CBSE Class 12 Economics: Question Paper for 2018 (Term-II) | Toppers Answer Sheets for Class 12 PDF Download

 Page 1


 
CBSE 
Class XII Economics 
All India Board Paper Set 1 – 2018 
 
Time: 3 hrs. Max. Marks: 80 
 
Note:  
? Please check that this question paper contains 11 printed pages. 
? Code number given on the right hand side of the question paper should be written on the 
title page of the answer-book by the candidate.  
? Please check that this question paper contains 24 questions. 
? Please write down the Serial Number of the question before attempting it. 
? 15 minutes time has been allotted to read this question paper. The question paper will be 
distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the 
question paper only and will not write any answer on the answer-book during this 
period. 
  
General Instructions: 
(i) All questions in both the sections are compulsory.  
(ii) Marks for questions are indicated against each question. 
(iii) Questions No. 1 – 4 and 13 – 16 are very short-answer questions carrying 1 mark 
each. They are required to be answered in one sentence. 
(iv) Questions No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks each. 
Answers to them should normally not exceed 60 words each. 
(v) Questions No. 7 – 9 and 19 – 21 are also short answer questions carrying 4 marks 
each. Answers to them should normally not exceed 70 words each. 
(vi) Question number 10 – 12 and 22 – 24 are long-answer questions carrying 6 marks 
each. Answers to them should normally 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. 
 
SECTION A 
 
1. What do you mean by the problem of scarcity? (1) 
 
2. Define cost.                                                                                                                                            (1) 
 
3. When average cost falls, marginal cost                                                                                        (1) 
(Choose the correct alternative) 
(a) Falls  
(b) Rises  
(c) May fall or may rise 
Page 2


 
CBSE 
Class XII Economics 
All India Board Paper Set 1 – 2018 
 
Time: 3 hrs. Max. Marks: 80 
 
Note:  
? Please check that this question paper contains 11 printed pages. 
? Code number given on the right hand side of the question paper should be written on the 
title page of the answer-book by the candidate.  
? Please check that this question paper contains 24 questions. 
? Please write down the Serial Number of the question before attempting it. 
? 15 minutes time has been allotted to read this question paper. The question paper will be 
distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the 
question paper only and will not write any answer on the answer-book during this 
period. 
  
General Instructions: 
(i) All questions in both the sections are compulsory.  
(ii) Marks for questions are indicated against each question. 
(iii) Questions No. 1 – 4 and 13 – 16 are very short-answer questions carrying 1 mark 
each. They are required to be answered in one sentence. 
(iv) Questions No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks each. 
Answers to them should normally not exceed 60 words each. 
(v) Questions No. 7 – 9 and 19 – 21 are also short answer questions carrying 4 marks 
each. Answers to them should normally not exceed 70 words each. 
(vi) Question number 10 – 12 and 22 – 24 are long-answer questions carrying 6 marks 
each. Answers to them should normally 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. 
 
SECTION A 
 
1. What do you mean by the problem of scarcity? (1) 
 
2. Define cost.                                                                                                                                            (1) 
 
3. When average cost falls, marginal cost                                                                                        (1) 
(Choose the correct alternative) 
(a) Falls  
(b) Rises  
(c) May fall or may rise 
 
(d) Neither falls nor rises 
 
4. When marginal product rises, total product (1) 
(Choose the correct alternative)  
(a) Fall 
(b) Rises 
(c) Can rise or can fall 
(d) Remains constant   
 
5. Distinguish between microeconomics and macroeconomics. Give an example of each. (3) 
OR 
What does production possibilities curve show? Can it shift? When? 
 
6. State any three determinants of individual demand other than own price of the good.  (3) 
 
7. Comment upon the shape of the demand curve if the price of a commodity rises by 
10% and there is no change in its quantity demanded. (4) 
 
8. What is revenue in microeconomics? State the relation between marginal revenue and 
average revenue under perfect competition, using suitable diagram or schedule. (4) 
OR 
Define supply. Distinguish between “increases in supply” and “extension in supply”. 
 
9. What is ‘price floor’? Explain its implications. (4) 
 
10. A consumer consumes only two goods X and Y. Explain the conditions of consumer’s 
equilibrium using utility analysis. (6) 
OR 
State and explain three properties of indifference curves. 
 
