ICSE Economics Sample Paper with Solutions - 2025 | ICSE Humanities Class 12 Sample Papers PDF Download

 Page 1


 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
1 
 
 
 
 
ECONOMICS 
 
Maximum Marks: 80 
Time Allotted: Three Hours 
Reading Time: Additional Fifteen Minutes 
 
Instructions to Candidates 
? You are allowed additional fifteen minutes for only reading the question 
paper. 
? You must NOT start writing during reading time. 
? This question paper has 9 printed pages.   
? It is divided into three sections and has 13 questions in all. 
? All questions are compulsory. Answer all questions. 
? Section A has sixteen subparts which are very short answer questions.               
Each question carries 1 mark. 
? While attempting Multiple Choice Questions in Section A, you are 
required to write only ONE option as the answer. 
? Section B has eight questions which are short answer questions.                            
Each question carries 4 marks. 
? Section C has four questions which are long answer questions.                             
Each question carries 8 marks. 
? Internal choices have been provided in two questions in Section B and 
in one question in Section C. 
? The intended marks for questions are given in brackets [ ]. 
 
Instruction to Supervising Examiner 
? Kindly read aloud the Instructions given above to all the candidates 
present in the examination hall. 
 
 
 
 
Page 2


 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
1 
 
 
 
 
ECONOMICS 
 
Maximum Marks: 80 
Time Allotted: Three Hours 
Reading Time: Additional Fifteen Minutes 
 
Instructions to Candidates 
? You are allowed additional fifteen minutes for only reading the question 
paper. 
? You must NOT start writing during reading time. 
? This question paper has 9 printed pages.   
? It is divided into three sections and has 13 questions in all. 
? All questions are compulsory. Answer all questions. 
? Section A has sixteen subparts which are very short answer questions.               
Each question carries 1 mark. 
? While attempting Multiple Choice Questions in Section A, you are 
required to write only ONE option as the answer. 
? Section B has eight questions which are short answer questions.                            
Each question carries 4 marks. 
? Section C has four questions which are long answer questions.                             
Each question carries 8 marks. 
? Internal choices have been provided in two questions in Section B and 
in one question in Section C. 
? The intended marks for questions are given in brackets [ ]. 
 
Instruction to Supervising Examiner 
? Kindly read aloud the Instructions given above to all the candidates 
present in the examination hall. 
 
 
 
 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
2 
SECTION A – 16 MARKS 
 
Question 1  
(i)  
 
 
 
 
 
 
 
 
 
 
 
Points K and T will NOT be attained by the consumer. Select the reason                      
from the options given below.                                              (Understanding) 
[1] 
 (a) K does not lie on any IC and entire money is not spent at T.  
 (b) K is beyond the financial capacity of the consumer and T provides a 
lower level of satisfaction. 
 
 (c) Equilibrium should be unique and that is point E.  
 (d) K gives more of both the goods A and B and T gives less B.  
(ii) Utility maximising consumers would like to decrease the consumption 
when                                                                                     (Understanding) 
[1] 
 (a) MUx = Px  
 (b) MUx > Px  
 (c) MUx < Px  
 (d) MUx = Py  
(iii) 
 
  
 
 
 
 
With reference to the diagram shown above, select the reason for the 
movement from point M to N from the following options.            (Analysis) 
[1] 
Good A 
L 
E K 
IC 
T 
Good B O 
M 
D 
M Price 
D 
N 
Quantity 
Page 3


 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
1 
 
 
 
 
ECONOMICS 
 
Maximum Marks: 80 
Time Allotted: Three Hours 
Reading Time: Additional Fifteen Minutes 
 
Instructions to Candidates 
? You are allowed additional fifteen minutes for only reading the question 
paper. 
? You must NOT start writing during reading time. 
? This question paper has 9 printed pages.   
? It is divided into three sections and has 13 questions in all. 
? All questions are compulsory. Answer all questions. 
? Section A has sixteen subparts which are very short answer questions.               
Each question carries 1 mark. 
? While attempting Multiple Choice Questions in Section A, you are 
required to write only ONE option as the answer. 
? Section B has eight questions which are short answer questions.                            
Each question carries 4 marks. 
? Section C has four questions which are long answer questions.                             
Each question carries 8 marks. 
? Internal choices have been provided in two questions in Section B and 
in one question in Section C. 
? The intended marks for questions are given in brackets [ ]. 
 
