Class Test “XII” – Economics

Time – 90 Minutes Day - 01 M.M. – 40

Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. Why does the problem of choice arise?

2. Define opportunity cost?
3. Define utility.
4. What happens to TU when MU is Zero?
5. What do you mean by Marginal Rate of Transformation? Why is it increasing in
case of PPC?
6. Explain the central problem of “What to Produce” with the help of an example.
OR
Explain the central problem of “How to produce” with the help of an example.
OR
Explain the central problem of “whom to produce” with the help of an example.
7. Explain the relationship between Total Utility and Marginal Utility.
8. Explain why a PPC is concave to the origin?
9. Explain difference between Micro and Macro Economics.
10. How does a Consumer reach equilibrium position when he is buying only one
commodity? Explain with the help of marginal utility schedule.
OR
How does a Consumer reach equilibrium position when he is buying only two
commodities? Explain with the help of marginal utility schedule.
11. A consumer consumes only one good. The MU for that commodity is 5 and price of
the commodity is Rs.6, is the consumer in equilibrium. Give reasons. What will a
rational consumer do in this situation? Explain.
OR
A consumer consumes only two good X and Y whose prices are Rs. 4 and Rs. 5 per
unit respectively. If the consumer chooses a combination of the two goods with
marginal utility of X equal to 5 and that of Y equal to 4, is the consumer in
equilibrium? Give reasons. What will a rational consumer do in this situation?
Explain.
12. What is P.P.C.? Explain its properties. If an economy is facing problem of
unemployment, how it will affect the PPC?

TOPICS DISCUSSED -Production Possibility Curve, Marginal Rate of Transformation,

Marginal and Total Utility, relation between MU and TU, Law of Diminishing Marginal
Utility, Consumer Equilibrium Condition ( one Commodity, Two Commodity)
 Class Test “XII” – Economics
Time – 90 Minutes Day - 02 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What do you mean by monotonic preference?

2. What happens to the budget set if both the prices as well as the income double?
3. What will happen with IC if Marginal Rate of Substitution is increasing?
4. What do you mean indifference map?
5. Give the difference between Complementary goods and Substitute goods.
OR
Give the difference between Normal and inferior commodity.
6. Explain any three factors affecting the demand.
OR
Explain why is an indifference curve convex?
7. Explain the law of demand with the help of demand schedule?
8. Explain any four properties of Indifference Curve.
9. What is difference between increase in demand and expansion of demand?
OR
What is difference between decrease in demand and contraction of demand?
10. Explain the conditions of consumer’s equilibrium in the indifference curve
approach and explain rational behind these conditions.
OR
A consumer consumes only two good X and Y both priced at Rs. 3 per unit. If the
consumer chooses a combination of the two goods with Marginal Rate of
Substitution equal to 3, is the consumer in equilibrium? Give reasons. What will a
rational consumer do in this situation? Explain.
11. A consumer wants to consume two goods. The Prices of the two goods are Rs. 4
and 5 respectively. The consumer’s income is Rs. 20.
a- Write down the equation of Budget Line.
b- How much of good 1 can the consumer consumes, if she spend her entire income
on that good?
c- How much of good 2 can the consumer consumes, if she spend her entire income
on that good?
d- What is the slope of Budget Line?
12. How does a change in price of substitute goods affect the demand of given
commodity? Explain with the help of an example.
OR
How does a change in price of complementary goods affect the demand of given
commodity? Explain with the help of an example.

TOPICS DISCUSSED -Indifference Curve, Properties of IC, Budget Line, Marginal

Rate of Substitution, Consumer Equilibrium Condition ( IC Approach), Individual and
market demand, Law of demand, Factors affecting demand, Difference between Change in
Demand and Change in Quantity Demanded
 Class Test “XII” – Economics
Time – 90 Minutes Day - 03 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. Define price elasticity of demand?