11. Explain the law of variable proportions with the help of total product curve. Use 
diagram. (6) 
 
12. State and discuss four characteristics of perfect competition. (6)  
 
SECTION B 
 
13. With a rise in real national income, welfare of the people (1) 
(Choose the correct alternative) 
(a) Rises  
(b) Falls  
(c) Remains unchanged  
(d) None of the above 
Page 3


 
CBSE 
Class XII Economics 
All India Board Paper Set 1 – 2018 
 
Time: 3 hrs. Max. Marks: 80 
 
Note:  
? Please check that this question paper contains 11 printed pages. 
? Code number given on the right hand side of the question paper should be written on the 
title page of the answer-book by the candidate.  
? Please check that this question paper contains 24 questions. 
? Please write down the Serial Number of the question before attempting it. 
? 15 minutes time has been allotted to read this question paper. The question paper will be 
distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the 
question paper only and will not write any answer on the answer-book during this 
period. 
  
General Instructions: 
(i) All questions in both the sections are compulsory.  
(ii) Marks for questions are indicated against each question. 
(iii) Questions No. 1 – 4 and 13 – 16 are very short-answer questions carrying 1 mark 
each. They are required to be answered in one sentence. 
(iv) Questions No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks each. 
Answers to them should normally not exceed 60 words each. 
(v) Questions No. 7 – 9 and 19 – 21 are also short answer questions carrying 4 marks 
each. Answers to them should normally not exceed 70 words each. 
(vi) Question number 10 – 12 and 22 – 24 are long-answer questions carrying 6 marks 
each. Answers to them should normally 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. 
 
SECTION A 
 
1. What do you mean by the problem of scarcity? (1) 
 
2. Define cost.                                                                                                                                            (1) 
 
3. When average cost falls, marginal cost                                                                                        (1) 
(Choose the correct alternative) 
(a) Falls  
(b) Rises  
(c) May fall or may rise 
 
(d) Neither falls nor rises 
 
4. When marginal product rises, total product (1) 
(Choose the correct alternative)  
(a) Fall 
(b) Rises 
(c) Can rise or can fall 
(d) Remains constant   
 
5. Distinguish between microeconomics and macroeconomics. Give an example of each. (3) 
OR 
What does production possibilities curve show? Can it shift? When? 
 
6. State any three determinants of individual demand other than own price of the good.  (3) 
 
7. Comment upon the shape of the demand curve if the price of a commodity rises by 
10% and there is no change in its quantity demanded. (4) 
 
8. What is revenue in microeconomics? State the relation between marginal revenue and 
average revenue under perfect competition, using suitable diagram or schedule. (4) 
OR 
Define supply. Distinguish between “increases in supply” and “extension in supply”. 
 
9. What is ‘price floor’? Explain its implications. (4) 
 
10. A consumer consumes only two goods X and Y. Explain the conditions of consumer’s 
equilibrium using utility analysis. (6) 
OR 
State and explain three properties of indifference curves. 
 
11. Explain the law of variable proportions with the help of total product curve. Use 
diagram. (6) 
 
12. State and discuss four characteristics of perfect competition. (6)  
 
SECTION B 
 
13. With a rise in real national income, welfare of the people (1) 
(Choose the correct alternative) 
(a) Rises  
(b) Falls  
(c) Remains unchanged  
(d) None of the above 
 
 
14. If ‘legal reserve ratio’ is 20%, what will be the value of money multiplier? (1) 
 
15. Which of the following is not the function of the central bank? 
(Choose the correct alternatives) 
(a) Banking facilities to government 
(b) Banking facilities to public  
(c) Lending to government  
(d) Lending to commercial banks (1) 
 
16.  If the value of average propensity to consume is given as 0.75, the value of average 
propensity to save would be ______________. (1) 
 
17. Which among the following are capital goods and which are consumer goods and why?(3) 
(a) A car used as a taxi 
(b) Refrigerator in a hotel   
(c) Air-conditioner in a house 
OR 
Define intermediate consumption and explain it with an example. How is it different 
from final consumption? 
 
18. If a consumption function of a hypothetical economy is given as  
C = 100 + 0.6 Y, then 
(i) What will be the values of marginal propensity to Consume and marginal 
propensity to save for the economy?  
(ii) Write the corresponding saving functions.  (3) 
 
19. Discuss the meaning of any two methods of controlling credit which may be adopted 
by the central bank. (4) 
OR 
Explain the ‘bank of issue’ function of the central bank. 
 
