CBSE Class 12 Economics Solved Question Paper 2017

Meaning: The production possibility curve is the curve which represents all those combinations of two commodities that can be produced with full utilization of resources in the most efficient way, which give the same level of satisfaction to a consumer.

Properties of PPC:

1. PPC slopes downwards from left to right: It is because in a situation of fuller use of the given resources, production of both goods cannot be increased simultaneously. for example, More of Good X can be produced only with less production of Good Y.
2. PPC is concave to the point of origin: It is because to produce each additional unit of Good X, more units of Good Y will have to be sacrificed. Opportunity cost of producing every additional unit of Good X tends to increase in terms of the loss of production of Good Y. Production will act upon the law of increasing marginal opportunity cost.
3. All points which lie on the PPC are the set of combination of two goods with the full utilization of resources and efficient utilization of technology.

When price of a commodity X falls by 10 per cent, its demand rises from 150 units to 180 units. Calculate its price elasticity of demand. How much should be the percentage fall in its price so that its demand rises from 150 to 210 units ?

Show that demand of a commodity is inversely related to its price.
Explain with the help of utility analysis.

Or

Why is an indifference curve negatively sloped? Explain.

Define market demand.

As we move along a downward sloping straight line demand curve from left to right, price elasticity of demand : (choose the correct alternative)
(a) remains unchanged
(b) goes on falling
(c) goes on rising
(d) falls initially then rises

The demand of a commodity when measured through the expenditure approach is inelastic. A fall in its price will result in :
(choose the correct alternative)
(a) no change in expenditure on it.
(b) increase in expenditure on it.
(c) decrease in expenditure on it.
(d) any one of the above

Complete the following table :

Average revenue and price are always equal under : (choose the correct alternative)
(a) perfect competition only
(b) monopolistic competition only
(c) monopoly only
(d) all market forms

State any one feature of oligopoly.

Distinguish between microeconomics and macroeconomics.