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CBSE Class 12 Economics Solved Question Paper 2016

Short Answer Type

11.

Define fixed cost. Give an example. Explain with reason the behaviour of Average Fixed Cost as output is increased.

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12.

Define marginal product. State the behaviour of marginal product when only one input is increased and other inputs are hold constant.

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13.

When price of a commodity falls from Rs 12 per unit to Rs 9 per unit, the producer supplies 75 percent less output. Calculate price elasticity of supply

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Long Answer Type

14.

Why do central problems of an economy arise? Explain the central problem of 'for whom to produce'?

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15.
Explain three properties of indifference curves.

Properties of indifference curves (ICs):
(a) Indifference curves slope downwards or negative slope: The indifference curves slope downwards, left to right, because an increase in the amount of Good X along the indifference curve is associated with a decrease in the amount of Good Y, as the preferences are monotonic.
(b) Slope of indifference curves represents marginal rate of substitution:
Marginal rate of substitution (MRS) is the rate at which a consumer is willing to substitute one commodity for another commodity.

Slope of indifference curve between A and B

equals fraction numerator increment straight Y over denominator increment straight X end fraction equals space MRS

MRS is the rate at which the output of Good Y is sacrificed for every additional unit of Good X.

iii. In an indifference map, higher IC represents higher level of satisfaction:
An indifference map refers to a set of indifference curves. An indifference curve which is to the right and above another shows a higher level of satisfaction to the consumer. Here, IC₃ shows higher level of satisfaction than IC_2. Thus, the indifference curve relates to a higher level of income of the consumer.

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16.

Examine the effect of (a) fall in the own price of good X and (b) rise in tax rate on good X, on the supply curve. Use diagrams.

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17.

Explain the implications of the following in a perfectly competitive market
(a) Large number of sellers
(b) Homogeneous products.

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18.

Explain the implications of the following in an oligopoly market:
(a) Barriers to entry of new firms
(b) A few or a few big sellers

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Short Answer Type

19.

Define flows.

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20.

National income is the sum of factor incomes accruing to:(Choose the correct alternative):
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents

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