2. When is demand for a commodity called perfectly inelastic?
OR
What is point of Inflexion?
3. What do you mean by Production Function?
4. In which phase of Law of Variable Proportion, a rational firms aims to operate?
5. What is meant by Variable Factors and Fixed Factors? Give to examples of each.
6. What is meant by returns to a factor? State the Law of Diminishing returns to a
factor.
7. Explain the relationship between Marginal Production and Total Production with
the help of Diagram.
8. How will you find the %age change in Demand and %age change in Price? Give
formulae.
9. The following table gives the product schedule of Labour. Find the corresponding
average product and MP schedules of labour.
Labour - 0 1 2 3 4 5
TP - 0 15 35 50 40 48
10. Explain the Law of Variable Proportion with the help of total and marginal product
curves.
OR
Explain the Law of Variable Proportion in terms of TP and MP.
11. Explain any six factors which affect the elasticity of demand.
12. Explain the reasons for – Increasing Returns to a Factor – Diminishing Returns to a
Factor – Negative Returns to a Factor.
OR
Give the difference between Returns to a Factor and Returns to Scale.

TOPICS DISCUSSED -Substitute and Complementary Commodity and Inferior

Commodity, Factors affecting Elasticity of Demand.Total Production, Marginal
Production, Average Production, and Reasons behind different phases of Law of Variable
Proportion – IRF, DRF and NRF.
 Class Test “XII” – Economics
Time – 90 Minutes Day - 04 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What do you mean by opportunity cost?

2. What is a supply schedule?
3. How does the Total Fixed Cost changes with change in output?
4. Give the meaning of Marginal Cost.
5. State the distinction between Explicit and Implicit cost. Give an example of each.
6. Why does the vertical distance between AC curve and AVC curve gradually
decline?
OR
Draw TC, TFC and TVC in a single diagram.
7. Explain the relationship between AR and MR under monopoly with the help of a
schedule and a diagram.
OR
Explain the relationship between AR and MR under perfect competition with the
help of a schedule and a diagram.
8. State whether the following the following statements are true of false. Give reasons
i) When marginal revenue is zero, average revenue will be constant
ii) Marginal revenue is always the price at which the last unit of commodity is sold.
9. Draw AC, AVC and MC in a single Diagram.
OR
Differentiate between Change in Quantity Supplied and Change in Supply.
10. Answer the following questions:
i) Why does AFC curve never touches the X- axis?
ii) Why does TVC curve start from origin?
iii) Why AC, AVC and MC curve are U-shaped?
iv) Why the gap between TC curve and TVC curve remains constant with rise in
output?
v) Why does AC curve lie above the AVC curve?
vi) Why does TC curve and TFC curve start from the same point above the origin?
OR
Explain the relationship between – (1) AC and MC, (2) AVC and MC, (3) TC and
MC
11. Explain the producer’s equilibrium with the help of MR = MC Approach.
12. Explain any four factors which affect the Supply of a commodity with the help of
diagram.

TOPICS DISCUSSED -Basic Concept of Costs, Explicit and Implicit, Relation between
different Costs. Revenue – Total, Marginal and Average, and their relation, Producer
equilibrium with MR MC approach. Supply- Individual and Market, Factors affecting
Supply, Difference between Change in Supply and Change in quantity supplied.
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 Class Test “XII” – Economics
Time – 90 Minutes Day - 05 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What do you mean by homogeneous product?