20. Explain the national income determination in an economy using saving and investment 
approach. Use diagram. (4) 
 
21. What is investment multiplier? Explain its working using a suitable numerical example.(4) 
 
22. Explain the distinction between the following : (6) 
(a) Revenue expenditure and Capital expenditure in a government budget 
(b) Primary deficit and Fiscal deficit 
OR 
Explain the distinction between Revenue receipts and Capital receipts in a government 
budget. Given their components. 
Page 4


 
CBSE 
Class XII Economics 
All India Board Paper Set 1 – 2018 
 
Time: 3 hrs. Max. Marks: 80 
 
Note:  
? Please check that this question paper contains 11 printed pages. 
? Code number given on the right hand side of the question paper should be written on the 
title page of the answer-book by the candidate.  
? Please check that this question paper contains 24 questions. 
? Please write down the Serial Number of the question before attempting it. 
? 15 minutes time has been allotted to read this question paper. The question paper will be 
distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the 
question paper only and will not write any answer on the answer-book during this 
period. 
  
General Instructions: 
(i) All questions in both the sections are compulsory.  
(ii) Marks for questions are indicated against each question. 
(iii) Questions No. 1 – 4 and 13 – 16 are very short-answer questions carrying 1 mark 
each. They are required to be answered in one sentence. 
(iv) Questions No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks each. 
Answers to them should normally not exceed 60 words each. 
(v) Questions No. 7 – 9 and 19 – 21 are also short answer questions carrying 4 marks 
each. Answers to them should normally not exceed 70 words each. 
(vi) Question number 10 – 12 and 22 – 24 are long-answer questions carrying 6 marks 
each. Answers to them should normally 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. 
 
SECTION A 
 
1. What do you mean by the problem of scarcity? (1) 
 
2. Define cost.                                                                                                                                            (1) 
 
3. When average cost falls, marginal cost                                                                                        (1) 
(Choose the correct alternative) 
(a) Falls  
(b) Rises  
(c) May fall or may rise 
 
(d) Neither falls nor rises 
 
4. When marginal product rises, total product (1) 
(Choose the correct alternative)  
(a) Fall 
(b) Rises 
(c) Can rise or can fall 
(d) Remains constant   
 
5. Distinguish between microeconomics and macroeconomics. Give an example of each. (3) 
OR 
What does production possibilities curve show? Can it shift? When? 
 
6. State any three determinants of individual demand other than own price of the good.  (3) 
 
7. Comment upon the shape of the demand curve if the price of a commodity rises by 
10% and there is no change in its quantity demanded. (4) 
 
8. What is revenue in microeconomics? State the relation between marginal revenue and 
average revenue under perfect competition, using suitable diagram or schedule. (4) 
OR 
Define supply. Distinguish between “increases in supply” and “extension in supply”. 
 
9. What is ‘price floor’? Explain its implications. (4) 
 
10. A consumer consumes only two goods X and Y. Explain the conditions of consumer’s 
equilibrium using utility analysis. (6) 
OR 
State and explain three properties of indifference curves. 
 
11. Explain the law of variable proportions with the help of total product curve. Use 
diagram. (6) 
 
12. State and discuss four characteristics of perfect competition. (6)  
 
SECTION B 
 
13. With a rise in real national income, welfare of the people (1) 
(Choose the correct alternative) 
(a) Rises  
(b) Falls  
(c) Remains unchanged  
(d) None of the above 
 
 
14. If ‘legal reserve ratio’ is 20%, what will be the value of money multiplier? (1) 
 
15. Which of the following is not the function of the central bank? 
(Choose the correct alternatives) 
(a) Banking facilities to government 
(b) Banking facilities to public  
(c) Lending to government  
(d) Lending to commercial banks (1) 
 
16.  If the value of average propensity to consume is given as 0.75, the value of average 
propensity to save would be ______________. (1) 
 
17. Which among the following are capital goods and which are consumer goods and why?(3) 
(a) A car used as a taxi 
(b) Refrigerator in a hotel   
(c) Air-conditioner in a house 
OR 
Define intermediate consumption and explain it with an example. How is it different 
from final consumption? 
 
