
is ex- ante aggregate ?
Ans.
Ex-ante aggregate demand refers to desired or planned expenditure of the people
in the economy during the year.
Q 104. Give the meaning of marginal propensity to save.
Ans.
Marginal propensity to save is the ratio of change in saving to change in come.
Q 105. When
is there the equilibrium level of income?
Ans. When aggregate demand and aggregate supply are equal to each other.
Q 106. What is minimum level of multiplier?
Ans. Minimum level of multiplier is equal to 1.
Q 107. Give
meaning of excess demand.
Ans. When
aggregate demand greater than aggregate supply corresponding to full
employment.
Q 108. Give
the meaning of deficit demand.
Ans. Deficit demand refers to the situation
when AD is less than AS corresponding to full employment equilibrium.
Q 109. Give
the meaning of inflationary demand?
Ans. It is excess of aggregate demand over and above of its level of required to maintain full employment equilibrium in the economy.
Q 110. Why are borrowing treated as capital receipts?
Ans. Borrowing treated as capital receipt because they create a liability for the government.
Q 111. Why is recovery of loans treated as capital receipt?
Ans. Because it leads to reduction in assets.
Q 112. Why repayment of loan treated as capital expenditure?
Ans. Because in reduces assets.
Q 113. Why interest receipt treated as revenue receipt?
Ans. Because it do not create a liability or lead to reduction in assets.
Q 114. Why are receipt of taxes treated as revenue?
Ans. Because it do not create a liability or lead to reduction in assets.
Q 115. What is government budget.
Ans. A government budget is a statement showing estimated receipt and estimated expenditure of the government during a fiscal year.
Q 116. Give meaning of non -tax receipt of the government?
Ans. Non tax receipt are those receipt which are other than tax.
Q 117. Why
are tax receipt by the government not treated as capital receipt?
Ans. Because it do not create a liability nor reduce assets.
Q 118. Define development expenditure in the government expenditure.
Ans. Development expenditure is the expenditure on activities which are directly related to economic and social development.
Q 119. Define plan expenditure in government expenditure.
Ans. Planned expenditure is the expenditure to be incurred during the year in accordance with the plan for the year.
Q 120. Define tax.Ans. Tax is compulsory payment to the government.
Q 121. Give two example of direct taxes.Ans. Income tax and wealth tax.
Q 122. How Primary deficit calculated.
Ans. Primary deficit is equal to fiscal deficit reduced by interest payments.
Q 123. Give two example of capital receipts in a government budget.
Ans. 1. Recovery of loan 2. Borrowing.
Q 124. Name
two sources of demand for foreign exchange.
ans. 1.
Payments of international loans. 2. Investment in rest of the world.
Q 125. What
is fixed exchange rate system ?
Ans. It is that exchange rate which is decided by government authority.
Q 126. What is fixed foreign exchange rate ?
Ans. It is that exchange rate which is decided by government authority.
Q 127. Define flexible foreign exchange rate.
Ans. Flexible exchange rate is that rate which is determined by demand and supply of foreign exchange.
Q 128. State two sources of demand for foreign exchange.
Q 129. What is foreign exchange ?
Ans. Foreign exchange mean currency of a country.
Q 130. What is meant by balance of payment?
Ans. Balance of payments refers to the statement of accounts recording all economic transactions of a given country with rest of the world.
Q 131. What is the different between Value of export of goods and value of import of goods called?
Ans. Balance of trade.
Q 132. What does deficit in balance of trade account indicating?
Ans. Deficit in balance of trade occurs when: Export of goods less than import.
Q 133. When
will balance of trade show surplus?
Ans. When value of Export of goods more than import.
Q 134. List items of capital account of balance of payments.
Ans. 1. Foreign investment. 2. Loans 3. Changes in reserve of Gold and foreign exchange.
Q 135. Give meaning of balance of trade.
Ans. Balance of trade is defined as the difference between the value of imports and exports of only physical goods.
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It's helpful thank you very much....😀😀😀
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