Class 12 Economics Official Sample Question Paper (2017-18) | Economics for Grade 12 PDF Download

 Page 1


Sample Question Paper 
Class XII (2017-18) 
Economics  (030) 
MM. 80                                                                                                                  Time: 3 Hours 
 
Q.No. SECTION A : MICROECONOMICS Marks 
1 Which of the following is a statement of normative nature in economics?  
a) Economics is study of choices/alternatives. 
b) Government should be concerned with how to reduce unemployment 
c) According to an estimate, in spite of severe shortage, more than 10% of houses 
in Indian cities are lying vacant. 
d) Accommodation of Refugees is posing a big problem for the Europe 
1 
2 Define Marginal Physical Product. 1 
3 A firm is operating with a Total Variable Cost of  500 when 5 units of the given 
output are produced and the Total Fixed Costs are  200, what will be the Average 
Total Cost of producing 5 units of output? 
i) 140          ii)  100     iii ) 120      iv) 300 
1 
4 In an imperfectly competitive market, if the Total Revenue is maximum, Marginal 
Revenue will be ...................... 
1 
5 State and discuss any two factors that will shift the Production Possibility Frontier 
(PPF)to the right.                                                      
Or 
Draft a hypothetical schedule for a straight line Production Possibility Curve. 
3 
6 Giving reason, state the impact of each of following on demand curve of a normal 
good ‘X’ if 
i) Price of its complementary good falls. 
ii) News reports claims that consumption of product X has harmful effect 
on human health. 
iii) Income of consumer increases,  
3 
7 a. Arrange the following coefficients of price elasticity of demand in ascending order: 
-0.87,  -0.53,  -3.1,  -0.80 
b. Comment upon the degree of elasticity of demand for commodity X,if the price of 
the commodity falls from  28 per unit to  23 per unit and its quantity demanded rises 
from 50 units to 100 units. 
1 
 
 
3 
8 What is meant by Price Floor? Discuss in brief, any one consequence of imposition of 
floor price above equilibrium price with help of a diagram. 
 .     Or 
How is the price of a commodity determined in a perfectly competitive market? 
Explain with help of a diagram. 
4 
 
 
 
9 Explain how the following factors affect the supply of the commodity (any two) 
    a) Price of factor inputs     b) State of technology          c) Government taxation 
Policy 
4 
10 a) A consumer, Mr Aman is in state of equilibrium consuming two goods X and Y, 
with given prices Px and Py . What will happen if ? 
b) Identify which of the following is not true for the Indifference Curves theory. Give 
valid reasons for choice of your answer:  
2 
 
 
4 
 
Page 2


Sample Question Paper 
Class XII (2017-18) 
Economics  (030) 
MM. 80                                                                                                                  Time: 3 Hours 
 
Q.No. SECTION A : MICROECONOMICS Marks 
1 Which of the following is a statement of normative nature in economics?  
a) Economics is study of choices/alternatives. 
b) Government should be concerned with how to reduce unemployment 
c) According to an estimate, in spite of severe shortage, more than 10% of houses 
in Indian cities are lying vacant. 
d) Accommodation of Refugees is posing a big problem for the Europe 
1 
2 Define Marginal Physical Product. 1 
3 A firm is operating with a Total Variable Cost of  500 when 5 units of the given 
output are produced and the Total Fixed Costs are  200, what will be the Average 
Total Cost of producing 5 units of output? 
i) 140          ii)  100     iii ) 120      iv) 300 
1 
4 In an imperfectly competitive market, if the Total Revenue is maximum, Marginal 
Revenue will be ...................... 
1 
5 State and discuss any two factors that will shift the Production Possibility Frontier 
(PPF)to the right.                                                      
Or 
Draft a hypothetical schedule for a straight line Production Possibility Curve. 
3 
6 Giving reason, state the impact of each of following on demand curve of a normal 
good ‘X’ if 
i) Price of its complementary good falls. 
ii) News reports claims that consumption of product X has harmful effect 
on human health. 
iii) Income of consumer increases,  
3 
7 a. Arrange the following coefficients of price elasticity of demand in ascending order: 
-0.87,  -0.53,  -3.1,  -0.80 
b. Comment upon the degree of elasticity of demand for commodity X,if the price of 
the commodity falls from  28 per unit to  23 per unit and its quantity demanded rises 
from 50 units to 100 units. 
1 
 