18. If a consumption function of a hypothetical economy is given as  
C = 100 + 0.6 Y, then 
(i) What will be the values of marginal propensity to Consume and marginal 
propensity to save for the economy?  
(ii) Write the corresponding saving functions.  (3) 
 
19. Discuss the meaning of any two methods of controlling credit which may be adopted 
by the central bank. (4) 
OR 
Explain the ‘bank of issue’ function of the central bank. 
 
20. Explain the national income determination in an economy using saving and investment 
approach. Use diagram. (4) 
 
21. What is investment multiplier? Explain its working using a suitable numerical example.(4) 
 
22. Explain the distinction between the following : (6) 
(a) Revenue expenditure and Capital expenditure in a government budget 
(b) Primary deficit and Fiscal deficit 
OR 
Explain the distinction between Revenue receipts and Capital receipts in a government 
budget. Given their components. 
 
 
23. Define fixed exchange rate. How is the exchange rate determined in a flexible exchange 
rate system? (2,4) 
 
24. Calculate (a) Gross domestic product at market price, and (b) National income:  (3,3) 
  (` in crores) 
(i) Government final consumption expenditure 4,000 
(ii) Private final consumption expenditure 3,500 
(iii) Gross domestic capital formation 1,100 
(iv) Net exports 500 
(v) Net factor income from abroad 100 
(vi) Net indirect taxes  300 
(vii) Subsidies  40 
(viii) Change in stock  80 
(ix) Consumption of fixed capital  120 
 
Page 5


 
CBSE 
Class XII Economics 
All India Board Paper Set 1 – 2018 
 
Time: 3 hrs. Max. Marks: 80 
 
Note:  
? Please check that this question paper contains 11 printed pages. 
? Code number given on the right hand side of the question paper should be written on the 
title page of the answer-book by the candidate.  
? Please check that this question paper contains 24 questions. 
? Please write down the Serial Number of the question before attempting it. 
? 15 minutes time has been allotted to read this question paper. The question paper will be 
distributed at 10.15 a.m. From 10.15 a.m. to 10.30 a.m., the students will read the 
question paper only and will not write any answer on the answer-book during this 
period. 
  
General Instructions: 
(i) All questions in both the sections are compulsory.  
(ii) Marks for questions are indicated against each question. 
(iii) Questions No. 1 – 4 and 13 – 16 are very short-answer questions carrying 1 mark 
each. They are required to be answered in one sentence. 
(iv) Questions No. 5 – 6 and 17 – 18 are short answer questions carrying 3 marks each. 
Answers to them should normally not exceed 60 words each. 
(v) Questions No. 7 – 9 and 19 – 21 are also short answer questions carrying 4 marks 
each. Answers to them should normally not exceed 70 words each. 
(vi) Question number 10 – 12 and 22 – 24 are long-answer questions carrying 6 marks 
each. Answers to them should normally 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. 
 
SECTION A 
 
1. What do you mean by the problem of scarcity? (1) 
 
2. Define cost.                                                                                                                                            (1) 
 
3. When average cost falls, marginal cost                                                                                        (1) 
(Choose the correct alternative) 
(a) Falls  
(b) Rises  
(c) May fall or may rise 
 
(d) Neither falls nor rises 
 
4. When marginal product rises, total product (1) 
(Choose the correct alternative)  
(a) Fall 
(b) Rises 
(c) Can rise or can fall 
(d) Remains constant   
 
5. Distinguish between microeconomics and macroeconomics. Give an example of each. (3) 
OR 
What does production possibilities curve show? Can it shift? When? 
 
6. State any three determinants of individual demand other than own price of the good.  (3) 
 
7. Comment upon the shape of the demand curve if the price of a commodity rises by 
10% and there is no change in its quantity demanded. (4) 
 
8. What is revenue in microeconomics? State the relation between marginal revenue and 
average revenue under perfect competition, using suitable diagram or schedule. (4) 
OR 
Define supply. Distinguish between “increases in supply” and “extension in supply”. 
 
9. What is ‘price floor’? Explain its implications. (4) 
 
10. A consumer consumes only two goods X and Y. Explain the conditions of consumer’s 
equilibrium using utility analysis. (6) 
OR 
State and explain three properties of indifference curves. 
 
