Class 11 Economics: CBSE Sample Question Papers- Term II (2021-22)- 2 | Sample Papers for Class 11 Commerce PDF Download

General Instructions:

• This is a subjective question paper containing 13 questions.
• This paper contains 5 questions of 2 marks each, 5 questions of 3 marks each and 3 questions of 5 marks each.
• Sections A: 2 marks questions are Short Answer Type Questions-Answer them in 30-50 words.
• Sections B: 3 marks questions are Short Answer Type Questions-Answer them in 50-80 words
• Sections C: 5 marks questions are Long Answer Type Questions-Answer them in 80-120 words
• This question paper contains Case/Source Based Questions.

Q.1. State the relationship between total cost and marginal cost.

(i) When MC is diminishing, TC increases at a diminishing rate.

(ii) When MC is rising, TC increases at an increasing rate.

(iii) When MC is constant, TC increases at a constant rate.

OR

Comment on the shape of the MR curve in case the TR curve is a:
(i) Positively sloped straight line passing through the origin.
(ii) Horizontal line.

(i) When TR curve is a positively sloped straight line passing through the origin, MR curve will be a horizontal straight line parallel to X–axis.

(ii) When TR curve is a horizontal line, MR curve will touch X–axis, i.e., MR will be zero (0), because addition to TR (which is MR) will be zero in this case.

Q.2. What is difference between price index and quantity index number?

Price index measures the changes in the price level whereas quantity index measures the changes in the quantity level.

Q.3. Discuss in brief, any one consequence of imposition of floor price.

(i) Surpluses: The quantity actually brought and supplied will shrink as a direct consequence of price flooring, as a result, a part of producer’s stock will remain unsold.
(ii) Buffer Stock: In order to maintain the support price, the government may design some programmes to enable producers to dispose of their surplus stocks. One such programme can take the form of buffer stock. Government may purchase the surplus to store or sell it at subsidised prices. Subsidy is required to lower the price and make it competitive in the market. Government may also use it as aid and send it to other countries.

Q.4. List any five characteristics of an ideal measure of dispersion.

An ideal measure of dispersion should possess the following characteristics:

(i) It should be simple to understand.

(ii) It should be easy to calculate.

(iii) It should be based on all the observations of the series.

(iv) It should be rigidly defined.

(v) It should be suited for further algebraic treatment.

OR

Which measure of dispersion is the best and how?

Standard deviation is considered to be the best measure of dispersion and is therefore, the most widely used measure of dispersion.

(i) It is based on all values and thus, provides information about the complete series. Because of this reason, a change in even one value affects the value of standard deviation.

(ii) It is independent of origin but not of scale.

Q.5. Compute coefficient of correlation from the following data:

Sum of products of deviation of X and Y-series from their respective mean is 20. Number of pairs of observations is 10.

Given,

Q.6. What does a consumer price index for industrial workers measure?

A Consumer Price Index for Industrial Workers measures the impact of changes in the retail prices on the cost of living of industrial workers. In a country like India, CPI for industrial workers is estimated and published by the Labour Bureau, Shimla taking 1982 as the base year for the current series. In India, CPI for industrial workers is the most popular index and is used by the government to regulate Dearness Allowance (D.A.) to compensate its employees against the price rise. The weight schemes in CPI for Industrial Workers include food, pan, supari, tobacco, fuel and lighting, housing, clothing, and miscellaneous expenses. Food being the most important component has the highest weight. Thus, it implies that the food price changes have a significant impact on the CPI.

OR

Given the following data:

Comment on the relative values of the Index numbers. Are they comparable?

(i) (a) The values of CPI of industrial workers with base year 1982 are largest and the values of WPI are least for the whole period from 1993–96 to 2003–04.

(b) There were many ups and downs in the CPI of non-manual employees.

(c) There were many ups and downs in the CPI of agricultural labourers.

(ii) The index numbers are not comparable because of the following reasons:

(a) Base periods are different.

(b) Commodities for different index numbers may be different.

(c) The weightage given to different index numbers of different commodities may vary from one index number to another.

Q7. Write the merits and demerits of scatter diagram. 

Merits of Scatter Diagram:

(i) It is simple and a non-mathematical method of studying correlation between two variables.

(ii) It can be easily understood and interpreted.

(iii) It is not influenced by the size of extreme values.

Demerits of Scatter Diagram:

(i) It is only a qualitative expression rather than a quantitative expression.

(ii) It gives only a broad and rough idea of the degree and nature of correlation between two variables.

(iii) This method does not indicate the exact numerical value of correlation.

Read this passage below and answer Q. 8.  that follow.

The slope of a total revenue curve is particularly important. It equals the change in the vertical axis (total revenue) divided by the change in the horizontal axis (quantity) between any two points. The slope measure the rate which total revenue increases as output increase. We can think of it as the increase in total revenue associated with a 1-unit increase in output. The increase in total revenue from a 1-unit increase in quantity is marginal revenue. Thus marginal revenue (MR) equals the slope of the total revenue curve. How much additional revenue does a radish producer gain from selling one more pound of radishes? The answer, of course, is the market price of 1 pound. Marginal revenue equals the market price. Because the market price is not affected by the output choice of a single firm, the marginal revenue the firm gains by producing one more unit is always the market price. The marginal revenue curve shows the relationship between marginal revenue and the quantity a firm produces. For a perfectly competitive firm, the marginal revenue curve is a horizontal line at the market price.  If the market price of a pound of radishes is $0.40, then the marginal revenue is $0.40. Marginal revenue curves for prices of $0.20, $0.40, and $0.60. In perfect competition, a firm’s marginal revenue curve is a horizontal line at the market price. Price also equals average revenue, which is total revenue divided by quantity. To obtain average revenue (AR), we divide total revenue by quantity,

Q.8.  Because total revenue equals price (P) times quantity (Q), dividing by quantity leaves us with price.