 
3 
8 What is meant by Price Floor? Discuss in brief, any one consequence of imposition of 
floor price above equilibrium price with help of a diagram. 
 .     Or 
How is the price of a commodity determined in a perfectly competitive market? 
Explain with help of a diagram. 
4 
 
 
 
9 Explain how the following factors affect the supply of the commodity (any two) 
    a) Price of factor inputs     b) State of technology          c) Government taxation 
Policy 
4 
10 a) A consumer, Mr Aman is in state of equilibrium consuming two goods X and Y, 
with given prices Px and Py . What will happen if ? 
b) Identify which of the following is not true for the Indifference Curves theory. Give 
valid reasons for choice of your answer:  
2 
 
 
4 
 
a. Lower indifference curve represents lower level of satisfaction. 
b. Two indifference curves can intersect each other. 
c. Indifference curve must be convex to origin at the point of tangency with 
the budget line at the consumer’s equilibrium.  
d. Indifference curves are drawn under the ordinal approach to consumer 
equilibrium. 
OR 
A consumer has total money income of  500 to be spent on two goods X and Y with 
prices of  50 and  10 per unit respectively. On the basis of the given information, 
answer the following questions: 
a. Give the equation of the budget line for the consumer. 
b. What is the value of slope of the budget line? 
c. How many units can the consumer buy if he is to spend all his money 
income on good X? 
d. How does the budget line change if there is a 50% fall in price of good Y?     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
1 
 
2 
 
2 
11 a) Why is Total Variable Cost curve inverse S- shaped? 
b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a 
rectangular Hyperbola? Explain with help of a diagram. 
 
2 
4 
12 Suppose the value of demand and supply curves of a Commodity-X  is given by the 
following two equations simultaneously: 
  Qd = 200 –10p    Qs = 50 + 15p 
i) Find the equilibrium price and equilibrium quantity of commodity X.
     
ii) Suppose that the price of a factor inputs used in producing the 
commodity has changed, resulting in the new supply curve given by the 
equation  
Qs’ = 100 + 15p    
Analyse the new equilibrium price and new equilibrium quantity as 
against the original equilibrium price and equilibrium quantity. 
    
6 
  
SECTION B : MACROECONOMICS 
 
 
13 Define money supply? 
 
1 
14 State one fiscal measure that can be used to reduce the gap between rich and poor. 
 
1 
15 Define the capital receipts of a government. 
 
1 
Page 3


Sample Question Paper 
Class XII (2017-18) 
Economics  (030) 
MM. 80                                                                                                                  Time: 3 Hours 
 
Q.No. SECTION A : MICROECONOMICS Marks 
1 Which of the following is a statement of normative nature in economics?  
a) Economics is study of choices/alternatives. 
b) Government should be concerned with how to reduce unemployment 
c) According to an estimate, in spite of severe shortage, more than 10% of houses 
in Indian cities are lying vacant. 
d) Accommodation of Refugees is posing a big problem for the Europe 
1 
2 Define Marginal Physical Product. 1 
3 A firm is operating with a Total Variable Cost of  500 when 5 units of the given 
output are produced and the Total Fixed Costs are  200, what will be the Average 
Total Cost of producing 5 units of output? 
i) 140          ii)  100     iii ) 120      iv) 300 
1 
4 In an imperfectly competitive market, if the Total Revenue is maximum, Marginal 
Revenue will be ...................... 
1 
5 State and discuss any two factors that will shift the Production Possibility Frontier 
(PPF)to the right.                                                      
Or 
Draft a hypothetical schedule for a straight line Production Possibility Curve. 
3 
6 Giving reason, state the impact of each of following on demand curve of a normal 
good ‘X’ if 
i) Price of its complementary good falls. 
ii) News reports claims that consumption of product X has harmful effect 
on human health. 
iii) Income of consumer increases,  
3 
7 a. Arrange the following coefficients of price elasticity of demand in ascending order: 
-0.87,  -0.53,  -3.1,  -0.80 
b. Comment upon the degree of elasticity of demand for commodity X,if the price of 
the commodity falls from  28 per unit to  23 per unit and its quantity demanded rises 
from 50 units to 100 units. 
1 
 