11. Explain the law of variable proportions with the help of total product curve. Use 
diagram. (6) 
 
12. State and discuss four characteristics of perfect competition. (6)  
 
SECTION B 
 
13. With a rise in real national income, welfare of the people (1) 
(Choose the correct alternative) 
(a) Rises  
(b) Falls  
(c) Remains unchanged  
(d) None of the above 
 
 
14. If ‘legal reserve ratio’ is 20%, what will be the value of money multiplier? (1) 
 
15. Which of the following is not the function of the central bank? 
(Choose the correct alternatives) 
(a) Banking facilities to government 
(b) Banking facilities to public  
(c) Lending to government  
(d) Lending to commercial banks (1) 
 
16.  If the value of average propensity to consume is given as 0.75, the value of average 
propensity to save would be ______________. (1) 
 
17. Which among the following are capital goods and which are consumer goods and why?(3) 
(a) A car used as a taxi 
(b) Refrigerator in a hotel   
(c) Air-conditioner in a house 
OR 
Define intermediate consumption and explain it with an example. How is it different 
from final consumption? 
 
18. If a consumption function of a hypothetical economy is given as  
C = 100 + 0.6 Y, then 
(i) What will be the values of marginal propensity to Consume and marginal 
propensity to save for the economy?  
(ii) Write the corresponding saving functions.  (3) 
 
19. Discuss the meaning of any two methods of controlling credit which may be adopted 
by the central bank. (4) 
OR 
Explain the ‘bank of issue’ function of the central bank. 
 
20. Explain the national income determination in an economy using saving and investment 
approach. Use diagram. (4) 
 
21. What is investment multiplier? Explain its working using a suitable numerical example.(4) 
 
22. Explain the distinction between the following : (6) 
(a) Revenue expenditure and Capital expenditure in a government budget 
(b) Primary deficit and Fiscal deficit 
OR 
Explain the distinction between Revenue receipts and Capital receipts in a government 
budget. Given their components. 
 
 
23. Define fixed exchange rate. How is the exchange rate determined in a flexible exchange 
rate system? (2,4) 
 
24. Calculate (a) Gross domestic product at market price, and (b) National income:  (3,3) 
  (` in crores) 
(i) Government final consumption expenditure 4,000 
(ii) Private final consumption expenditure 3,500 
(iii) Gross domestic capital formation 1,100 
(iv) Net exports 500 
(v) Net factor income from abroad 100 
(vi) Net indirect taxes  300 
(vii) Subsidies  40 
(viii) Change in stock  80 
(ix) Consumption of fixed capital  120 
 
 
CBSE 
Class XII Economics (Re-exam) 
All India Board Paper Set 1 – 2018 Solution 
 
SECTION A 
1. Problem of scarcity means the situation wherein demand for resources is greater 
than the availability of resources in an economy.  
2. Cost refers to the expenditure incurred by a producer on factors of production such 
as purchase of plant and machinery and cost of hiring labour. 
3. Option c is the correct answer. When average cost falls, marginal cost may fall or 
may rise.  
4. Option b is the correct answer. When marginal product rises, total product rises. 
5. Difference between Microeconomics and Macroeconomics 
Microeconomics Macroeconomics 
Studies the behaviour of individuals. Studies the behaviour of the economy 
as a whole. 
Deals with the determination of prices 
and quantities of goods and services in 
the individual market. 
Deals with the determination of the 
aggregate price level and the 
quantities of goods and services in an 
economy. 
Example-Individual demand, individual 
supply, rent, wages, profit and price are 
main variables. 
Example-Inflation, aggregate 
demand, aggregate supply and 
employment level are main  
variables. 
OR 
A production possibility curve is a curve indicating various possibilities of two 
goods which can be produced by using available resources and the given level of 
technology. It shows that all the available resources and technology are optimally 
utilised if a country is producing maximum goods and services. 
 
Yes, a production possibility curve can shift. It can shift under following scenarios. 
i. When there is a change in availability of resources- Production 
Possibility Curve (PPC) shifts to the right when there is an increase in 
availability of resources. On the other hand, when there is a decrease in 
availability of resources, Production Possibility Curve (PPC) shifts to the 
left.  
ii. When there is a change in technology level- Production Possibility Curve 
(PPC) shifts to the right when there is an advancement of technology. In 
case of deterioration of technology, PPC shifts to the left. 
 
6. The following are the determinants of individual demand: