Class 11 Economics: CBSE Sample Question Papers- Term II (2021-22)- 1 | 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.  Explain ‘homogeneous products’ as a characteristic of a perfectly competitive market.

In a perfectly competitive market, buyers treat the product produced by different firms as homogeneous. So they are willing to pay the same price for products of different firms. No firm, therefore, can charge a price higher than the market determined price.

OR

Explain the implication of “Perfect Knowledge about Market” under perfect competition.

‘Perfect Knowledge about Market’ means both buyers and sellers are fully informed about the market prices. Therefore, no firm is in a position to charge a different price and no buyer will pay a higher price. As a result, a uniform price prevails in the market.

Q.2. Construct the index number by Simple Average of Price Relative Method.

Construction of Index Number:

Q.3. Explain the implications of the “freedom of entry and exit” feature of perfect competition.

Under perfect competition, there will be no restriction on the entry and exit of both buyers and sellers. If the existing sellers start making abnormal profits, new sellers should be able to enter the market freely. This will bring down the abnormal profits to the normal level. Similarly, when losses will occur existing sellers may leave the market. However, such free entry or free exit is possible only in the longrun, but not in the short-run.

OR

What is minimum price ceiling? Explain its implications.

For certain goods and services, government sets minimum price. This minimum price is called minimum price ceiling. This price is normally set at a level higher than the equilibrium price. This leads to excess supply. Since producers are not able to sell all they want to sell, they illegally sell the goods or services below the minimum price.

Q.4. Define Standard Deviation. Write its two demerits.

Standard deviation is the square root of the arithmetic mean of the squares of all deviations. Deviations are measured from arithmetic mean of the items.

Demerits:

(i) Difficult: The process of squaring the deviations and then to find the value of its square root is a time consuming process. It is quite difficult too.

(ii) More important to extreme values: In calculation of standard deviation undue importance is given to marginal values.

OR

Name the different types of measures of dispersion.

Measures of dispersion:

(i) Range,

(ii) Coefficient of range,

(iii) Inter quartile range,

(iv) Quartile deviation,

(v) Mean deviation,

(vi) Standard deviation, and

(vii) Lorenz Curve.

Q.5. Write short notes on the following:

(i) Negative Correlation. 
(ii) Positive Correlation.

(i) Negative Correlation: Correlation is said to be negative or inverse, if the variables move in the opposite directions. For example, when the supply of a commodity increases, the price of commodity comes down.

(ii) Positive Correlation: When both the variables are moving in the same direction, correlation is said to be positive. For example, increase in the demand of a commodity tends to increase the price of commodities.

OR

What is scatter Diagram ? What are its demerits?

It is a technique to usually examine the relationship between variables in a visual manner. It is obtained by plotting the values of the variables on X-axis and Y-axis on graph paper.

Demerits:

(i) It does not exactly determine the correlation coefficient.

(ii) It cannot be interpreted by persons who do not understand the basic term like downward sloping and upward sloping, etc.

Q.6. Using the simple aggregative method, calculate the index number for the given data:

Construction of the index number:

Formula:

⇒

OR

Construct Index Number of price of 2011 from the following data by:
(i) Laspeyre’s Method
(ii) Paasche’s Method

Construction of Price Index Number:

(i) Laspeyre’s Method:

(ii) Paasche’s Method:

Q.7. Calculate Karl Pearson’s coefficient of correlation from the following data:

Q.8. Read the passage below and answer that follows:

Monopsony refers to a market situation when there is a single buyer of a commodity or service. It applies to any situation in which there is a ‘monopoly’ element in buying.
For example, when consumers of a certain commodity are organised, or when a socialist government regulates imports, or when a certain individual happens to have a taste for some commodity which no one else requires, or when a single big factory in an isolated locality is the sole buyer of some grades of labour, there is monopsony.
Monopsony can be formally defined, in the words of Liebhafsky, as “the case of a single buyer who is not in competition with any other buyers for the output which he seeks to purchase, and as a situation in which entry into the market by other buyers is impossible”.
The analysis of monopsony pricing is similar to that under monopoly pricing. Just as a monopolist is able to influence the price of the product by the amount he offers for sale, similarly the monopsonist is able to influence the supply price of his purchases by the amount he buys.

 How is monopsony different from monopoly?

Ideal market conditions are not existent everywhere and there are situations where the market is skewed either towards buyers or towards sellers. Monopoly is referred to a market condition where there is only one producer in a particular industry and the consumers really have no option but to buy his products or service. This is an ideal condition for the player as he can dictate the terms and set the prices on his whim. The opposite condition is Monopsony where there are many sellers but a single buyer which is also an imperfect market condition.

Q.9. Read this passage below and answer 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. Because total revenue equals price (P) times quantity (Q), dividing by quantity leaves us with price.

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.10. Explain the relationship between Marginal Cost and Average Variable Cost.

(i) When MC is less than AVC, AVC falls with increase in output.

(ii) When MC is equal to AVC i.e., when MC and AVC curves intersect each other at point A, AVC is constant at its minimum point.

(iii) When MC is more than AVC, AVC rises with increase in output.

(iv) Thereafter, both AVC and MC rise, but MC increases at a faster rate as compared to AVC. As a result, MC curve is steeper as compared to AVC curve.

Q.11. How is the price of a commodity determined in a perfectly competitive market? Explain with help of a diagram.

Price of a commodity is determined by market demand and market supply of a commodity,(i.e. industry is the price maker). An individual producer/firm has no role in the determination of the price of the commodity (firm is a price taker). No individual seller or buyer can influence the price of the commodity.

DD and SS are market demand and market supply curves intersecting at E. OQ quantity (Equilibrium Quantity) would be offered for sale and demanded by the buyers at OP price (equilibrium price) per unit. The industry is in equilibrium.

Q.12. (a) Calculate Average Variable Cost at each level of output:

(a)

Change in TVC is MC. Thus, by adding MC we get the TVC.

(b) What is average fixed cost of a firm ? Why is an average fixed cost curve a Rectangular Hyperbola? Explain with the help of a diagram.

(b) Per unit fixed cost is known as Average Fixed Cost. As the value of Total Fixed Cost doesn’t very at any level of output in short run and if it is divided by an incremental number the result would be diminishing with the same proportion as that of the proportion of increases of the number of units and the product will be same.

Since TFC remains same at different levels of output, AFC falls as the level of output is increased. The AFC keeps on falling as the level of output increases. AFC can never become zero.

Q.13. Find the Standard Deviation by Assumed Mean Method.

OR

(a) Find the mean deviation about median from the following data:

(b) List the merits of Standard Deviation.

Standard Deviation

(a)

The class interval containing or 25^th term is 20 – 30. Therefore 20 – 30 is the median class.

Median =

= 20 + 7.85

= 27.85

Mean deviation about the median is given by

= 10.35

(b) There are following merits of standard deviation:
(i) It is rigidly defined.
(ii) It is capable of further algebraic treatment
(iii) The calculation is not difficult.
(iv) Standard deviation is considered to be an ideal measure.
(v) It is not much affected by fluctuations of sampling.