2. What is meant by Price discrimination?
3. What is selling cost?
4. What is a cartel?
5. If at a given price of a commodity, there is excess demand, how will the
equilibrium price be reached? Explain by diagram. OR
Explain the types of Price Discrimination.
6. If at a given price of a commodity, there is excess Supply, how will the equilibrium
price be reached? Explain by diagram. OR
Distinguish between Collusive / Cooperative and non-Collusive / Non- cooperative
oligopoly.
7. Explain the effect of ‘Maximum Price Ceiling’ on the market of a good. Use
Diagram. OR
Explain the meaning and need for ‘Maximum Price Ceiling’.
8. What are the effects of ‘Price Floor’ (Minimum Price Ceiling) on the market of a
good? Use diagram. OR
Why does the government of India fix ‘Support Price’ for some crops? Explain.
9. Explain the process of price determination with the help of a schedule and a
diagram.
10. Explain the following features of Perfect Competition Market – (1) Very Large
number of Buyers and sellers, (2) Homogeneous Product, (3) Freedom of entry and
Exit. OR
Explain the effect on the equilibrium quantity and equilibrium Price in the
following case.
(1) Demand Increase > Supply Decrease (2) Supply Increase when Demand is
Perfectly Elastic,
(3) Demand increases < Supply Increases (4) Supply Decrease when Demand is
Perfectly Inelastic
11. Explain the following features of Monopoly Market – (1) Single seller, (2) No
Close Substitute, (3) Restriction on Entry and Exit. OR
Explain the following features of Oligopoly Market – (1) Interdependence of firms,
(2) Group Behaviour, (3) Indeterminate demand Curve.
12. Explain the following features of Monopolistic Competition Market – (1) Product
Differentiation, (2) Non Price Competition, (3) Lack of perfect knowledge. OR
Explain the effect on the equilibrium quantity and equilibrium Price in the
following case.
(2) Demand Decrease > Supply Decrease (2) Supply Increase
(3) Demand Decreases < Supply Increases (4) Demand Increases.
TOPICS DISCUSSED -Market Forms and their features – Perfect Competition,
Monopoly, monopolistic Competition, Oligopoly, and Difference between Markets, Price
Determination, Excess Demand and Excess Supply.
 Class Test “XII” – Economics
Time – 90 Minutes Day - 06 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What are transfer payments?

2. How is net exports calculated?
3. Give the meaning of personal income.
4. What do you mean by two sector economy?
5. Distinguish between Stock and Flow.
OR
Distinguish between Factor Income and Transfer Income.
6. Give the difference between Final Goods and Intermediate Goods.
OR
Give the difference between National Income and Domestic Income.
7. What are externalities and how does it affect the society at large?
OR
Is GNP a real indicator of economic welfare?
8. Explain the terms – (1) Domestic Territory, (2) Normal Resident
OR
Give the difference between Consumption Goods and Capital Goods.
9. What are the components of NFYA? Explain.
OR
Explain the terms – (1) Net Indirect Tax, (2) Depreciation
10. State the steps for calculating national income using the Value Added method.
OR
State precautions while using the output method.
11. State the steps for calculating national income using the income method
OR
State precautions while using the income method.
12. State the steps for calculating national income using expenditure method.
OR
State precautions while using the expenditure method

TOPICS DISCUSSED - Stock, flow, Circular flow of income, Difference between basic
Concepts of National Income like factor income, transfer Income, Final and Intermediate
Goods, Consumption and Capital Goods, Domestic Territory, Normal Resident, NIT,
Depreciation and NFYA. Precaution to Calculate NI with all methods.
 Class Test “XII” – Economics
Time – 90 Minutes Day - 07 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. State two components of money supply

2. What is money?
3. What is C-C economy?
4. What is repo rate?
5. Explain “Banker’s to the Government” function of Central Bank.
OR
Explain “Banker’s Bank” function of Central Bank.
6. Explain “Clearing House” function of Central Bank.
OR
Explain the components of LRR.
7. How money solve the problem of “Double coincidence of wants”?
8. State the functions of money? Explain its primary functions.
OR
Explain the following function of Central Bank – (1) Note Issue, (2) Custodian of
Foreign Exchange reserves.
9. Explain the term – (1) High Powered Money, (2) Money Multiplier.
10. Explain the process of credit creation by giving numerical example.
11. How does a central bank influence credit creation by commercial through – (1)
Open Market Operations, (2) Bank Rate, (3) Repo Rate.
OR
How does a central bank influence credit creation by commercial through – (1)
Legal Reserve Ratio, (2) Reverse Repo Rate (3) Margin Requirements.
12. What are the measures of money supply (M1, M2, M3, and M4) in India? Explain.

