DELHI PUBLIC SCHOOL, JODHPUR

Half Yearly Examination (2014 - 15) Retest

Subject – Economics
Class – XII
Time: 3 hours M.M. 100
General Instructions :–
1. Please check that this question paper contains 03 printed pages and 29 questions.
2. All questions are compulsory.
3. Question no. 1-3 and 22 are multiple choice questions carrying 1 mark each.
4. Question no. 4, 5, 23 and 24 are very short answer type questions carrying 1 mark each answer to
them should not exceed 30 words each.
5. Question no. 6-11 and 25-26 are short answer type questions carrying 3 marks each, answer to them
should not exceed 60 words each.
6. Question no. 12-15 and 27 are short type answer carrying 4 marks each, answer to them should not
exceed 70 words each.
7. Question no. 16-21 and 28-29 are long answer type questions carrying 6 marks each, answer to
them should not exceed 100 words each.
SECTION – A
1. Budget set shows : [1]
(a) Possible combination of two goods that a consumer can buy by spending his entire income
at the given prices.
(b) Possible combination of two goods which cost less than or equal to consumer’s money
income.
(c) Possible combination of two goods among which the consumer is indifferent.
(d) All of these.
2. When same quantity is supplied at a lower price, it shows ? [1]
(a) Contraction of supply (b) Decrease in supply
(c) Expansion of supply (d) Increase in supply
3. In which market form, the demand curve is flatter as compare to monopoly ? [1]
(a) Perfect competition market (b) Monopolistic competition market
(c) Oligopoly market (d) None of the above
4. Why is demand for water inelastic ? [1]

5. What is meant by decrease in supply ? [1]

6. If there is recession in some parts of the world, how does it affect the production [3]
possibility curve of India ?
7. A 5% fall in the price good-x leads to 10% rise in its demand. A 20% rise in price good-y [3]
leads to decrease in its quantity demand from 80 units to 72 units. Calculate the price
elasticity of demand of good-x and good-y. Which commodity is more elastic ?
OR
The market demand for a good at ` 4 per unit is 100 units. Due to increase in its price, the
market demand falls to 75 units. Find out the new price if price elasticity of demand is (–) 1.
8. Explain any two properties of an indifference curve. [3]

9. Explain the central problem ‘for whom to produce’ ? [3]

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10. What can government possibly do to promote pollution free vehicles through the market ? [3]
Explain.
OR
How can the availability of tobacco products be reduced through the market ? Explain. Use
diagram.
11. What would be the shape of the demand curve so that the total revenue curve is [3]
(a) A positively sloped curve but at diminishing rate (b) A horizontal line.

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12. State whether the following statements are true or false. Give reasons. [4]
(i) An economy always operates on production possibility curve.
(ii) Micro economics is concerned with study of problem of the economy like inflation or
unemployment.
(iii) No scarcity means no economic problem.
(iv) Production possibility curve is downward slopping because of increasing marginal
opportunity cost.
13. Explain producer equilibrium through marginal revenue and marginal cost approach, when [4]
more units can be solved at lowering the price of a commodity.
14. Explain how the supply of a commodity affected by the change in government policy. [4]
OR
Explain geometric method of measuring elasticity of supply.
15. Complete the following table : [4]
Output Average Variable Cost Total Cost Marginal Cost (`)
(Units) (`) (`)
1 –– 16 20
2 18 –– ––
3 –– –– 18
4 20 120 ––
5 22 –– ––
16. Explain the conditions of consumer’s equilibrium through marginal utility approach in two [6]
commodity case (commodity X & Y), also explain how a consumer readjust its
consumption pattern, when price of the commodity X decrease.
OR
Suppose a consumer is consuming two goods X & Y and he finds that the ratio between
marginal utility to its price in case of good X is less than good Y. What changes will take
place to reach in equilibrium.
17. (a) State whether the following statements true or false. Give reasons. [3+3]
(i) In case of perfectly elastic demand, expenditure on the commodity change with
change in its price.
(ii) A shift in demand curve of the given commodity may be caused by change in any
determinant other than price of a commodity.
(b) How demand for a good affected by change in price of complimentary goods ?
18. Identify different phases of the law of variable proportion from the following schedule, [6]
also explain the reason behind it.
Units of variable factor : 1 2 3 4 5 6
Total Product (Units) : 50 12 16 18 18 16
0 0 0 0 0
19. A perfectly competitive firm has the following cost function : [6]
Output 0 1 2 3 4 5 6 7
(Units) :
Total Cost (`) : 10 18 24 32 42 56 72 98
How much quantity of this commodity will be produced by the firm if market price of the
commodity is ` 10 per unit ? How will it change when price decreases to ` 08 per unit ?
20. State whether the following statements are true or false. Give reasons. [6]
(i) Average cost can rise even marginal cost is falling.
(ii) Total fixed cost is more than total variable cost at zero level of output.
(iii) Total cost can be obtained as summation of marginal cost in the short run.
(iv) If a machinery has no possible alternative use, its opportunity cost will be very high.
21. (a) Giving reasons, distinguish between the behaviour of demand curve under perfect [3+3]

(3) P.T.O.
 competition and monopolistic competition.
(b) Explain the implication of ‘interdependence of firms’ under oligopoly.

SECTION – B
22. ‘Income method’ is also known as : [1]
(a) Distributive share method (b) Income Disposal method
(c) Industrial Origin method (d) None of these
23. Define normal resident of a country. [1]

24. Give two examples of transfer payment. [1]

25. Suppose firm A sold timber produced in its forests to firm B for ` 1000 and firewood to [3]
consumers for fuel for ` 500. Firm B converted logs into sleepers and partly sold to
furniture making firm C for ` 800 and the remaining to private consumers for ` 700.
Firm C sold furniture worth ` 1000 to private consumers and the remaining to a
government office for ` 500. Calculate (i) value added by firm A, firm B and firm C. (ii)
total value of output.
26. Which of the following items is a part of compensation of employees ? Give reasons for [3]
your answer.
(i) Entertainment allowance to an employee to entertain business guests.
(ii) Employers contribution to gratuity fund of the employees.
(iii) Medical expenses of a firm on treatment of employee’s family.
27. Distinguish between real and nominal gross domestic product. [4]

28. Will the following be a part of domestic factor income of India ? Give reasons for your [6]
answer.
(i) Salary received by Indian residents working in Russian Embassy in India.
(ii) Profit earned by an Indian Bank from its branches Abroad.
(iii) Entertainment tax received by the government.
(iv) Rent paid by Embassy of Japan in India to a resident Indian.
29. Calculate (a) gross domestic product at market price and (b) factor income from Abroad [6]
from the following data :

Particulars ` (In crores)

(i) Profit 500
(ii) Export 40
(iii) Compensation of employees 1500
(iv) Gross national product at factor cost 2800
(v) Net current transfer from rest of the world 90
(vi) Rent 300
(vii) Interest 400
(viii) Factor income to Abroad 120
(ix) Net indirect tax 250
(x) Net domestic capital formation 650
(xi) Gross fixed capital formation 700
(xii) Change in stock 50

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