Page 1
Pg. 1
SENIOR SCHOOL CERTIFICATE EXAMINATION
MARCH-2015
MARKING SCHEME – ECONOMICS (FOREIGN)
(SET-I)
Expected Answers / Value Points
GENERAL INSTRUCTIONS :
1. Please examine each part of a question carefully and allocate the marks
allotted for the part as given in the marking scheme below. TOTAL MARKS
FOR ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIDE WHERE THE
ANSWER ENDS.
2. Expected suggested answers have been given in the Marking Scheme. To evaluate
the answers the value points indicated in the marking scheme be followed.
3. For questions asking the candidate to explain or define, the detailed explanations
and definitions have been indicated alongwith the value points.
4. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be
deducted for such an error.
5. Wherever only two / three or a “given” number of examples / factors / points
are expected only the first two / three or expected number should be
read. The rest are irrelevant and must not be examined.
6. There should be no effort at “moderation” of the marks by the evaluating
teachers. The actual total marks obtained by the candidate may be of no
concern to the evaluators.
7. Higher order thinking ability questions are assessing student’s understanding /
analytical ability.
General Note : In case of numerical question no mark is to be given if only
the final answer is given.
C1 Expected Answer / Value Points
Distribution
of Marks
1 Utility refers to satisfaction from the consumption of goods. 1
2 (a) Substitutes 1
3 (b) Does not shift 1
Page 2
Pg. 1
SENIOR SCHOOL CERTIFICATE EXAMINATION
MARCH-2015
MARKING SCHEME – ECONOMICS (FOREIGN)
(SET-I)
Expected Answers / Value Points
GENERAL INSTRUCTIONS :
1. Please examine each part of a question carefully and allocate the marks
allotted for the part as given in the marking scheme below. TOTAL MARKS
FOR ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIDE WHERE THE
ANSWER ENDS.
2. Expected suggested answers have been given in the Marking Scheme. To evaluate
the answers the value points indicated in the marking scheme be followed.
3. For questions asking the candidate to explain or define, the detailed explanations
and definitions have been indicated alongwith the value points.
4. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be
deducted for such an error.
5. Wherever only two / three or a “given” number of examples / factors / points
are expected only the first two / three or expected number should be
read. The rest are irrelevant and must not be examined.
6. There should be no effort at “moderation” of the marks by the evaluating
teachers. The actual total marks obtained by the candidate may be of no
concern to the evaluators.
7. Higher order thinking ability questions are assessing student’s understanding /
analytical ability.
General Note : In case of numerical question no mark is to be given if only
the final answer is given.
C1 Expected Answer / Value Points
Distribution
of Marks
1 Utility refers to satisfaction from the consumption of goods. 1
2 (a) Substitutes 1
3 (b) Does not shift 1
Pg. 2
4 Good X
(Units)
Good Y
(Units)
MRT
0 4 -
1 3 1Y:1X
2 2 1Y:1X
3 1 1Y:1X
4 0 1Y:1X
Since MRT is constant, the PP curve will be downward sloping straight line.
(Diagram not required)
1½
1½
5 Education raises efficiency by making a worker a skilled worker. This will
increase production potential shifting the PP curve upwards.
(Diagram not required)
OR
Inflow of foreign capital into the country means increase in resources. This
will raise production potential of the country leading to upward shift of PP
curve.
(Diagram not required)
3
3
6 The measure of price elasticity of demand has a minus sign because there is
inverse relation between price and demand, while the measure of price
elasticity of supply has plus sign because there is direct relation between
price and supply of a good.
3
7 This feature ensures that firms in a perfectly competitive market earn just
the normal profit in the long run. New firms enter when the existing firms
are earning above normal profit. This raises industry’s output, brings down
market price and brings profit back to the normal. Existing firms start
leaving when facing loss. This lowers industry’s output, raises market price,
wipes out losses till firms are earning just the normal profit.