Instruction to Supervising Examiner 
? Kindly read aloud the Instructions given above to all the candidates 
present in the examination hall. 
 
 
 
 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
2 
SECTION A – 16 MARKS 
 
Question 1  
(i)  
 
 
 
 
 
 
 
 
 
 
 
Points K and T will NOT be attained by the consumer. Select the reason                      
from the options given below.                                              (Understanding) 
[1] 
 (a) K does not lie on any IC and entire money is not spent at T.  
 (b) K is beyond the financial capacity of the consumer and T provides a 
lower level of satisfaction. 
 
 (c) Equilibrium should be unique and that is point E.  
 (d) K gives more of both the goods A and B and T gives less B.  
(ii) Utility maximising consumers would like to decrease the consumption 
when                                                                                     (Understanding) 
[1] 
 (a) MUx = Px  
 (b) MUx > Px  
 (c) MUx < Px  
 (d) MUx = Py  
(iii) 
 
  
 
 
 
 
With reference to the diagram shown above, select the reason for the 
movement from point M to N from the following options.            (Analysis) 
[1] 
Good A 
L 
E K 
IC 
T 
Good B O 
M 
D 
M Price 
D 
N 
Quantity 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
3 
 (a) Increase in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (b) Increase in the real income of the consumer and fall in relative price 
of the commodity. 
 
 (c) Decrease in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (d) Decrease in the real income of the consumer and fall in relative price 
of the commodity. 
 
(iv) 
Naseer is planning to buy a car for his family. Observe the image shown 
below and select the MOST rational reaction of Naseer.         (Application) 
 
[1] 
 (a) Naseer will not change his decision to buy a car.  
 (b) He will postpone his plan to buy a car.  
 (c) Naseer will become indecisive.   
 (d) He will decide to purchase two cars instead of one.  
(v) 
Which one of the following statements is CORRECT with reference to 
government budget?                                                                  (Application) 
[1] 
 (a) Interest paid on government’s borrowing reduces liability of the 
government.  
 
 (b) Financial aid received from the World Bank for cyclone affected 
areas is revenue receipt. 
 
 (c) Grants given by the central government to the state government is 
capital expenditure. 
 
 (d) Profits of BHEL, a PSU, increases the assets of the government.  
(vi) 
If the value of US Dollar increases continuously in terms of Yen, it will 
result in                                                                                 (Understanding) 
[1] 
 (a) more import from USA by Japan.  
 (b) more import from Japan by USA.  
Price of petrol 
Page 4


 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
1 
 
 
 
 
ECONOMICS 
 
Maximum Marks: 80 
Time Allotted: Three Hours 
Reading Time: Additional Fifteen Minutes 
 
Instructions to Candidates 
? You are allowed additional fifteen minutes for only reading the question 
paper. 
? You must NOT start writing during reading time. 
? This question paper has 9 printed pages.   
? It is divided into three sections and has 13 questions in all. 
? All questions are compulsory. Answer all questions. 
? Section A has sixteen subparts which are very short answer questions.               
Each question carries 1 mark. 
? While attempting Multiple Choice Questions in Section A, you are 
required to write only ONE option as the answer. 
? Section B has eight questions which are short answer questions.                            
Each question carries 4 marks. 
? Section C has four questions which are long answer questions.                             
Each question carries 8 marks. 
? Internal choices have been provided in two questions in Section B and 
in one question in Section C. 
? The intended marks for questions are given in brackets [ ]. 
 
Instruction to Supervising Examiner 
? Kindly read aloud the Instructions given above to all the candidates 
present in the examination hall. 
 
