Model test paper economics 2015 -16

Model test paper economics 2015 -16

Time 3hrs                                                     Class XII                                        MM 100

General Instructions :

i)       All questions in are compulsory.

ii)     Marks for questions are indicated against each.

iii)    Questions No. 1-5 and 16-20 are very short answer questions (MCQs) carrying, 1 mark each.

iv)    Questions No. 6-8, 21-23 are short-answer questions carrying, 3 marks each. Answers to them should normally not exceed 60 words each.

v)     Questions No. 9-11and 24-26 are also short-answer question & carrying 4 marks each. Answers to them should normally not exceed 70 words each.

vi)    Questions No.12-14 and 27-29 are long-answer questions carrying 6 marks each. Answers to them should not exceed 100 words each.

vii)  Answers should be brief and to the point and the above word limits should be adhered to as far as possible.

Part - A

1. Total utility is maximum when :-

(a)  M.U. is zero.   (b) M.U.is at its highest point?  ( c ) M.U.is equal to T.U. (d) M.U. IS maximum.   (1)

2.  What will happen if  price of commodity falls:-

(a)  Consumer’s real income increases        (b) Consumer’s real income decreases

(c ) No change in the real income of the consumer         (d) None of them.                  (1)

3. Which one of the following cost curves is never  ‘U’ shaped?

     (a) Average cost curve                     (b) Marginal Cost Curve   

    (C) Average variable cost curve       (d) Average fixed cost curve.                       (1)

4. Elasticity of supply is zero means: -

   (a) Perfectly elastic supply.     (b) Perfectly inelastic supply  

(c)    Imperfectly elastic supply   (d) none of them                      (1)

5. Define market equilibrium.                                                                                                                            1.

6.  What is the implication of feature of free entry and exit of firms under perfect competition?       (3)

7.  What is the shape of demand curve under monopoly, explain with the help of a diagram.         (3)

8.  A consumer want to consume two commodities, the prices of the commodities are Rs.4 and Rs 5 respectively. The consumer’s income is Rs. 20.

(i) How much quantity of good one can a consumer consume if he spends his entire?

(ii) Write down the equation of the budget line.

(iii) What is slop of the price line?                                                                                                           (3)

                            OR

Why is an indifference curve generally convex to the origin?

9. Why does the demand curve slope downward from left to right? Explain any four points.    (4)

10. Explain the effect the following on supply of a good: -

 (i) Change in the price of inputs

(ii) Technological advancement.                                                                                                             (4)

11. Explain the relationship between AC, AVC and MC with the help of a diagram.                    (4)

12. Explain the concept of time horizons and supply curves.                                                            (6)

13. Explain the following: -

(i) Why do indifference curves not intersect each other?

(ii) Explain that higher indifference curve provide higher level of satisfaction.                     3x2 = 6

14. Explain the following: -

     (i) What does increasing marginal opportunity cost along a PPC mean?

    (ii) Draw a production possibility curve and show under utilization and growth of resources.

                                                                                                                                                            3x2= 6

15. Differentiate between Collusive Oligopoly and Non Collusive oligopoly.      

                                                      OR

     Market for a good is in equilibrium, there is simultaneous decrease in both demand and supply, explain its effect on market.                                                                                                                    (6)     

Part – B

16. Narrow money refers to: -

      (a) M1                 (b) M 2                (c) M 3              (d) M 4                                     (1)

17. Payment of interest is : -

      (a) Revenue expenditure                (b) Capital Expenditure  

  (c) Primary deficit                            (d) Fiscal deficit                                   (1)

18. In order to encourage investment in the economy, the RBI may : -

     (a) Reduce CRR           (b) Increase CRR        (c) Increase Bank rate

      (d) Sell securities in the open market                                                    (1)

19. A government shows a Primary deficit of Rs 4400 crores, the revenue expenditure on interest payment is Rs 400 crores. How much is the fiscal deficit.                      

(a)Rs 4000 crores         (b)Rs. 4400 crores         (c) Rs.4800 crores    (d)  - Rs. 400 crores.  (1)

20. What is Repo Rate?                   (1)

21. Differentiate between final goods and intermediate goods.                  

                                             OR

     Differentiate between Producer goods and Capital Goods.                                              (3)

22. Can the value of APS be negative? If yes when?                                                                (3)

23. Explain the concept of under employment equilibrium with the help of a diagram? Show on the same diagram the additional investment expenditure required to reach full employment equilibrium?                                                                                                                                  (3)    

24.  Explain the ‘economic stability’ objective of govt. budget.                                          (3)

25.  Define Primary deficit. Explain implications of zero Primary deficits.                            (3)

26.  Why does demand for foreign exchange rise when it price falls.                                (3)     

27. What do you mean by current account and what are its components?                   

                                                            OR

          What do you mean by capital account and what is its component?                     (4)

28. Explain ‘lender of last resort’ and Banker’s bank function of central bank.6

29. Will the following be included in the calculation of National Income or Not : -

       (i) Payment of interest on borrowing by general government.

      (ii) Salaries received by the Indian employee working in American embassy.

(iv)              Salaries paid to Russian working in Indian embassy in India.                                         3x2= 6

30. From the following data calculate (a) Personal Disposable Income (b) National Income

Sr. No.	Particulars	Rs. In Crores
1	Private Income	3000
2	Compensation of employees	800
3.	Mixed Income of self employed	900
4.	Net Factor income from Abroad	-50
5.	Net retained earning of Private enterprises	600
6.	Rent	350
7.	Profit	600
8.	Consumption of Fixed Capital	200
9.	Direct taxes paid by Household	300
10.	Corporate tax	350
11.	Net indirect taxed	250
12.	Net Export	-70
13.	Interest	3000

MARKING SCHEME FOR SAMPLE QUESTION PAPER

CLASS XII ECONOMICS

SAMPLE QUESTION PAPER

ECONOMICS

CLASS-XII

Time allowed: 3 Hrs                                                                                                                    M.M .100

Part - A

1.  (a)     1  mark

2.  (a)   1    Mark

3.  (d)    1  Mark

    4. (b) (1) Mark.

5. Market equilibrium that where market demand and supply are equal and there is no need to change.(1)

6.  What is the implication of feature of free entry and exit of firms under perfect competition?   (3)

Ans. This ensures that no firm can earn above normal profit in the long each firm just earn normal profit.

i.e. minimum necessary to carry on business.

If some firm get abnormal profit other firms enter the industry, Supply increases, price decreases and abnormal profit vanished.                                   

And  vise versa                   1+1+1 = 3

7.  What is the shape of demand curve with the help of a diagram?

Ans.  1. Single seller and no close substitute

            2. Firm has full freedom and power to fix price

3. But demand of a firm is not in the control of the firm, in order to increase in sale , firm has to reduce price.

                                  1+1+1+= 3

8.  A consumer want to consume two commodities, the prices of the commodities are Rs.4 and Rs 5 respectively. The consumer’s income is Rs. 20.

(i) How much quantity of good one can a consumer consume if he spends his entire?

(ii) Write down the equation of the budget line.

(iii) What is slop of the price line?                  1+1+1= 3

Ans.

(a)    Budget line equation P1 X  + P2 Y = M , means 4x + 5Y = 20           (1 mark)

(b)   P1x +0 = M , 4x = 20 , x= 20/4 =5 Units                                               (1Mark)

(c)    0 +P2y = 20, 5Y = 20 , Y = 20/5 = 4 Units                                             (1Mark)

(d)   Slope of budget line = P x/ Py means 4/5 = 0.8.                                   (1Mark)

                            OR

Why is an indifference curve generally convex to the origin?

Ans.  i. Meaning of MRS xy   = 1 mark

ii. Meaning of diminish MRS = 1 Mark

iii. Indifference curve convex due to diminishing MRS and diagram = 2 Marks               

9. Why does the demand curve slope downward from left to right? Explain any four points.    (3)

Ans. Any 04 points with explanation each carry 1 mark                                                1x4= 4 marks

10. Explain the effect the following on supply of a good: -

 (i) Change in the price of inputs .

(ii) Technological advancement.                                                                                                            

   Explanation with diagram 2 x2 =                                            (4 Marks)

11. Explain the relationship between AC, AVC and MC with the help of a diagram.                    (4)

     1. All the curves are ‘U’ shaped diagram   = 1 mark

         Explanation of three points of relationship = 3 marks                                                      

12. Explain the concept of time horizons and supply curves.                                                            (6)

Ans. Diagram and Explanation of Very Short period, short period and long period supply curve

                                                                                                                                        2+2+2 = 6 Marks.