3
8
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government. For example OP is price ceiling while OP
1
is
equilibrium price. Producers are not allowed to sell good at a price greater
than OP. The ceiling is normally imposed on goods needed by masses, like
wheat, rice, sugar etc.
1
2
Page 3
Pg. 1
SENIOR SCHOOL CERTIFICATE EXAMINATION
MARCH-2015
MARKING SCHEME – ECONOMICS (FOREIGN)
(SET-I)
Expected Answers / Value Points
GENERAL INSTRUCTIONS :
1. Please examine each part of a question carefully and allocate the marks
allotted for the part as given in the marking scheme below. TOTAL MARKS
FOR ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIDE WHERE THE
ANSWER ENDS.
2. Expected suggested answers have been given in the Marking Scheme. To evaluate
the answers the value points indicated in the marking scheme be followed.
3. For questions asking the candidate to explain or define, the detailed explanations
and definitions have been indicated alongwith the value points.
4. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be
deducted for such an error.
5. Wherever only two / three or a “given” number of examples / factors / points
are expected only the first two / three or expected number should be
read. The rest are irrelevant and must not be examined.
6. There should be no effort at “moderation” of the marks by the evaluating
teachers. The actual total marks obtained by the candidate may be of no
concern to the evaluators.
7. Higher order thinking ability questions are assessing student’s understanding /
analytical ability.
General Note : In case of numerical question no mark is to be given if only
the final answer is given.
C1 Expected Answer / Value Points
Distribution
of Marks
1 Utility refers to satisfaction from the consumption of goods. 1
2 (a) Substitutes 1
3 (b) Does not shift 1
Pg. 2
4 Good X
(Units)
Good Y
(Units)
MRT
0 4 -
1 3 1Y:1X
2 2 1Y:1X
3 1 1Y:1X
4 0 1Y:1X
Since MRT is constant, the PP curve will be downward sloping straight line.
(Diagram not required)
1½
1½
5 Education raises efficiency by making a worker a skilled worker. This will
increase production potential shifting the PP curve upwards.
(Diagram not required)
OR
Inflow of foreign capital into the country means increase in resources. This
will raise production potential of the country leading to upward shift of PP
curve.
(Diagram not required)
3
3
6 The measure of price elasticity of demand has a minus sign because there is
inverse relation between price and demand, while the measure of price
elasticity of supply has plus sign because there is direct relation between
price and supply of a good.
3
7 This feature ensures that firms in a perfectly competitive market earn just
the normal profit in the long run. New firms enter when the existing firms
are earning above normal profit. This raises industry’s output, brings down
market price and brings profit back to the normal. Existing firms start
leaving when facing loss. This lowers industry’s output, raises market price,
wipes out losses till firms are earning just the normal profit.
3
8
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government. For example OP is price ceiling while OP
1
is
equilibrium price. Producers are not allowed to sell good at a price greater
than OP. The ceiling is normally imposed on goods needed by masses, like
wheat, rice, sugar etc.
1
2
Pg. 3
For blind Candidates Only :
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government while minimum price ceiling refers to imposition of
a lower limit on the price of a good by government.
3
9 Price Exp. Demand
4 400 100
5 400 80
1½
1
1
½
10 Supply refers to the quantity of a good the producers are willing to produce
at a price during a period of time.
Technological progress, by raising productivity, brings down per unit cost.
Price remaining unchanged, profit increases. This induces producers to
supply more.
OR
“Change in supply” refers to increase / decrease in supply due to a change
in any factor other than the own price of the good.
Imposition of tax raises cost. Price remaining unchanged, profit falls. So
producers supply less.
1
3
1
3
11 Let the two goods be X and Y. Given Px =1 , Py = 1 and MRS = 2, the
consumer is said to be in equilibrium when
MRS =
Substituting values we find that
2 >
or MRS >
MRS >
means that consumer is willing to pay more for one more unit of X
as compared to what the market demands.