 
3 
8 What is meant by Price Floor? Discuss in brief, any one consequence of imposition of 
floor price above equilibrium price with help of a diagram. 
 .     Or 
How is the price of a commodity determined in a perfectly competitive market? 
Explain with help of a diagram. 
4 
 
 
 
9 Explain how the following factors affect the supply of the commodity (any two) 
    a) Price of factor inputs     b) State of technology          c) Government taxation 
Policy 
4 
10 a) A consumer, Mr Aman is in state of equilibrium consuming two goods X and Y, 
with given prices Px and Py . What will happen if ? 
b) Identify which of the following is not true for the Indifference Curves theory. Give 
valid reasons for choice of your answer:  
2 
 
 
4 
 
a. Lower indifference curve represents lower level of satisfaction. 
b. Two indifference curves can intersect each other. 
c. Indifference curve must be convex to origin at the point of tangency with 
the budget line at the consumer’s equilibrium.  
d. Indifference curves are drawn under the ordinal approach to consumer 
equilibrium. 
OR 
A consumer has total money income of  500 to be spent on two goods X and Y with 
prices of  50 and  10 per unit respectively. On the basis of the given information, 
answer the following questions: 
a. Give the equation of the budget line for the consumer. 
b. What is the value of slope of the budget line? 
c. How many units can the consumer buy if he is to spend all his money 
income on good X? 
d. How does the budget line change if there is a 50% fall in price of good Y?     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
1 
 
2 
 
2 
11 a) Why is Total Variable Cost curve inverse S- shaped? 
b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a 
rectangular Hyperbola? Explain with help of a diagram. 
 
2 
4 
12 Suppose the value of demand and supply curves of a Commodity-X  is given by the 
following two equations simultaneously: 
  Qd = 200 –10p    Qs = 50 + 15p 
i) Find the equilibrium price and equilibrium quantity of commodity X.
     
ii) Suppose that the price of a factor inputs used in producing the 
commodity has changed, resulting in the new supply curve given by the 
equation  
Qs’ = 100 + 15p    
Analyse the new equilibrium price and new equilibrium quantity as 
against the original equilibrium price and equilibrium quantity. 
    
6 
  
SECTION B : MACROECONOMICS 
 
 
13 Define money supply? 
 
1 
14 State one fiscal measure that can be used to reduce the gap between rich and poor. 
 
1 
15 Define the capital receipts of a government. 
 
1 
16 From the following data calculate Fiscal Deficit 
 
S.No Item • in Billions 
1 Capital Receipt 68 
2 Revenue Expenditure 160 
3 Interest Payment 20 
4 Borrowings 32 
5 Tax Revenue 50 
6 Non- Tax revenue 10 
 