What change will take place in marginal revenue when :

(i) Total Revenue increases at an increasing rate.

(ii) Total Revenue increases at a diminishing rate.

(i) When total revenue increase at an increasing rate, marginal revenue should be increasing. 

(ii) When total revenue increases at a diminishing rate, marginal revenue should be diminishing.

Q.9. Explain the concept of price discrimination under monopoly form of market.

Price discrimination happens when a firm charges a different price from different groups of consumers for an identical good or service, for reasons not associated with costs of supply.

Price discrimination takes us away from the standard assumption in that there is a single profitmaximising price for the same good or services.

For e .g. – The senior citizen discount on the train berths. Student discount in the Science Museum.

Q.10. The equilibrium market wage rate is Rs. 14,000 per month. The government finding it low fixes minimum wage rate at Rs. 18,000 per month. Examine the implications of this decision. Use diagram.

Payment of wage rate (Rs. 18,000) higher than equilibrium wage rate (` 14,000) leads to excess supply of labour as shown in the diagram, equal to AB. Since supply is greater than demand, it may lead to unemployment equal to AB.

Q.11. Explain the distinction between “decrease in supply ” and “contraction in supply ”. Use diagram.

“Contraction in Supply” means fall in quantity supplied due to fall in price of the good only, other factors remaining unchanged. For example, fall in supply from OQ1 to OQ2 is on account of fall in price from OP1 to OP2.

Reason for contraction in supply – Decrease in price of the commodity Other name – Downward movement along the supply curve. “Decrease in Supply” means fall in supply due to factor other than the price of the good. For example, fall in supply from OQ1 to OQ2 is at the same price. It means that some other factor has caused this price change.

Reason for decrease in supply:

Industrial Dispute: They lead to loss in the production of goods, leading to fall in supply and rise in prices.

Shortage of factors of production: This takes place when economy functions at full employment or close to full employment level and production of goods and services decreases.

Natural calamities: Floods, droughts, etc. greatly affect the supplies of agricultural goods and products. Shortage of food products and their raw materials, lead to the reduction of industrial goods and it also raises the production cost.

Hoarding of goods: Some traders hoard essential goods in order to earn more profit. It leads to artificial scarcity of goods in the market and also puts a lot of inflationary pressure.

12. (a) Calculate the Standard Deviation from the following data by step deviation method.

(a)

(b) Write four uses of consumer price Index.

Utility / Uses of Index Numbers:

(i) Index Numbers make easy the difficult facts: Index Numbers present the complex facts into simple and understandable form. So many times index number measures such changes which may not be measured directly.

(ii) Index numbers make comparative study easy : Index Numbers show the facts represented in different units comparatively.

(iii) Helpful in measuring irregular changes: For example changes in prices are helpful in different circumstances.

(iv) Index Numbers studies the changes in general price level: Most important use of index number is that it measures the value of money during different periods of time.

OR

(a) Calculate the quartile deviation for the following distribution.

Calculation of cumulative frequency.

Here, N = 53
We know that,

Finding Q1: r = 1

Thus, Q1 lies in the interval 30 – 40.

 In this case, quartile class = 30 – 40

 l₁ = lower limit of the quartile class
= 30

l₂ = upper limit of the quartile class

= 40

f = frequency of the quartile class

= 3

c = cumulative frequency of the class preceding the quartile class

= 12

Now, by substituting these values in the formula we get:

Finding Q3:

Thus, Q3 lies in the interval 80 – 90.

In this case, 

quartile class = 80 – 90

 l₁ = lower limit of the quartile class

= 80

l₂ = upper limit of the quartile class

= 90

f = frequency of the quartile class

= 7

c = cumulative frequency of the class preceding the quartile class

= 38

Now, by substituting these values in the formula we get:

Finally, the quartile deviation

Hence, the quartile deviation of the given distribution is 24.167 (approximately).

Q.13. (a) Complete the following table :

(b) Explain the law of variable proportion with the help of a diagram.

The law of variable proportion states that as the quantity of factor increases while keeping the other factors constant the total product first increases with an increasing rate then increases with the decreasing rate and then diminishes.

Schedule-There are three stages of law of variable proportion.

(i) Stage I- Here, TP first increases with an increasing rate and MP and AP also increases up to a certain level. In the first phase there is better utilisation of fixed factor, increase in efficiency of variable factors and indivisibility of fixed factors.

(ii) Stage II- Here, TP increases with the diminishing rate and MP and AP both starts to fall. The reasons responsible for the diminishing return of factors are optimum combination of factors and imperfect substitute.

(iii)Stage III- Here, TP reduces and MP becomes negative and AP is also falling but is positive. The factors responsible for negative returns to factor are limitation of fixed factors, poor coordination between variable and fixed factors, decreasing efficiency of variable factors.