IMPORTANT QUESTIONS SET BY CBSE FROM 2013 - 2015 . EXAMINATIONS

IMPORTANT QUESTIONS FOR CBSE EXAMINATION CHAPTERWISE.

From 2013 to 2015

PART – A

                                          1. Introduction & Central Problems: -

3 Marks Questions

i)                    Define PPC and state its properties.

ii)                   Why a PPC concave? Explain.

iii)                 Why does the problem of ‘How to Produce arise’? Explain.

iv)                 Explain the meaning of opportunity cost with the help of PPC schedule.

v)                  With suitable example explain the problem of ‘ For Whom to produce?

vi)                 Giving reasons comment on the shape of production possibility curve based on the following schedule:

Good X ( Units)	Good Y (Units)
0	30
1	27
2	21
3	12
4	0

vii)               What is likely to be the impact of ‘ Make in India’ , appeal to  the foreign investors by the Prime Minister of India.,  on the Production possibilities Frontier of India.

viii)              What is likely to be the impact of effects towards reducing unemployment on the production potentials of the economy? Explain.

ix)                 Giving reasons comment on the shape of PPC based on the following schedule:

Good X ( Units)	Good Y (Units)
0	16
1	12
2	8
3	4
4	0

i)                    Giving reasons comment on the shape of PPC based on the following schedule:

Good X ( Units)	Good Y (Units)
0	10
1	9
2	7
3	4
4	0

ii)                   Describe the Problem of ‘ What to produce’

iii)                 Govt. established a large number of Institutes of science & technology, how will it affect the PPC? Explain.

iv)                 Describe problem of ‘How to Produce’?

v)                  Describe the problem of ‘For whom to produce?

2. Consumer’s Equilibrium

    2014: -

i)                    Define indifferent curve.

ii)                   What is meant by monotonic preference?

2015:                  i) Define indifferent curve.

Ii) If Marginal Rate of Substation is increasing throughout, IC will

be: -

        a) Down ward sloping convex   b) Downward sloping concave

       c) Downward sloping straight line.  d)  Upward sloping concave    

iii)                 Define budget line

iv)                 Define indifference map.

3 Marks Questions: -

2013: 

1.       Explain the meaning of diminishing MRS with the help of numerical problems.

2.       What is budget line why it is downward sloping?

3.       Explain the condition of consumer’s equilibrium under Utility Analysis.

4.       What is the Law of diminishing marginal utility? Give a numerical example.

4 Marks: -

I  ) A  consumer consumes only two goods  X and Y and is in equilibrium. Show that if the price of good x is rise, it will lead to fall in demand of X.

ii)   A consumer consumes only two goods X and Y and is in equilibrium. Show that if the price of good Y falls, it will lead to rise in demand of Y.

iv)                 A consumer consumes only two goods X and Y and is in equilibrium. Show that if the price of good x is rise, the consumer buy less of X. Use utility analysis.

v)                  Given the price of a good, how will a consumer decide as to how much quantity of that good to buy? Use utility analysis.

2014 March.

i)                    Explain distinction between the equation of budget line and budget constraint.

2015 Jul.        i) Explain with the help of a numerical example, the meaning of  Diminishing Marginal Rate of substitution.

ii)                   Explain the Law of diminishing marginal utility with example.

iii)                  6 Marks Questions: -

2013 March.

i)                    Explain three properties of Indifference Curve.

ii)                   Explain the condition of consumer equilibrium under IC  approach.

2013 Jul.

i)                    Explain the meaning of ‘Monotonic preference’   and also explain why IC (i) Downward sloping (ii) Convex to the origin.

ii)                   Explain the concept MRS and its behavior in the IC analysis. Use a schedule.

2014: March.

i)                    Explain Why an IC curve downward sloping (ii) convex.

ii)                   Explain the concept of ‘MRS’ with the help of numerical example. Also explain its behavior along with IC.

2014: July

i)                    Explain the characteristics of IC.

ii)                   Explain the condition of consumer’s equilibrium using utility analysis.

2015: March.

i)                    Consumer consumes only two goods X and Y, both priced at Rs. 2 per unit, If the consumer choose a combination of two goods with MRS equal to 2, is consumer in equilibrium? Why or Why not ? What will a rational consumer do in this situation ? Explain.

ii)                   Consumer consumes only two goods X and Y, Whose  prices are Rs. 5/-  and Rs.4 /-at Rs. 2 per unit respectively. , If the consumer choose a combination of two goods with MU of X equal to 4 and Y equal to Rs.2, is the consumer in equilibrium? Why or Why not? What will a rational consumer do in this situation? Use Utility analysis.