1 
17 Estimate the value of ex-ante AD, when autonomous investment and consumption 
expenditure (A) is 50 crores, and MPS is 0.2 and level of income is 300 crores. 
Or 
Calculate Multiplier when MPC is and  . From the calculations establish the relation 
between size of Multiplier and size of MPC? 
3 
18 Discuss the significance of 45 degree line in Keynesian Economics. 3 
19 Elaborate ‘economic growth’ as objective of government budget. 4 
20 Use following information of an imaginary country: 
Year 2014 – 2015 2015– 2016 2016 - 2017 
Nominal 
GDP 
6.5 8.4 9 
GDP deflator 100 140 125 
i) For which year is real GDP and nominal GDP same and why?  
ii) Calculate Real GDP for the given years. Is there any year for which Real GDP falls?  
4 
21 How will ‘Reverse Repo Rate’ and ‘Open Market Operations’ control excess money 
supply in an economy?  
Or 
Illustrate with the help of a hypothetical numerical example the process of credit 
creation.  
4 
22 a) Define Externality.  
b) Find National Income from  following using expenditure method         
  • (in crores) 
1 Current transfers from rest of the world 50 
2 Net Indirect taxes 100 
3 Net Exports - 25 
4 Rent 90 
5 Private Final Consumption Expenditure 900 
6 Net Domestic Capital Formation 200 
7 Compensation of Employees 500 
8 Net Factor Income from Abroad - 10 
9 Government Final Consumption Expenditure 400 
10 Profit 220 
11 Mixed Income of Self Employed 400 
12  Interest 230 
2 
 
4 
Page 4


Sample Question Paper 
Class XII (2017-18) 
Economics  (030) 
MM. 80                                                                                                                  Time: 3 Hours 
 
Q.No. SECTION A : MICROECONOMICS Marks 
1 Which of the following is a statement of normative nature in economics?  
a) Economics is study of choices/alternatives. 
b) Government should be concerned with how to reduce unemployment 
c) According to an estimate, in spite of severe shortage, more than 10% of houses 
in Indian cities are lying vacant. 
d) Accommodation of Refugees is posing a big problem for the Europe 
1 
2 Define Marginal Physical Product. 1 
3 A firm is operating with a Total Variable Cost of  500 when 5 units of the given 
output are produced and the Total Fixed Costs are  200, what will be the Average 
Total Cost of producing 5 units of output? 
i) 140          ii)  100     iii ) 120      iv) 300 
1 
4 In an imperfectly competitive market, if the Total Revenue is maximum, Marginal 
Revenue will be ...................... 
1 
5 State and discuss any two factors that will shift the Production Possibility Frontier 
(PPF)to the right.                                                      
Or 
Draft a hypothetical schedule for a straight line Production Possibility Curve. 
3 
6 Giving reason, state the impact of each of following on demand curve of a normal 
good ‘X’ if 
i) Price of its complementary good falls. 
ii) News reports claims that consumption of product X has harmful effect 
on human health. 
iii) Income of consumer increases,  
3 
7 a. Arrange the following coefficients of price elasticity of demand in ascending order: 
-0.87,  -0.53,  -3.1,  -0.80 
b. Comment upon the degree of elasticity of demand for commodity X,if the price of 
the commodity falls from  28 per unit to  23 per unit and its quantity demanded rises 
from 50 units to 100 units. 
1 
 
 
3 
8 What is meant by Price Floor? Discuss in brief, any one consequence of imposition of 
floor price above equilibrium price with help of a diagram. 
 .     Or 
How is the price of a commodity determined in a perfectly competitive market? 
Explain with help of a diagram. 
4 
 
 
 
9 Explain how the following factors affect the supply of the commodity (any two) 
    a) Price of factor inputs     b) State of technology          c) Government taxation 
Policy 
4 
10 a) A consumer, Mr Aman is in state of equilibrium consuming two goods X and Y, 
with given prices Px and Py . What will happen if ? 
b) Identify which of the following is not true for the Indifference Curves theory. Give 
valid reasons for choice of your answer:  
2 
 
 
4 
 
a. Lower indifference curve represents lower level of satisfaction. 
b. Two indifference curves can intersect each other. 
c. Indifference curve must be convex to origin at the point of tangency with 
the budget line at the consumer’s equilibrium.  
d. Indifference curves are drawn under the ordinal approach to consumer 
equilibrium. 
OR 
A consumer has total money income of  500 to be spent on two goods X and Y with 
prices of  50 and  10 per unit respectively. On the basis of the given information, 
answer the following questions: 
a. Give the equation of the budget line for the consumer. 
b. What is the value of slope of the budget line? 
c. How many units can the consumer buy if he is to spend all his money 
income on good X? 
d. How does the budget line change if there is a 50% fall in price of good Y?     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
 
1 
 
2 
 
2 
11 a) Why is Total Variable Cost curve inverse S- shaped? 
b) What is Average Fixed Cost of a firm? Why is an Average Fixed Cost Curve a 
rectangular Hyperbola? Explain with help of a diagram. 
 