 
 
 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
2 
SECTION A – 16 MARKS 
 
Question 1  
(i)  
 
 
 
 
 
 
 
 
 
 
 
Points K and T will NOT be attained by the consumer. Select the reason                      
from the options given below.                                              (Understanding) 
[1] 
 (a) K does not lie on any IC and entire money is not spent at T.  
 (b) K is beyond the financial capacity of the consumer and T provides a 
lower level of satisfaction. 
 
 (c) Equilibrium should be unique and that is point E.  
 (d) K gives more of both the goods A and B and T gives less B.  
(ii) Utility maximising consumers would like to decrease the consumption 
when                                                                                     (Understanding) 
[1] 
 (a) MUx = Px  
 (b) MUx > Px  
 (c) MUx < Px  
 (d) MUx = Py  
(iii) 
 
  
 
 
 
 
With reference to the diagram shown above, select the reason for the 
movement from point M to N from the following options.            (Analysis) 
[1] 
Good A 
L 
E K 
IC 
T 
Good B O 
M 
D 
M Price 
D 
N 
Quantity 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
3 
 (a) Increase in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (b) Increase in the real income of the consumer and fall in relative price 
of the commodity. 
 
 (c) Decrease in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (d) Decrease in the real income of the consumer and fall in relative price 
of the commodity. 
 
(iv) 
Naseer is planning to buy a car for his family. Observe the image shown 
below and select the MOST rational reaction of Naseer.         (Application) 
 
[1] 
 (a) Naseer will not change his decision to buy a car.  
 (b) He will postpone his plan to buy a car.  
 (c) Naseer will become indecisive.   
 (d) He will decide to purchase two cars instead of one.  
(v) 
Which one of the following statements is CORRECT with reference to 
government budget?                                                                  (Application) 
[1] 
 (a) Interest paid on government’s borrowing reduces liability of the 
government.  
 
 (b) Financial aid received from the World Bank for cyclone affected 
areas is revenue receipt. 
 
 (c) Grants given by the central government to the state government is 
capital expenditure. 
 
 (d) Profits of BHEL, a PSU, increases the assets of the government.  
(vi) 
If the value of US Dollar increases continuously in terms of Yen, it will 
result in                                                                                 (Understanding) 
[1] 
 (a) more import from USA by Japan.  
 (b) more import from Japan by USA.  
Price of petrol 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
4 
 (c) more export of USA to Japan.  
 (d) 
less export of Japan to USA. 
 
(vii) 
Sometimes, a firm considers the action and reaction of its rival firms while 
determining its price and output levels. 
Which market form does such firm belong to?                                   (Recall) 
[1] 
 
(a) Perfect Competition 
 
 
(b) Monopoly 
 
 
(c) Monopolistic competition 
 
 
(d) Oligopoly 
 
(viii) Given below are two statements marked as Assertion and Reason. Read the 
statements carefully and choose the correct option.                        (Analysis) 
Assertion: A firm is able to sell more quantity of a commodity by reducing   
its price. 
Reason: As it sells additional units of the commodity at a lower price, the 
firm’s marginal revenue will be less than its average revenue.  
[1] 
 (a) Both Assertion and Reason are true and Reason is the correct 
explanation of Assertion. 
 
 (b) Both Assertion and Reason are true but Reason is not the correct 
explanation of Assertion. 
 
 (c) Assertion is true and Reason is false.  
 (d) Both Assertion and Reason are false.  
(ix) Given below are two statements marked as Assertion and Reason. Read the 
statements carefully and choose the correct option.                        (Analysis) 
Assertion: GST is a kind of Proportional tax. 
Reason: The tax rate remains same irrespective of the level of income of 
the people. 
[1] 
 (a) Both Assertion and Reason are true, and Reason is the correct 
explanation of Assertion. 
 
 (b) Both Assertion and Reason are true, but Reason is not the correct 
explanation of Assertion. 
 
 (c) Assertion is true and Reason is false.  
 (d) Both Assertion and Reason are false.  
(x) 
Oligopoly differs from monopolistic competition on the basis of number of 
sellers.  
State any other difference between these two market forms.             (Recall) 
[1] 
(xi) APC can be greater than one, but MPC is always less than one. Give a 
reason to justify this phenomenon.                                      (Understanding) 
[1] 
Page 5


 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
1 
 
 
 
 
ECONOMICS 
 
Maximum Marks: 80 
Time Allotted: Three Hours 
Reading Time: Additional Fifteen Minutes 
 
Instructions to Candidates 
? You are allowed additional fifteen minutes for only reading the question 
paper. 
? You must NOT start writing during reading time. 
? This question paper has 9 printed pages.   
? It is divided into three sections and has 13 questions in all. 
? All questions are compulsory. Answer all questions. 
? Section A has sixteen subparts which are very short answer questions.               
Each question carries 1 mark. 
? While attempting Multiple Choice Questions in Section A, you are 
required to write only ONE option as the answer. 
? Section B has eight questions which are short answer questions.                            
Each question carries 4 marks. 
? Section C has four questions which are long answer questions.                             
Each question carries 8 marks. 
? Internal choices have been provided in two questions in Section B and 
in one question in Section C. 
? The intended marks for questions are given in brackets [ ]. 
 
Instruction to Supervising Examiner 
? Kindly read aloud the Instructions given above to all the candidates 
present in the examination hall. 
 
 
 
 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
2 
SECTION A – 16 MARKS 
 
Question 1  
(i)  
 
 
 
 
 
 
 
 
 
 
 
Points K and T will NOT be attained by the consumer. Select the reason                      
from the options given below.                                              (Understanding) 
[1] 
 (a) K does not lie on any IC and entire money is not spent at T.  
 (b) K is beyond the financial capacity of the consumer and T provides a 
lower level of satisfaction. 
 
 (c) Equilibrium should be unique and that is point E.  
 (d) K gives more of both the goods A and B and T gives less B.  
(ii) Utility maximising consumers would like to decrease the consumption 
when                                                                                     (Understanding) 
[1] 
 (a) MUx = Px  
 (b) MUx > Px  
 (c) MUx < Px  
 (d) MUx = Py  
(iii) 
 
  
 
 
 
 
With reference to the diagram shown above, select the reason for the 
movement from point M to N from the following options.            (Analysis) 
[1] 
Good A 
L 
E K 
IC 
T 
Good B O 
M 
D 
M Price 
D 
N 
Quantity 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
3 
 (a) Increase in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (b) Increase in the real income of the consumer and fall in relative price 
of the commodity. 
 
 (c) Decrease in the real income of the consumer and rise in relative price 
of the commodity. 
 
 (d) Decrease in the real income of the consumer and fall in relative price 
of the commodity. 
 
(iv) 
Naseer is planning to buy a car for his family. Observe the image shown 
below and select the MOST rational reaction of Naseer.         (Application) 
 
[1] 
 (a) Naseer will not change his decision to buy a car.  
 (b) He will postpone his plan to buy a car.  
 (c) Naseer will become indecisive.   
 (d) He will decide to purchase two cars instead of one.  
(v) 
Which one of the following statements is CORRECT with reference to 
government budget?                                                                  (Application) 
[1] 
 (a) Interest paid on government’s borrowing reduces liability of the 
government.  
 
 (b) Financial aid received from the World Bank for cyclone affected 
areas is revenue receipt. 
 
 (c) Grants given by the central government to the state government is 
capital expenditure. 
 
 (d) Profits of BHEL, a PSU, increases the assets of the government.  
(vi) 
If the value of US Dollar increases continuously in terms of Yen, it will 
result in                                                                                 (Understanding) 
[1] 
 (a) more import from USA by Japan.  
 (b) more import from Japan by USA.  
Price of petrol 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
4 
 (c) more export of USA to Japan.  
 (d) 
less export of Japan to USA. 
 
