RED ROSE SCHOOL LAMBAKHEDA , BHOPAL

SECOND PRE BOARD EXAMINATION , 2018

CLASS XII
SUBJECT : ECONOMICS
Max. Time :- 3 Hours Max. Marks :- 80
GENERAL INSTRUCTIONS:-

 All questions are compulsory.

 Please check that this question paper contains 3 pages.
 Please write down the serial number pf the question before attempting
it.
 Graph work and plotting along with schedule should be answered neat
and clean.

SECTION – A
MICROECONOMICS
1. The Saansad Adarsh Gram Yojana aims to create model villages by improving on the
rural infrastructure and providing better livelihood opportunities in the rural areas.
Because of this Scheme , the Production Possibilities curve (1)
( A) will shift leftwards
(B) will shift inwards
(C) will shift rightwards
(D) will not be affected.
2. State the meaning of Marginal Physical Product. (1)
3. Why does TVC Curve Starts from origin? (1)
OR
Which of the following is a variable cost?
A. Salary of Permanant staff
B. Licence Fee
C. Rent of Premises
D. Wages
4. A Firm is operating in a market where it can sell any quantity of a commodity at a
given price. As more units of a commodity are sold , the relation between Marginal
Revenue ( MR) and Average Revenue is :- (1)
A. Average Revenue > Marginal Revenue
B. Average Revenue = Marginal Revenue
C. Average Revenue < Marginal Revenue
D. None of the Above
5. Define Marginal Opportunity Cost. Discuss the concept with the help of a numerical
example. (3)
OR
State any three assumptions on which a production possibilities curve is based.
6. “Marginal Utility of both the goods should be equal to its price". In the light of the
statement, explain the utility Analysis under Consumers' equilibrium. (3)
7. “ As the price of a good falls , the resulting increased purchasing power may be a
reason for increase in quantity demanded.” Do you agree with the given statement?
Give reason for your answer.
OR
Calculate and comment on the Nature of Price Elasticity of Demand , if , with a rise in
price of good X from Rs. 10 to Rs. 12 , the quantity demanded falls by 40%.
8. What is producer's equilibrium? Explain the conditions of producers equilibrium if a
producer can sell more output by lowering the price? (4)
9. Explain why there are only a few firms in an oligopoly market? Why these firms are
mutually interdependent in an oligopoly market? (4)
OR
A monopoly market structure is one of the giant functionary of India. Explain the
reasons for emergence of monopoly.
10. If the consumer faces the Budget line Equation :- (6)
20x + 10y = 500
Answer the following :-
A. What will be the slope of Budget line?
B. How many units he would be able to buy if the entire sum of Rs. 500 is to be
spent of Good X only? Show Calculations.
C. Construct a new budget line equation if the price of Good Y falls by 50%.
Also, write the slope of the new budget line equation.
OR
Explain the following :-
A. Why is Indifference curve downward sloping.
B. Why is falling MRSxy should be the condition of consumers' equilibrium in
ordinal approach.
C. What changes can take place when a consumer is not in equilibrium in utility
approach.
11. What is the difference between short run and long run functions? Explain with
reasons the different phases of short run production function on the basis of Marginal
Product. Use Diagram. (6)
OR
What is Market Supply. What is the effect on the supply of a good, when government
imposes a tax on production of that good? Explain.
12. Market for a good is in equilibrium. Explain the meaning of excess demand with the
help of a diagram. Discuss its effects on the equilibrium price. (6)

SECTION – B
MACROECONOMICS

13. State the problem of Double Counting. How it can be avoided? (1)
14. Distinguish between time deposits and demand deposits. (1)
OR
 What is Meant by Reverse Repo Rate?
15. ______________ is the main source of Money supply in the economy. ( Choose the
correct alternative). (1)
A. Central Bank
B. Commercial Bank
C. Both (a) and (b)
D. Government
16. Primary deficit is borrowing requirements for making _________ ( Choose the correct
alternative) (1)
A. Interest payments
B. Other than interest payments
C. All types of payments
D. Some specific payments.
17. Calculate Net Value Added at Factor Cost from the following data : (3)
S.No. Contents Rs. ( in Lakhs)
1 Intermediate Consumption 300
2 Change in stock 50
3 Net indirect taxes 70
4 Sales 500
5 Consumption of fixed 20
capital
6. Imports 40

18. If higher income leads to increase in expenditure and AD which in turn leads to
higher level of output, why cant government print more currency notes to achieve
higher level of AD and GDP? (3)
OR
What is inflationary gap? Explain its causes and measures to control the problem.
19. In the government of India's budget for the year 2017-18, the finance minister
proposed to raise the excise duty on ciggerates. He also proposed to increase income
tax on individual earning more than Rupees one crore per annum. Identify and explain
the types of taxes proposed by the finance minister. Was the objective only to earn
revenue for the government?
20. Explain how “Non monetary exchanges" are a limitation of the gross domestic
product (GDP) as an indicator of welfare. (4)
OR
What are Externalities? Give an example of a positive externality and a negative
externality and its impact on welfare of the people.
21. Explain the Banker's Bank function of Central Bank. (4)
22. A. Define “Real Gross Domestic Product". (1)
B. Calculate National Income by (a) Income Method (b) Expenditure Method. (5)
Items Rs. ( in Crores)
Wages and salaries 500
Government final 120
consumption expenditure
Royalty 20
 Interest 40
Household final 600
consumption expenditure
Change in stock 10
Indirect tax 100
Rent 50
Final consumption 30
expenditure of private non
profit institutions serving
households
Net domestic fixed capital 60
formation
Profit after tax 100
Corporation tax 20
Net exports (-)20
Subsidies 30
Net factor income from (-)5
abroad

23. Explain the determination of equilibrium level of output by consumption investment

approach. (6)
24. Answer the following : (3 + 3 = 6)
A. What is meant by Official Reserve transactions and Portfolio Investment?
Discuss its importance in Balance of Payments.
B. According to the recent media reports :
“ USA has Accused China of Currency devaluation to promote its
exports.”
In the light of the given media statement , Comment , how exports can be
promoted with the help of currency devaluation.