                                           3.  Demand & Elasticity of demand.

2013 March.

How is demand of a good affected by rise in the price of other’s good? Explain.

         2014.Jul.  3 & 4 Marks

                        i) A and B are complementary goods. Explain the effect of change in price of A on demand

                            of B.

                         II)  Give the meaning of inferior good. Explain the same with example.

III) How does change in price of substitute goods affecting the demand of the given good? Example with example.

i)                    How does change in price of a complementary good affect the demand of the given good? Explain with the help of an example.

2015 Jul.           Explain the differences between ‘ change in Dd and change in Qty. Dd.

ii)                   Explain the significance of ‘minus sign’ attached to the measure of price elasticity of demand in case of a normal good , as compared to the ‘ Plus sign’ attached to the measure of price elasticity of supply.

                                    4.   Law of Variable proportion.

2013:  3 Marks and 4 marks

i)                    State the phases in the behavior of total product. Use diagram.

ii)                   State the relation between MP and AP. Use diagram.

iii)                 Giving reasons , state following statement are true or not:

a)      Average product will increase only when MP increases.

b)      Under diminishing returns to a factor, TP continue to increase till MP product reaches zero.

2014- Mar.  i) Giving reasons explain the Law of variable proportion.

2015 Jul.: -

i)                    Explain the take place in TP and MP under diminishing returns to change a factor.

ii)                   Sate with the help of MP schedule the different phases of the Law of variable proportion.

  6 Marks: -

                     i) What are the different phases in the Law of Variable proportion in terms of MP? Giving reasons behind each phase. Use diagram.

                                    5.    Supply & Elasticity of Supply

2013 July

i)                    Explain the geometric methods for measuring price elasticity of supply. Use diagram.

2014 March.

i)Explain how technological progress is a determinate of supply of a good by a firm.

2014 Jul.

i) Explain any two causes of a ‘decrease in supply of a good by a firm.

ii)                   Explain any two causes of rightward shift of supply curve.

2015 Jul.

i)                    Giving reasons, state whether the following statement is true or false?

i)                    The supply curve of a good shift to right when prices of other goods rise.

                                                      6. Cost : -

      2012: - July: -

1.       Explain the relationship between AC and AVC.

2.       Define variable cost. Explain the relationship between MC and AC.

2015 July:

1.       Giving reasons , state whether the following statement is true or false:

i)                    The difference between AC and AVC always constant?

2015 Mar.

i.                     What is the behavior of (i) AFC (ii) AVC as more and more unit of a good are produce?

ii.                   2015 Jul.

State the relationship between: -

i)                    I) MC and AVC

ii)                   TC and MC.

Numerical: -

1)      The AFC of at unit 4 of output is Rs. 20. AVC at 5 units of output is Rs.40. AC of producing unit is (choose the correct alternative)

2)      Calculate MC at each level of output: -   

Output	1	2	3	4	5	6
AVC	12	11	10	9	9	10

Calculate AVC : -

Output	1	2	3	4	5	6
MC	24	20	16	12	18	30

                                                                      7.  Revenue: -

2014 Mar.

i)                     Why AR always equal to Price?

2015.

i) Why is AR curve of a firm parallel to X-axis under perfect competition? Explain.

ii) Why is average revenue of a firm negative sloped under monopolistic competition? Explain.

ii)                   Define AR. Show that AR and Price are same.

                               8.    Producer’s Equilibrium: -

2012: -

i)                    Explain the producer’s equilibrium with the help of a numerical example.

2013: - From the table find out at the level of output at which producer will be in equilibrium. Give reasons for your answer.

Output	Marginal Revenue	Marginal Cost
1	8	10
2	8	8
3	8	7
4	8	8
5	8	9

2013: - giving the reasons identity the equilibrium level of output and find profit at this output using , MC and MR ‘ approach from the following: -

Output	1	2	3	4	5
TC	7	13	20	28	37
TR	7	14	21	28	35

2014: - The following information about a firm, find the firm’s equilibrium output in the term of MC and MR. Give reasons. Also find profit at this output.

Output	T R	TC
1	6	7
2	12	13
3	18	17
4	24	23
5	30	31

2015: -

i)                    Explain why will a producer not be in equilibrium if conditions of equilibrium are not met?

9. Forms of Market: -

1.       Why can a firm not earn abnormal profit in a long run? Explain.

2.       Why is the demand curve of a firm under monopolistic competition more elastic than under monopoly?

2014: -

i)                    Why is the number of firms small under Oligopoly?  Explain.

2015: -March

i)                    In a perfect competitive market buyers treat a product of a firm is homogenous. Explain the significance of this feature.

ii)                   Explain the implication of Non – price competition in Oligopoly market.

iii)                 Distinguish between Cooperative and non – cooperative oligopoly.

2015 July:

i)                    Explain the significance of ‘barriers to entry’ feature of monopoly.

ii)                   Explain the product differentiate features of monopolist competition.

iii)                 Explain the inter dependence of firm’ feature of oligopoly.

iv)                 Explain the significance of ‘homogeneous product ‘features of perfect competition.

10. Price determination under Perfect competition

2013:- Mar.

1.       Equilibrium price of an essentials medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price, but only through the normal market forces? Also explain the series of changes that will occur in the market.    (4)

2.       Market of essential items of consumption is in equilibrium, but equilibrium price is too high for the common man. What can the govt. do to bring down its market price but only due to normal market forces? Explain the chain effect of the govt. action. (4)

3.       Equilibrium price of a good is greater than its market price. Explain all the changes that will take place in the market. Use diagram.

4.       Mkt. of a commodity is in equilibrium, demand for the commodity’ decreases’. Explain the chain effect of this change till the market again reaches equilibrium. Use diagram.

5.       Mkt. of a commodity is in equilibrium, demand for the commodity ‘increases’. Explain the chain effect of this change till the market again reaches equilibrium. Use diagram.

6.       Explain the changes that can take place in the mkt. when the market price of good is less than its equilibrium price. Use diagram.

7.       Explain the changes that can take place in the mkt. when the market price of good is more than its equilibrium price. Use diagram.

8.       Explain the meaning of excess supply. Explain its chain effect on the price of a good is greater than its equilibrium price. Use diagram.

2015 Mar.

9.       Market of the good is equilibrium. The supply of a good is ‘decreases’. Explain the chain effect of this change.

10.   Market of the good is equilibrium. The supply of a good is ‘increases’. Explain the chain effect of this change.

2015 Jul.

1.       Explain with the help of a diagram the chain effect of a rightward shift in demand curve of a good on its equilibrium price , quantity demanded and supplied.

5.       Basic Concepts of Macro Economics and Circular Flow of Income: -

       2013: -

I ) Define final goods.

ii)                   Give example of intermediate goods.

iii)                 What are intermediate goods?

iv)                 Distinguish between stock and flows. Give an example of each.

v)                  Explain the circular flow of income.

vi)                 Define intermediate goods and final goods. Can milk be an intermediate good? Give reasons for your answer.

6.         National Income and its determination : -

i)                    What are externalities? Gives an example of a positives externalities and its impact on welfare of the people.

ii)                   Distinguish between real and nominal gross domestic product.

iii)                 Distinguish ‘real’ GDP and Nominal ‘GDP’. Which is better index of the economics welfare of the

iv)                 people? Give two reasons for your answer.

   Chapter: Measurement of National Income

v)                  What precautions under taken while calculating national income by expenditure method.

vi)                 What are the four precautions under taken while calculating national income by income method?

vii)               What are the four precautions under taken while calculating national income by product method?

viii)              Explain the following: -

i)                    Why does import deducted while calculating domestic income by expenditure method?

ii)                   Why are free facilities given to the employees including in National Income?

iii)                 Distinguish between real income and nominal income .Explain why cannot be treated as a true index of welfare?

7.        How does the following treated in estimation national income of a country? You must give reasons for your answer: -

i)                    Taking care of aged parents.

ii)                   Payment of corporation tax

iii)                 Expenditure on providing police services by the following?

iv)                 Imputed rent of self occupied houses.

v)                  Interest received on debenture.

vi)                 Financial help received by flood victims.

vii)               Price won in a lottery.

viii)              Interest on public debt.

ix)                 Why indirect taxes deducted while estimating N Y by expenditure method.

x)                  Why free facilities are given to the employee included?

xi)                 Taking care of aged parents.

xii)               Payment of corporate tax.

xiii)              Expenditure provided police services by the govt.

xiv)             Payment of interest by a firm to the bank.

xv)               Expenditure on free services by a govt. firm.

xvi)             Payment of interest by an individual to a bank.

xvii)            Expenditure on education of children by a family.

xviii)          Payment of electricity bills by a school.

         11.    Money and Banking

i)                    All functions of Central bank.

ii)                   Explain Credit creation by Commercial banks with an example.

iii)                 Explain any two methods of credit control used by Central bank.

iv)                 What is Legal reserve ratio? Explain with its components.

v)                  How bank rate is used by Central bank in influencing credit creation by Commercial bank.

                    12.  Determination of equilibrium level

I)                    Distinguish between autonomous investment and Induced investment.

II)                  Differentiate  between  Aggregate demand and aggregate supply.

III)                Distinguish between ex- ante and ex-posts measures.

IV)               Explain the meaning of APC. What is its relation between APS?

V)                 Which of the following can note have negative value? Give reasons.

i)                    APS                               ii) MPS

VI.                Explain the steps taken in derivation of the consumption curve from the saving curve. Use diagram.

VII.              Outline the steps taken in derivation of the consumption curve from the saving curve. Use diagram.

VIII.            Explain the changes that will take place in an economy when AD is not equal to AS.?

IX.                When an economy is in equilibrium? Explain with the help of saving and investment functions. Also explain the changes take place in an economy when economy is not in equilibrium? Use diagram.

X.                  In an economy spending are greater than planned output. Explain all the changes that take place in an economy? When the economy is not in equilibrium. Use diagram.

2015 : -  In an economy spending are greater than planned output. Explain

               all the changes that take place  in the economy.

                    13.  PROBLEMS OF DEFICIT DEMAND AND EXCESS DEMAND

1.       Distinguish between inflationary and deflationary gap with help of diagram.

2.       Explain the meaning of deflationary gap with the help of a diagram.

3.       Explain the meaning of under employment.

4.       What is excess demand in macro economics? Show the same in the diagram.

5.       Explain the meaning of under employment equilibrium; explain any two measures by which full employment can be achieved?

6.       Explain the role of ‘legal reserve’ in reducing inflationary gap.

7.       State the two measures by which inflationary and deflationary gap can be corrected?

8.       What is deficient demand?  Explain the role of ‘bank rate’ and reverse repo rate to remove it.

                          14.   CHAPTER GOVT BUDGET

1.       Distinguish revenue receipts and Capital receipts. Gives examples for each.

2.       How can budgetary policies be used to reduce in equality of income?

3.       Distinguish between revenue expenditure and capital expenditure. Gives an example of each.

4.       State three sources each of revenue receipts and capital in the govt. budget. Which receipts are borrowing by the govt. and why?

5.       Is the following are revenue receipts and Capital receipts. In context of govt. budget and why: -

i)                    Tax receipts and

ii)                   Disinvestment.

15.  FOREIGN EXCHANGE RATE

iii)                 2013

iv)                 1. Explain the effect of depreciation of domestic currency on export.

v)                  2. Foreign exchange rate have risen considerably in a country . What is likely to  impact on import of that country and why?

vi)                 3. How foreign exchange rate determined in the foreign exchange market? Explain.

vii)               2014

viii)              1. Foreign exchange rate in India is rise recently. What impact is it likely to have on export and how?

ix)                 2. Where foreign exchange rate of a country likely to depreciated, What impact will be on import and export.

x)                  3. What are fixed and flexible exchange?

xi)                 4. Explain the rate of managed floating exchange rate.

xii)               5. Explain any three sources of demand of flexible exchange rate.

xiii)              6.  Give the meaning of devaluation and depreciation of domestic currency.

xiv)             7.  Explain why there is inverse relationship between price of foreign exchange and demand of foreign exchange.

xv)               8. Explain why there is an increase in supply of foreign currency , when its price rises.

xvi)             9. . Explain why there is an increase in demand of foreign currency , when its price decreases.

xvii)            10. Give meaning of foreign exchange and foreign exchange rates. Giving reasons, Explain the relationship between foreign exchange rate and demand of foreign exchange rate

COMPLIED BY: RAMESH KUMAR , 

PGT ECONOMICS

                               K V NO.1, BATHINDA CANTT.

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