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12thCOMMERCE –12th ECONOMICS

Final Test No.: 02 Marks: 80
Time: 3.00 Hour

Notes:
(1) All questions are compulsory.
(2) Draw neat tables / diagrams wherever necessary.
(3) Figures to the right indicate full marks.
(4) Write answers to all main questions on a new page.

Q.1.
(A) Assertion and Reasoning question: [5 Marks]
(1) Assertion (A) Microeconomics has comparatively narrower scope.
Reasoning (R): Microeconomics studies economic behaviour of only individual economic units of
economy.
Options:
(1) (A) is True, but (R) is False
(2) (A) is False, but (R) is True
(3) Both (A) and (R) are True and (R) is the correct explanation of (A)
(4) Both (A) and (R) are True and (R) is not the correct explanation of (A)

(2) Assertion (A) Alcohol possesses utility.

Reasoning (R): Utility is a want-satisfying capacity of a commodity.
Options:
(1) (A) is True, but (R) is False
(2) (A) is False, but (R) is True
(3) Both (A) and (R) are True and (R) is the correct explanation of (A)
(4) Both (A) and (R) are True and (R) is not the correct explanation of (A)

(3) Assertion (A) Debt raised by the government from borrowings from World Bank is an external debt.
Reasoning (R): Government of India cannot borrow from World Bank for Mumbai Metro Train.
Options:
(1) (A) is True, but (R) is False
(2) (A) is False, but (R) is True
(3) Both (A) and (R) are True and (R) is the correct explanation of (A)
(4) Both (A) and (R) are True and (R) is not the correct explanation of (A)

(4) Assertion (A) In monopoly, use wise price cannot be discriminated.

Reasoning (R): In India, the gas cylinder is priced differently for domestic and commercial use.
Options:
(1) (A) is True, but (R) is False

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(2) (A) is False, but (R) is True
(3) Both (A) and (R) are True and (R) is the correct explanation of (A)
(4) Both (A) and (R) are True and (R) is not the correct explanation of (A)

(5) Assertion (A) Scholarship is not included in the national income.

Reasoning (R): On the one hand, scholarship is an income received by an individual, but on the other
hand it is a government expense.
Options:
(1) (A) is True, but (R) is False
(2) (A) is False. but (R) is True
(3) Both (A) and (R) are True and (R) is the correct explanation of (A)
(4) Both (A) and (R) are True and (R) is not the correct explanation of (A)

(B) Find the odd word out: [5 Marks]

(1) Microeconomic variables: Individual demand, Individual supply, Individual income, Price level.
(2) Service utility: Teacher, Singer, Dentist, Chair
(3) Durable goods: Washing machine, Wooden chair, Cupboard, Milk
(4) Exception to the Law of Supply: Vegetables, Rare photographs, Notebooks, Historical coins
(5) Unregulated financial intermediaries: Mutual Fund, Nidhi, Chit funds, Loan companies

(C) Complete the correlation: [5 Marks]

(1) Intra marginal unit : MU > Price : : ………………………….. : MU < Price
(2) Direct tax : Tax on property : : ………………………….. : Indirect tax
(3) Government Securities Market : Capital market : : Loan companies : …………………………..
(4) Wheat of Punjab : Natural monopoly : : Indian Railways : …………………………..
(5) Rise in price : Expansion of supply : : Rise in taxation : …………………………..

(D) Give an economic term: [5 Marks]

(1) Debt instrument issued by companies or the government as a means of borrowing long term funds.
(2) Factor payment received by land in the form of money.
(3) An index number measuring the general changes in the labour productivity over a period of time.
(4) Elasticity of demand resulting from infinite changes in quantity demanded.
(5) Utility derived from raincoat in rainy season.

Q.2.
(A) Identify and explain the concepts from the given illustrations: (Any THREE) [2 x 3 = 6 Marks]
(1) Lalita satisfied her want of writing essay by using pen and notebook.
(2) In Arun’s business of manufacturing garments, cost incurred on raw material changes every year.
(3) Mihir calculated the index numbers by compiling data on total production of rice, wheat, tea, coffee,
onions, etc. for the year 2015 and 2019.
(4) Paul receives monthly pension of ` 5,000/- from the state government.
(5) Shares of a company held by an individual or a group.

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(B) Distinguish between: (Any THREE) [2 x 3 = 6 Marks]
(1) Public Finance and Private Finance
(2) Perfectly Elastic Demand and Perfectly Inelastic Demand
(3) Supply and Aggregate Supply
(4) Internal Trade and International Trade
(5) Commercial Bank and Goldsmiths

Q.3. Answer the following questions in brief (Any Three) [4 x 3 = 12 Marks]

(1) Write about brief historical review of microeconomics.
(2) Explain the concept of Demand.
(3) Explain the steps in constructing value index number.
(4) Explain the various types of deposits.
(5) Explain the trends in India's imports.

Q.4. State with reasons whether you agree or disagree with the following statements: (ANY THREE)
[4 x 3 = 12 Marks]
(1) Macroeconomics is a general equilibrium analysis.
(2) The Law of DMU is based on many assumptions.
(3) There are no exceptions to the Law of Supply.
(4) Perfect competition differs from monopoly.
(5) There are various types of index numbers.

Q.5. Study the following table, diagram, passage and answer the questions given below: (ANY TWO) [8 Marks]
(1) Study the following table and answer the questions:
Price of Banana Demand Supply Relation between
(per dozen) in ` (in dozen) (in dozen) DD and SS
10 500 100 DD > SS
20 400 ……. DD > SS
30 ……. 300 DD = SS
40 200 ……. DD < SS
50 ……. 500 DD < SS
Questions:
(i) Fill in the blanks in the above table. [2 Marks]
(ii) Derive the equilibrium price from the above table with the help of the suitable diagram.
[2 Marks]

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(2) Study the following diagram and answer the questions:

Questions:
(i) Prepare a hypothetical individual demand schedule for coffee. [2 Marks]
(ii) Explain the concept of Contraction in Demand with reference to movement of the equilibrium
point from 'A' to 'B'. [2 Marks]

(3) Study the following passage and answer the following questions:
The supply of agricultural produce depends on the natural conditions. For example, a good monsoon
and atmosphere brings in a bumper harvest, so the supply of agricultural products increases. On the
contrary, unfavourable natural conditions result in poor harvest and thus to a decrease in the supply
of agricultural goods.
The supply of money depends on the rate of interest. Some people save money to receive a fixed and
regular amount of income in the form of interest. Such people save less money at higher interest
rates and more money at low interest rates to maintain their fixed income level. Similarly, people
never save the entire part of their income even though the rate of interest is quite high. Therefore, in
the initial stage, saving increases with an increase in the rate of interest. However, after a certain
point, saving diminishes even if the rate of interest is high.
Questions:
(i) Explain the role of natural conditions in the supply of agricultural goods. [2 Marks]
(ii) Comment on the exceptional nature of saving tendency. [2 Marks]

Q.6. Answer the following questions in detail: (ANY TWO) [2 x 8 = 16 Marks]

(1) Explain any two methods of measuring elasticity of demand.
(2) Explain the two-sector model of circular flow of national income.
(3) Explain the types of budget.

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