Board Paper of Class 12-Commerce 2011 Economics (SET 1) - Solutions

Q.1 (A) Fill in the blanks with appropriate alternatives given in the brackets :                               [5 marks]

1. The law of demand states ________ relation between demand and price.

(direct/total/inverse/positive)

2. Demand for salt is ___________.

(elastic/inelastic/perfectly elastic/unitary elastic)

3. ________ is one of the determinants of aggregate supply.

(Consumption/Investment/Natural resources/Saving)

4. The part of income not spent is________.

(saving/consumption/investment/capital)

5. Commercial banks create __________.

(paper money/metallic money/commodity money/credit money)

Q.1 (B) State whether the following statements are TRUE or FALSE:  [5 marks]

1. Marginal utility increases with increase in consumption.

2. In deficit budget, expenditure is more than income.

3. Demand for perishable goods is elastic.

4. Commercial banks play an important role in economic development.

5. Saving increases with increase in income.

Q.1 (C) Choose the correct answer :                              [5 marks]

1. The law of equi-marginal utility is based on the law of _________.

(a) demand

(b) diminishing marginal utility

(c) supply

(d) consumption

2. Macro economics studies _________.

(a) national income

(b) household income

(c) firm’s income

(d) industrial output

3. Demand of labour is _________.

(a) direct demand

(b) indirect demand

(c) autonomous demand

(d) joint demand

4. Perfectly elastic demand curve is _________.

(a) parallel to ‘X’ axis

(b) parallel to ‘Y’ axis

(c) upward sloping

(d) downward sloping

5. Demand of electricity for domestic purpose is _________.

(a) derived demand

(b) complementary demand

(c) direct demand

(d) composite demand

Q.2 (A) Define of Explain the following concepts. (Any FOUR)  [8 marks]

1. Definition of macro economics

2. Bank rate

3. Macro variables

4. Recurring deposit

5. Balanced budget

6. Unitary elastic demand

7. Market

8. Net earnings from foreign trade

Q.2 (B) State whether the following statements are TRUE or FALSE with reasons. (Any FOUR) :                              [8 marks]

1. Government budget is a family budget.

2. Land is a man made factor of production.

3. National income is a flow concept.

4. Saving increases with increase in consumption expenditure.

5. Cheque is not legal tender money.

6. Micro economics is also known as price theory.

7. The demand for consumption goods is direct demand.

8. Central bank works for profit.

Q.3 (A) Distinguish between Any FOUR of the following :                               [8 marks]

1. Demand curve and Supply curve.

2. Consumption expenditure and Investment expenditure.

3. Natural monopoly and Legal monopoly.

4. Metallic money and Paper money.

5. Utility and Usefulness.

6. Individual supply and Market supply.

7. Fixed capital and Fluctuating capital.

8. Income method and Expenditure method.

Q.3 (B) Give reasons or explain the following statements (Any FOUR) :                     [8 marks]

1. All desires are not demand.

2. Supply cannot exceed stock.

3. Income which is not saved is consumption.

4. Micro economic studies individual income.

5. Demand for basic necessities is inelastic.

6. The concept of national income has an important place in economic development.

7. Every loan creates a deposit.

8. Tax is a major source of income to the government.

Q.4 (A) Write answers in ‘one’ or ‘two’ paras each. (Any TWO) :                               [8 marks]

1. What are the features of micro economics?

2. What are the main determinants of aggregate demand?

3. What are the primary functions of commercial banks?

4. State the components of Government budget.

Q.4 (B) Write explanatory notes. (Any Two)  :                               [8 marks]

1. Qualities of an Entrepreneur.

2. Output method of measurement of national income.

3. Secondary functions of money.

4. Objective factors determining consumption function.

Q.5 State with reasons, whether you Agree or Disagree with the following statements. (Any TWO) :          [16 marks]

1. Perfect competition is an imaginary concept.

2. Market supply depends upon price only.

3. Demand curve slopes downward from left to right.

Q.6 Answer in detail. (Any TWO) :                               [16 marks]

1. Explain the law of Diminishing Marginal Utility. What are the assumptions to the law?

2. State the features of Macro economics.

3. Explain the functions of Central Bank.