- The consumer will buy more and more of X.
- As a result MRS will fall due to the Law of Diminishing Marginal
Utility.
- This will continue till MRS =
and consumer is in equilibrium.
(Diagram not required)
3
3
Page 4
Pg. 1
SENIOR SCHOOL CERTIFICATE EXAMINATION
MARCH-2015
MARKING SCHEME – ECONOMICS (FOREIGN)
(SET-I)
Expected Answers / Value Points
GENERAL INSTRUCTIONS :
1. Please examine each part of a question carefully and allocate the marks
allotted for the part as given in the marking scheme below. TOTAL MARKS
FOR ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIDE WHERE THE
ANSWER ENDS.
2. Expected suggested answers have been given in the Marking Scheme. To evaluate
the answers the value points indicated in the marking scheme be followed.
3. For questions asking the candidate to explain or define, the detailed explanations
and definitions have been indicated alongwith the value points.
4. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be
deducted for such an error.
5. Wherever only two / three or a “given” number of examples / factors / points
are expected only the first two / three or expected number should be
read. The rest are irrelevant and must not be examined.
6. There should be no effort at “moderation” of the marks by the evaluating
teachers. The actual total marks obtained by the candidate may be of no
concern to the evaluators.
7. Higher order thinking ability questions are assessing student’s understanding /
analytical ability.
General Note : In case of numerical question no mark is to be given if only
the final answer is given.
C1 Expected Answer / Value Points
Distribution
of Marks
1 Utility refers to satisfaction from the consumption of goods. 1
2 (a) Substitutes 1
3 (b) Does not shift 1
Pg. 2
4 Good X
(Units)
Good Y
(Units)
MRT
0 4 -
1 3 1Y:1X
2 2 1Y:1X
3 1 1Y:1X
4 0 1Y:1X
Since MRT is constant, the PP curve will be downward sloping straight line.
(Diagram not required)
1½
1½
5 Education raises efficiency by making a worker a skilled worker. This will
increase production potential shifting the PP curve upwards.
(Diagram not required)
OR
Inflow of foreign capital into the country means increase in resources. This
will raise production potential of the country leading to upward shift of PP
curve.
(Diagram not required)
3
3
6 The measure of price elasticity of demand has a minus sign because there is
inverse relation between price and demand, while the measure of price
elasticity of supply has plus sign because there is direct relation between
price and supply of a good.
3
7 This feature ensures that firms in a perfectly competitive market earn just
the normal profit in the long run. New firms enter when the existing firms
are earning above normal profit. This raises industry’s output, brings down
market price and brings profit back to the normal. Existing firms start
leaving when facing loss. This lowers industry’s output, raises market price,
wipes out losses till firms are earning just the normal profit.
3
8
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government. For example OP is price ceiling while OP
1
is
equilibrium price. Producers are not allowed to sell good at a price greater
than OP. The ceiling is normally imposed on goods needed by masses, like
wheat, rice, sugar etc.
1
2
Pg. 3
For blind Candidates Only :
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government while minimum price ceiling refers to imposition of
a lower limit on the price of a good by government.
3
9 Price Exp. Demand
4 400 100
5 400 80
1½
1
1
½
10 Supply refers to the quantity of a good the producers are willing to produce
at a price during a period of time.
Technological progress, by raising productivity, brings down per unit cost.
Price remaining unchanged, profit increases. This induces producers to
supply more.
OR
“Change in supply” refers to increase / decrease in supply due to a change
in any factor other than the own price of the good.
Imposition of tax raises cost. Price remaining unchanged, profit falls. So
producers supply less.
1
3
1
3
11 Let the two goods be X and Y. Given Px =1 , Py = 1 and MRS = 2, the
consumer is said to be in equilibrium when
MRS =
Substituting values we find that
2 >
or MRS >
MRS >
means that consumer is willing to pay more for one more unit of X
as compared to what the market demands.
- The consumer will buy more and more of X.
- As a result MRS will fall due to the Law of Diminishing Marginal
Utility.
- This will continue till MRS =
and consumer is in equilibrium.
(Diagram not required)
3
3
Pg. 4
OR
Given
= 2 ,
= 1 and
=4 ,
, the consumer will be in
equilibrium when
Substituting values, we find that consumer is not in equilibrium because :
<
Or
Since per rupee
is lower as compared to per rupee
, the
consumer will buy less of X and more of Y. As a result
will rise and
will fall till
are equal again and the consumer is in
equilibrium.
(Diagram not required)
3
3
12
The Phases are :
Phase : I TP rises at increasing rate i.e. upto A
Phase : II TP rises at decreasing rate i.e. between A and B.
Phase : III TP falls i.e. after B.
Reasons :
Phase I : Initially variable input is too small as compared to the fixed input,
As production starts there is efficient use of the fixed input leading to rise
in productivity of the variable input on account of division of labour. As a
result TP rises at increasing rate.
Phase II : After a level of output, pressure on fixed input leads to fall in
productivity of the variable input. As a result TP continues to rise but at a
decreasing rate.
Phase III : The amount of variable input becomes too large in comparison to
the fixed input causing decline in TP.
½x3
1x3
1½
TP A
B
Page 5
Pg. 1
SENIOR SCHOOL CERTIFICATE EXAMINATION
MARCH-2015
MARKING SCHEME – ECONOMICS (FOREIGN)
(SET-I)
Expected Answers / Value Points
GENERAL INSTRUCTIONS :
1. Please examine each part of a question carefully and allocate the marks
allotted for the part as given in the marking scheme below. TOTAL MARKS
FOR ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIDE WHERE THE
ANSWER ENDS.
2. Expected suggested answers have been given in the Marking Scheme. To evaluate
the answers the value points indicated in the marking scheme be followed.
3. For questions asking the candidate to explain or define, the detailed explanations
and definitions have been indicated alongwith the value points.
4. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be
deducted for such an error.
5. Wherever only two / three or a “given” number of examples / factors / points
are expected only the first two / three or expected number should be
read. The rest are irrelevant and must not be examined.
6. There should be no effort at “moderation” of the marks by the evaluating
teachers. The actual total marks obtained by the candidate may be of no
concern to the evaluators.
7. Higher order thinking ability questions are assessing student’s understanding /
analytical ability.
General Note : In case of numerical question no mark is to be given if only
the final answer is given.
C1 Expected Answer / Value Points
Distribution
of Marks
1 Utility refers to satisfaction from the consumption of goods. 1
2 (a) Substitutes 1
3 (b) Does not shift 1
Pg. 2
4 Good X
(Units)
Good Y
(Units)
MRT
0 4 -
1 3 1Y:1X
2 2 1Y:1X
3 1 1Y:1X
4 0 1Y:1X
Since MRT is constant, the PP curve will be downward sloping straight line.
(Diagram not required)
1½
1½
5 Education raises efficiency by making a worker a skilled worker. This will
increase production potential shifting the PP curve upwards.
(Diagram not required)
OR
Inflow of foreign capital into the country means increase in resources. This
will raise production potential of the country leading to upward shift of PP
curve.
(Diagram not required)
3
3
6 The measure of price elasticity of demand has a minus sign because there is
inverse relation between price and demand, while the measure of price
elasticity of supply has plus sign because there is direct relation between
price and supply of a good.
3
7 This feature ensures that firms in a perfectly competitive market earn just
the normal profit in the long run. New firms enter when the existing firms
are earning above normal profit. This raises industry’s output, brings down
market price and brings profit back to the normal. Existing firms start
leaving when facing loss. This lowers industry’s output, raises market price,
wipes out losses till firms are earning just the normal profit.
3
8
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government. For example OP is price ceiling while OP
1
is
equilibrium price. Producers are not allowed to sell good at a price greater
than OP. The ceiling is normally imposed on goods needed by masses, like
wheat, rice, sugar etc.
1
2
Pg. 3
For blind Candidates Only :
Maximum price ceiling refers to imposition of upper limit on the price of a
good by the government while minimum price ceiling refers to imposition of
a lower limit on the price of a good by government.
3
9 Price Exp. Demand
4 400 100
5 400 80
1½
1
1
½
10 Supply refers to the quantity of a good the producers are willing to produce
at a price during a period of time.
Technological progress, by raising productivity, brings down per unit cost.
Price remaining unchanged, profit increases. This induces producers to
supply more.
OR
“Change in supply” refers to increase / decrease in supply due to a change
in any factor other than the own price of the good.
Imposition of tax raises cost. Price remaining unchanged, profit falls. So
producers supply less.
1
3
1
3
11 Let the two goods be X and Y. Given Px =1 , Py = 1 and MRS = 2, the
consumer is said to be in equilibrium when
MRS =
Substituting values we find that
2 >
or MRS >
MRS >
means that consumer is willing to pay more for one more unit of X
as compared to what the market demands.
- The consumer will buy more and more of X.
- As a result MRS will fall due to the Law of Diminishing Marginal
Utility.
- This will continue till MRS =
and consumer is in equilibrium.
(Diagram not required)
3
3
Pg. 4
OR
Given
= 2 ,
= 1 and
=4 ,
, the consumer will be in
equilibrium when
Substituting values, we find that consumer is not in equilibrium because :
<
Or
Since per rupee
is lower as compared to per rupee
, the
consumer will buy less of X and more of Y. As a result
will rise and
will fall till
are equal again and the consumer is in
equilibrium.
(Diagram not required)
3
3
12
The Phases are :
Phase : I TP rises at increasing rate i.e. upto A
Phase : II TP rises at decreasing rate i.e. between A and B.
Phase : III TP falls i.e. after B.
Reasons :
Phase I : Initially variable input is too small as compared to the fixed input,
As production starts there is efficient use of the fixed input leading to rise
in productivity of the variable input on account of division of labour. As a
result TP rises at increasing rate.
Phase II : After a level of output, pressure on fixed input leads to fall in
productivity of the variable input. As a result TP continues to rise but at a
decreasing rate.
Phase III : The amount of variable input becomes too large in comparison to
the fixed input causing decline in TP.
½x3
1x3
1½
TP A
B
Pg. 5
For Blind Candidate Only
Variable input
(Units)
TP
(Unit)
MP
(Unit)
1 6 6
2 20 14
3 32 12
4 40 8
5 40 0
6 37 -3
Phases :
(1) TP increases at increasing rate upto 2 units.
(2) TP increases at decreasing rate upto 5 units.
(3) TP falls from 6 unit onwards.
Causes :
Same as above
1½
½x3
3
13 The equilibrium conditions are :
i) MC = MR and (ii) MC > MR after equilibrium.
Suppose MC > MR. In this situation it will be profitable for the firm to
produce more or less depending upon relative changes in MC and MR till
MC = MR. Suppose MC < MR. It will be profitable for the producer to
produce more till MC = MR.
MC = MR is a necessary condition but not sufficient to ensure equilibrium.
If after MC= MR output, MC<MR if more is produced, it will be profitable
for the firm to produce more. If after MC= MR output MC > MR, it will not
be profitable to produce more and the firm will be in equilibrium.
(Diagram not required)
3
3
14 - Given equilibrium, demand ‘decreases.’
- Price remaining unchanged, excess supply emerges.
- Excess supply leads to competition among sellers causing price to fall.
- Fall in price causes rise (expansion) in demand and fall (contraction) in
supply.
- The price continues to fall till the market is in equilibrium again at a lower
price.
(Diagram not required)
6
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