TOPICS DISCUSSED - Money, Function of Money, Money Supply, Credit Creation by

Commercial Bank, Functions of Central Bank.
 Class Test “XII” – Economics
Time – 90 Minutes Day - 08 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What is meant by non-tax receipts?

2. What is a balanced budget?
3. What is Direct Tax?
4. Define foreign exchange.
5. Distinguish between direct tax and indirect tax.
6. Differentiate between balance of trade and balance of payment.
OR
Differentiate between Capital Account and Current Account.
7. What is Fiscal Deficit? What are its implications?
OR
What is Revenue Deficit? What are its implications?
8. India is suffering from the problem of inequalities in the distribution of income &
wealth. How can a budget be used as an instrument?
OR
Government rises its expenditure on producing public goods. Which economic
value does it reflect? Explain.
9. Differentiate between Developmental and Non-Developmental Expenditure.
OR
Differentiate between Plan and Non-Plan Expenditure.
10. Distinguish between revenue expenditure and capital expenditure with anexample
of each.
OR
Distinguish between revenue receipt and capital receipt with anexample of each.
11. (a) Differentiate between Autonomous and Accommodating Items.
(b) What do you mean by Primary Deficit? What zero Primary deficit indicate?
12. Explain the Objectives of government budget.

TOPICS DISCUSSED -Budget, Objectives, Component – Revenue Receipt and

Expenditure, Capital Receipt and Expenditure, Developmental and Non-Developmental
Expenditure, Plan and Non-Plan Expenditure, Implication of Deficit, Balance of
Payments, Component of Capital and Current Account, Autonomous and Accommodating
Items.
 Class Test “XII” – Economics
Time – 90 Minutes Day - 09 M.M. – 40
Note - Q. 1-4 = 1 Marks, Q. 5-6 = 3 Marks, Q. 7-9 = 4 Marks, Q. 10-12 = 6 Marks

1. What is aggregate demand?

2. What is meant by full employment?
3. What is meant by investment?
4. What is meant by foreign exchange rate?
5. Explain briefly the effect of excess demand on output, employment and price.
OR
Explain briefly the effect of deficient demand on output, employment and price.
6. What is the sources demand of foreign exchange? Explain
OR
What are the sources of supply of foreign exchange? Explain.
7. Distinguish between APC and MPC. The value of which of these two can be greater
than one and when?
OR
Differentiate between fixed and flexible exchange rate.
8. What is meant by investment multiplier? Explain the relationship between MPC and
multiplier.
9. How foreign exchange rate is determined? Use diagram.
OR
Explain – (1) APS, (2) APC, (3) MPS, (4) MPC
10. Explain the role of following in correcting Excess Demand situation – (1) Bank
Rate, (2) Open Market Operation, (3) Expenditure Policy, (4) Legal Reserve Ratio.
OR
Explain the role of following in correcting Deficient Demand situation – (1) Bank
Rate, (2) Open Market Operation, (3) Expenditure Policy, (4) Legal Reserve Ratio.
11. Distinguish between Appreciation / Revaluation and Depreciation / Devaluation of
currency. How it will affect the export and import of an economy.
12. Explain determination of equilibrium level of income using I=S approach. Use
diagram. What will happen if I>s or S>I.
OR
Explain determination of equilibrium level of income using AD=AS approach. Use
diagram. What will happen if AD>AS or AS>AD.

TOPICS DISCUSSED -FER – Appreciation and depreciation and Revaluation and

Devaluation, Impact on Export and Export. Types of Foreign exchange Rate.
Determination of Income employment and Output with AD=AS and I=S approach,
Propensity to Consume and Save. Types of Employment and Unemployment.
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