(vii) 
Sometimes, a firm considers the action and reaction of its rival firms while 
determining its price and output levels. 
Which market form does such firm belong to?                                   (Recall) 
[1] 
 
(a) Perfect Competition 
 
 
(b) Monopoly 
 
 
(c) Monopolistic competition 
 
 
(d) Oligopoly 
 
(viii) Given below are two statements marked as Assertion and Reason. Read the 
statements carefully and choose the correct option.                        (Analysis) 
Assertion: A firm is able to sell more quantity of a commodity by reducing   
its price. 
Reason: As it sells additional units of the commodity at a lower price, the 
firm’s marginal revenue will be less than its average revenue.  
[1] 
 (a) Both Assertion and Reason are true and Reason is the correct 
explanation of Assertion. 
 
 (b) Both Assertion and Reason are true but Reason is not the correct 
explanation of Assertion. 
 
 (c) Assertion is true and Reason is false.  
 (d) Both Assertion and Reason are false.  
(ix) Given below are two statements marked as Assertion and Reason. Read the 
statements carefully and choose the correct option.                        (Analysis) 
Assertion: GST is a kind of Proportional tax. 
Reason: The tax rate remains same irrespective of the level of income of 
the people. 
[1] 
 (a) Both Assertion and Reason are true, and Reason is the correct 
explanation of Assertion. 
 
 (b) Both Assertion and Reason are true, but Reason is not the correct 
explanation of Assertion. 
 
 (c) Assertion is true and Reason is false.  
 (d) Both Assertion and Reason are false.  
(x) 
Oligopoly differs from monopolistic competition on the basis of number of 
sellers.  
State any other difference between these two market forms.             (Recall) 
[1] 
(xi) APC can be greater than one, but MPC is always less than one. Give a 
reason to justify this phenomenon.                                      (Understanding) 
[1] 
 
---------------------------------------------------------------------------------------------------------------- 
ISC SPECIMEN QUESTION PAPER 2025 
5 
(xii) If aggregate demand exceeds aggregate supply in a situation of full 
employment, what will be its impact on the economy?      (Understanding)                                                                                          
[1] 
(xiii) 
If autonomous payments are higher than autonomous receipts, how can 
BOP be brought into balance?                                          (Understanding)
    
[1] 
(xiv) 
Monopsony is regarded as a buyers’ market. Do you agree? Give a reason. 
                                                                                                        (Evaluate) 
   [1] 
(xv) 
Illustrate that Investment multiplier is inversely proportional to MPS. 
                                                                                              (Understanding) 
[1] 
(xvi) 
Cite one measure to overcome a deflationary gap.                                  (Recall) 
 
[1] 
SECTION B – 32 MARKS 
Question 2  
(i) 
Prices of air conditioners and refrigerators have shot up in the new year as 
consumer durables makers pass on the impact of rising raw material costs 
and higher freight charges to customers, while home appliances like 
washing machines may witness 5-10 per cent price hike later this month or 
by March.     
(Source: The Economic Times) 
Explain the behaviour of supply of this consumer durable. Illustrate the same 
in a diagram.                                                                          (Understanding)                                    
[2] 
(ii) If the price hike in the market is about 10% and this leads to the fall in the 
quantity demanded by 12%, calculate the price elasticity of demand. 
Mention the degree of price elasticity of demand.                     (Application)                          
                                                                                                    
[2] 
 
 
Question 3  
(i) 
Union Finance Minister Mrs. Nirmala Sitharaman announced during her 
Budget speech that the Centre would reduce its fiscal deficit to 5.1% of 
gross GDP in 2024 – 25. (The present fiscal deficit is 5.8% of GDP.) 
(Source: Union budget 2024-25) 
What would be the impact of this decision on government borrowing? Why?   
(Understanding) 
[2] 
(ii) 
It is believed that increase in public expenditure leads to Inflation. Under 
what circumstances, may a government consider it prudent to increase 
public expenditure to control inflation?                                (Understanding) 
[2]