12th Economics Paper Solutions Set 1 : CBSE Delhi Previous Year 2014

General Instructions :
(i) All questions in both the sections are compulsory.
(ii) Marks for questions are indicated against each.
(iii) Question Nos. 1-5 and 17-21 are very short-answer questions carrying 1 mark each. They are required to be answered in one sentence each.
(iv) Question Nos. 6-10 and 22-26 are short-answer questions carrying 3 marks each. Answer to  them should not normally exceed 60 words each.
(v) Question Nos. 11-13 and 27-29 are also short-answer questions carrying 4 marks each. Answer to them should not normally exceed 70 words each.
(vi) Question Nos. 14-16 and 30-32 are long-answer questions carrying 6 marks each. Answer to them should not normally exceed 100 words each.
(vii) Questions marked star (*) are value based questions.
(viii) Answer should be brief and to the point and the above word limit should be adhered to as far as possible.
Q1 :

Unemployment is reduced due to the measures taken by the government. State its economic value in the context of production possibilities frontier.


Answer :

Due to the measures taken by the government to reduce the unemployment, the point which was earlier below the Production possibility curve (indicating under utilisation of resources) will shift close to or on the PPC (indicating better utilisation of resources). Hence, economic value is reflected in terms of increased output and income.

Q2 :

Define budget set.


Answer :

A budget set represents those combinations of consumption bundles that are available to the consumer given his/her income level and at the existing market prices.
 

Q3 :

What is meant by revenue in microeconomics ?


Answer :

In microeconomics, revenue can be defined as the money income for a firm which it receives from the sale of goods/services produced.

Q4 :

Give meaning of 'returns to a factor.'


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q5 :

What is perfect oligopoly?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q6 :

Explain the central problem 'for whom to produce.'


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q7 :

A consumer buys 18 units of a good at a price of Rs. 9 per unit. The price elasticity of demand for the good is (−) 1. How many units the consumer will buy at a price of Rs. 10 per unit ? Calculate.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q8 :

State the relation between marginal revenue and average revenue.

OR
State the relation between total cost and marginal cost.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q9 :

What is the behaviour of average fixed cost as output is increased? Why is it so?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q10 :

Why are the firms said to be interdependent in an oligopoly market? Explain.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q11 :

A consumer consumes only two goods. Explain consumer's equilibrium with the help of utility analysis.


OR
 
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.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q12 :

What happens to the demand of a good when consumer's income changes? Explain.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q13 :

State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q14 :

Explain the conditions of consumer's equilibrium with the help of the indifference curve analysis.


Or


Explain the three properties of the indifference curves.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q15 :

From the following information about a firm, find the firms equilibrium output in terms of marginal cost and marginal revenue. Give reasons. Also find profit at this output.

Output (units) Total Revenue (Rs.) Total Cost (Rs.)
1 7 8
2 14 15
3 21 21
4 28 28
5 35 36


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q16 :

Market of a commodity is in equilibrium. Demand for the commodity "increases." Explain the chain of effects of this change till the market again reaches equilibrium. Use diagram.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q17 :

What are demand deposits?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q18 :

What is involuntary unemployment?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q19 :

Define marginal propensity to consume.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q20 :

Define government budget.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q21 :

Give meaning of balance of trade.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q22 :

Define externalities. Give an example of negative externality. What is its impact on welfare?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q23 :

Explain the significance of 'store of value' function of money.


Or

Explain the significance of 'medium of exchange' function of money.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q24 :

Is the following revenue expenditure or capital expenditure in the context of government budget? Give reason.
(i) Expenditure on collection of taxes.
(ii) Expenditure on purchasing computers.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q25 :

Explain the meaning of balance of payments deficit.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q26 :

Recently Government of India has doubled the import duty on gold. What impact is it likely to have on foreign exchange rate and how?


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q27 :

Define money supply and explain its components.

Or

Explain the 'lender of last resort' function of central bank.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q28 :

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


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q29 :

Government raises its expenditure on producing public goods. Which economic value does it reflect? Explain.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q30 :

Calculate national income and gross national disposable income from the following:

    (Rs. Arab)
(i) Net current transfers to abroad (−) 15
(ii) Private final consumption expenditure 600
(iii) Subsidies 20
(iv) Government final consumption expenditure 100
(v) Indirect tax 120
(vi) Net imports 20
(vii) Consumption of fixed capital 35
(viii) Net change in stocks (−) 10
(ix) Net factor income to abroad 5
(x) Net domestic capital formation 110


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q31 :

Giving reason explain how should the following be treated in estimating gross domestic product at market price ?
(i) Fees to a mechanic paid by a firm.
(ii) Interest paid by an individual on a car loan taken from a bank.
(iii) Expenditure on purchasing a car for use by a firm.


Answer :

Please Register/Login to get access to all solutions Facebook Login
Q32 :

Explain national income equilibrium through aggregate demand and aggregate supply. Use diagram. Also explain the changes that take place in an economy when the economy is not in equilibrium.

OR
Outline the steps required to be taken in deriving saving curve from the given consumption curve. Use diagram.


Answer :

Please Register/Login to get access to all solutions Facebook Login

12th Economics Paper Solutions Set 3 : CBSE Delhi Previous Year 2013 will be available online in PDF book soon. The solutions are absolutely Free. Soon you will be able to download the solutions.