2 
4 
12 Suppose the value of demand and supply curves of a Commodity-X  is given by the 
following two equations simultaneously: 
  Qd = 200 –10p    Qs = 50 + 15p 
i) Find the equilibrium price and equilibrium quantity of commodity X.
     
ii) Suppose that the price of a factor inputs used in producing the 
commodity has changed, resulting in the new supply curve given by the 
equation  
Qs’ = 100 + 15p    
Analyse the new equilibrium price and new equilibrium quantity as 
against the original equilibrium price and equilibrium quantity. 
    
6 
  
SECTION B : MACROECONOMICS 
 
 
13 Define money supply? 
 
1 
14 State one fiscal measure that can be used to reduce the gap between rich and poor. 
 
1 
15 Define the capital receipts of a government. 
 
1 
16 From the following data calculate Fiscal Deficit 
 
S.No Item • in Billions 
1 Capital Receipt 68 
2 Revenue Expenditure 160 
3 Interest Payment 20 
4 Borrowings 32 
5 Tax Revenue 50 
6 Non- Tax revenue 10 
 
1 
17 Estimate the value of ex-ante AD, when autonomous investment and consumption 
expenditure (A) is 50 crores, and MPS is 0.2 and level of income is 300 crores. 
Or 
Calculate Multiplier when MPC is and  . From the calculations establish the relation 
between size of Multiplier and size of MPC? 
3 
18 Discuss the significance of 45 degree line in Keynesian Economics. 3 
19 Elaborate ‘economic growth’ as objective of government budget. 4 
20 Use following information of an imaginary country: 
Year 2014 – 2015 2015– 2016 2016 - 2017 
Nominal 
GDP 
6.5 8.4 9 
GDP deflator 100 140 125 
i) For which year is real GDP and nominal GDP same and why?  
ii) Calculate Real GDP for the given years. Is there any year for which Real GDP falls?  
4 
21 How will ‘Reverse Repo Rate’ and ‘Open Market Operations’ control excess money 
supply in an economy?  
Or 
Illustrate with the help of a hypothetical numerical example the process of credit 
creation.  
4 
22 a) Define Externality.  
b) Find National Income from  following using expenditure method         
  • (in crores) 
1 Current transfers from rest of the world 50 
2 Net Indirect taxes 100 
3 Net Exports - 25 
4 Rent 90 
5 Private Final Consumption Expenditure 900 
6 Net Domestic Capital Formation 200 
7 Compensation of Employees 500 
8 Net Factor Income from Abroad - 10 
9 Government Final Consumption Expenditure 400 
10 Profit 220 
11 Mixed Income of Self Employed 400 
12  Interest 230 
2 
 
4 
 
Or 
 
Will the following factor income be included in domestic factor income of India? Give 
reasons for your answer:- 
(i) Compensation of employees to the resident of Japan working in Indian 
embassy in Japan. 
(ii) Payment of fees to a Chartered Accountant by a firm 
(iii)Rent received by an Indian resident from Russian embassy in India. 
(iv) Compensation given by insurance company to an injured worker. 
23 State whether the following statements are true or false. Give valid reasons for your 
answers. 
(i) Unplanned inventories accumulate when planned investment is less than planned 
saving. 
(ii) Deflationary gap exists when aggregate demand is greater than aggregate supply at 
full employment level. 
(iii) Average propensity to save can never be negative. 
6 
24 
a) ‘Devaluation and Depreciation of currency is one and the same thing’.  Do you 
agree? How do they affect the exports of a country?    
b) What is meant by ‘official reserve transactions’?  Discuss their importance in 
Balance of Payments.   
3 
 
 
3