PRE-BOARD EXAMINATION 2023-2024

Grade : XII Time : 3 Hrs

Subject : ECONOMICS Marks : 80

SECTION A (16 MARKS)

(i)MUl + MU2 + MU3 +..… MUn = ? (1)

(A) Total marginal utility (B) Total average utility

(C) Total utility (D) Sum of average utility

(ii) Which of the following statement is true? (1)

(A) MC curve cuts AC curve at its highest point.

(B) MC curve cuts AC curve at its lowest point.

(C) MC curve cuts AC curve at its starting point.

(D) MC curve cuts AC curve at its ending point.

(iii) If the TP1 is 10 and TP2 is 12, what is the MP? (1)

(A) 2 (B) 4 (C)-4 (D)-2

(iv) Which of the following statements is true? (1)

(A) M1 is the most liquid measure of money supply.

(B) M2 is the most liquid measure of money supply.

(C) M3 is the most liquid measure of money supply.

(D) All the statements are true.

(v) Goods for which the demand decreases with

increase in income are called: (1)

(A) Public goods (B) Complementary goods

(C) Inferior goods (D) Substitute goods

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(vi) Stock of a commodity is also called: (1)

(A) Actual supply. (B) Individual supply

(C) Intended supply. (D) Market supply

(vii) Which of the following statement is true? (1)

(A) A monopoly selects a higher price and lesser

quantity of output than a price-taking company.

(B) A monopoly selects a lower price and lesser

quantity of output than a price-taking company.

(C) A monopoly selects a higher price and more

quantity of output than a price-taking company.

(D) A monopoly selects a higher price and lesser

quantity of output than a price-making company

(viii) Which of these is the point of satiety? (1)

(A) Marginal utility is equal to zero (B) Marginal utility is less than zero

(C) Marginal utility is greater than zero (D) None of the above

(ix) Which one of the following is a combination of

(A) Excise duty and Wealth tax (B) Service tax and Income tax

(C) Excise duty and Service tax (D) Wealth tax and Income tax

(x)State the Law of Equi-marginal Utility.(1)

(xi) Why is the Marginal cost curve U shaped? (1)

(xii) State any two assumptions of Law of Diminishing Marginal Utility (1)
(xiii) Show the relationship between APC and APS. (1)
(xiv) Write any two differences between balance of trade and balance of payment. (1)
(xv) What is meant by unfavourable Balance of Payments (1)
(xvi) Define National Income (1)
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 SECTION B (32 MARKS)

Question 2

(i) Balance of Payments always balances in the accounting sense. Explain briefly. (2)

(ii) What is meant by propensity to consume? (2)

Question 3

(i) Define Marginal utility. When can it be negative? (2)

(ii) Draw a diagram to show the circular flow of income in a two sector model with leakage

and injection. (2)

Question 4

(i) Explain the shape of Average Cost (AC) curve. (1)

(ii) Distinguish between intended supply and actual supply (3)

Question 5

(i) The demand for a commodity at 4 per unit is 100 units. The price of the commodity rises
and as a result, its demand falls to 75 units. Find the new price, if the price elasticity of demand
of that commodity (2)
(ii) Explain the following components of domestic factor income. (2)

i) Compensation of employees

ii) Operating Surplus

OR

(i) Define Marginal Cost. With the help of an example, show how Marginal cost obtained from
the Total Cost? (2)
(ii) Differentiate between money cost and real cost. (2)

Question 6

(i) Justify the following as price-takers /price-makers: (2)

i) An oligopoly market ii) A perfectly competitive market

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(ii) Define Average Product? How can you get Average Product from the Total Product ? (2)

Question 7

(i) Define production function. (1)

(ii) Fill the blanks in the table given below: (3)

No. of workers T.P. A.P, MP

1 - 150 -

2 230 - -

3 - 117(approx) 120

Question 8

(i) Explain with the help of a diagram, the relationship between total product

and marginal product . (4)

OR

(ii) How do commercial banks create credit? Explain with the help of an example

Question 9

(i) Discuss three causes for the inverse relationship between price and quantity

demanded for a commodity. How are Giffen goods an exception? (4)

SECTION C ( 32 MARKS )

Question 10

(i) Discuss three causes for the inverse relationship between price and quantity

demanded for a commodity. How are Giffen goods an exception? (2)

(ii) Explain Law of supply. Discuss how supply of labour is an exception to the Law of Supply. (6)

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 OR

(i) How does a perfectly competitive firm earns super normal profits in the short run

equilibrium? Explain it with the help of a diagram. (6)

(ii) Using diagrams, explain the concepts of :

(a) Shut-down point

(b) Break even point of a firm in perfect competition under short-run (2)

Question 11

(i) Distinguish between direct tax and indirect tax. (2)

(ii) Define fiscal deficit, primary deficit and revenue deficit. Discuss their implications with
reference to India (6)

Question 12

(i) Explain one property of Indifference Curve with the help of diagram (2)

(ii)Explain the concept of deflationary gap with the help of a diagram. Discuss any four

monetary measures to reduce the gap. (6)

OR

(i) Estimate operating surplus from the following data . (in Crores) (2)

Compensation of employees 1000

Dividends 15400

Rent 2250

Interest 150

Undistributed profits 2400

Corporate tax 300

Personal income tax 20

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(ii) From the following data calculate GNPMP and NNPFC by expenditure method; (6)

1. Government final consumption expenditure 550

2. Net factor Income earned from abroad (-) 20

3. Private final consumption expenditure 1000

4. Net domestic capital formation 380

5. Profits 400

6. Rent 150

7. Net exports (-)30

8. Interest 200

9. Net indirect taxes 150

10. Mixed Income of Self-employed 450

11. Compensation of employees 550

12. Consumption of Fixed Capital 170

Question 13
Domestic Money supply up 11.60% on year 2020. India’s total money supply (M3) stood at
₹1,78,04,885 crores as on October 23rd 2020, recording a rise of 11.60 % over the same time last
year. Currency with the public stood at ₹26,19,612, up 21.2% over the year and other deposits
with RBI ₹40,707 crores. Demand deposits with banks were up 10% at ₹16,25,734 crores. Time
deposits with the banks were also up 10% at ₹1,35,18,822 crores. The bank credit to commercial
sector rose 5.2% on year to ₹1,09,99,604 crores.

(i) What are the measures of money supply? (1)

(ii) What is high powered money? (2)

(iii) Briefly explain any one primary function of money. (2)

(iv)What is unlimited legal tender? (2)

(v) What can be included in broad money ? (1)

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