13. Ans.

(i) Why do indifference curves not intersect each other?    3 marks

(ii) Explain that higher indifference curve provide higher level of satisfaction.  3 marks,       

14. Ans.     (i) Diagram and explanation             3 Marks

(ii)     Diagram and explanation                3 Marks.

(i)                   

1.       Meaning of MOC = 1 mark

2.       Table and with increasing MOC =  2 Marks.          1+2= 3 marks.

(ii)                Ans. Diagram with both the situations.                                                  3 marks.

                                                                                                                                                            3x2= 6

15. Differentiate between Collusive Oligopoly and Non Collusive oligopoly. 

Ans. Three points of difference with explanation                                             3 x 2 = 6 Marks.

                                                      OR

 Market for a good is in equilibrium, there is simultaneous decrease in both demand and supply, explain its effect on market.           

Draw three diagrams with all explanation. 

Three diagram, 1 Mark for Diagram 1 Mark for Explanation.    2 x 3  = 6 Marks.

Part – B

16. Narrow money refers to: -

      (a) M1                                        1 mark

17. Payment of interest is : -

      (a) Revenue expenditure                1 Mark

18. In order to encourage investment in the economy, the RBI may : -

     (a) Reduce CRR           1 Mark

19. A government shows a Primary deficit of 4400 crores, the revenue expenditure on interest payment is 400 crors, How much is the fiscal deficit.                       

                                            (c) 4800 crores

20. Ans. Repo rate refers to the rate of interest charged by RBI for lending short term loans to commercial against their securities.

21. Differentiate between final goods and intermediate goods.     

Three differences with explanation 1 mark each ,  1x3 = 3 marks

                                             OR

      Three differences with explanation 1 mark each ,1x3 = 3 marks

22.  Ans.  1.  Yes, = ½  marks,

             2.  When Y is less than consumption, S is negative.   

              APS = S/Y APs is negative ,             = 1.5  Mark

  Why consumption is more than income             = 1Mark

Total = 3 Marks

23. Explain the concept of under employment equilibrium with the help of a diagram? Show on the same diagram the additional investment expenditure required to reach full employment equilibrium?

  Diagram = 2,  Explanation 1 mark.  Total =       3 marks                                                                                                                                   

24. Ans.  Meaning and explanation of ‘ Economic stability’   an object of budget.          3 marks.

25.   Ans. Meaning and Formula of Primary deficit = fiscal deficit – interest payments.

mark 1 Mark.

 It mean government has to borrow only for its interest commitments on earlier loans. Govt is maintaining fiscal discipline in the present year.                                                           = 2 marks

Total 3 Marks

26.  Why does demand for foreign exchange rise when it price falls.                               

Ans.  Three points of explanation with 1 mark each.                   1x3 = 3

27.   Meaning of Current account and explanation of components = 1 + 3= 4 Marks

                                 OR

Meaning and explanation of components                                        = 4 marks.

                             

 

28. Explain ‘lender of last resort’ and Banker’s bank function of central bank.

                Explanation function of ‘lender of last resort’ & function of Bankers Bank . 3 marks for each

29. Will the following be included in the calculation of National Income or Not : -

       (i) Payment of interest on borrowing by general government.

No, because these transfer payments.

(i)                  Salaries received by the Indian employee working in American embassy.

Yes, because part of NFIA

(v)                Salaries paid to Russian working in Indian embassy in India.    3x2= 6

Yes, it is negative part of NFIA

30. From the following data calculate (a) Personal Disposable Income (b) National Income

Sr. No.	Particulars	Rs. In Crores
1	Private Income	3000
2	Compensation of employees	800
3.	Mixed Income of self employed	900
4.	Net Factor income from Abroad	-50
5.	Net retained earning of Private enterprises	600
6.	Rent	350
7.	Profit	600
8.	Consumption of Fixed Capital	200
9.	Direct taxes paid by Household	300
10.	Corporate tax	350
11.	Net indirect taxed	250
12.	Net Export	-70
13.	Interest	300

NI by Income Method

COE+OS+MI+NFIA= NI                                                                                  3

800+(350+300+600)+900+(-50)=2900

Personal disposable income + Private Income – corporate tax_ net retained earnings of private enterprises –direct taxes paid by HH                                                                          3

3000-350-600-300=1750