# AHSEC - Class 12 Question Papers: Economics' 2016 H.S. 2nd Year, 2016
ECONOMICS Full Marks: 100 Time: 3 hour
1. (a) What is mixed economy? 1
(b) What is opportunity cost? 1
(c) Give one example of complementary goods. 1
(d) Fill in the blanks: 1
AC = AVC + …………….
(e) What does the average fixed cost (AFC) curve look like? 1
(f) Give an example of variable cost. 1
2. Mention two central problems of an economy. 2
3. Mention any two determinants of market demand. 2
4. The total money income of a consumer is M and he spends his entire money income on the consumption of two commodities, viz. X and Y . The prices of X and Y are Px and Py respectively. State the equation of his budget line.      2
5. What is marginal rate of substitution? 2
6. Mention two determinants of the supply curve of a firm. 2
7. Explain the relation between market price and marginal revenue of a price taking firm.     2
8. If the total product with 5 units of a variable factor is 55, calculate the average product of it. If the factor is increased by 1 more unit as a result of which the total product becomes 60, what will be the marginal product?     4
Or
Explain the conditions for equilibrium of a firm. 4

9. What is meant by Returns to scale? Explain the various returns to scale. 1+3=4
Or
Distinguish between returns to factor and returns to scale. 4
10. The production function of a firm is given as Calculate the level of output when it employs 25 units of Labour (L) and 16 units of Capital (K).
11. The marginal revenue (MR) schedule of a production unit is given below. Calculate the total revenue (TR) and the average revenue (AR) schedules.

 Q MR 1 2 3 4 5 6 21 19 17 11 7 3

12. Write down four characteristics of monopoly market. 4
13. State and explain the law of demand with the help of a demand schedule and a diagram. 6
Or
Explain the concept of market equilibrium with the help of a demand and supply curves.
14. What is price elasticity of demand? Explain briefly any two factors determining price elasticity of demand for a goods. 2+4=6
Or
Explain the implications of the features, “Product differentiation” and “Selling Costs” under monopolistic competition. 3+3=6 15. (a) What constitute fiat money? 1
(b) What is aggregate supply? 1
(c) Define involuntary unemployment. 1
(d) What is National Income? 1
(e) Why is post office not considered as bank? 1
(f) Give one example of accommodating capital flow. 1

16. Suppose the Net National Product at market price (NNPMP) of a country is Rs. 1600 crore. If the total indirect tax is Rs. 100 crore and the total amount of subsidy paid by the government is Rs. 80 crore, find out the National Income of the country. 2
17. What do you understand by the problem of double counting in the context of a measurement of National Income? 2
18. Distinguish between induced investment and autonomous investment. 2
19. Name two sources of non-tax revenue. 2
20. Mention two main items of non-plan expenditure of a government budget. 2
21. What is devaluation of currency? 2
22. Define personal income and private income and distinguish between them. 2+2=4
23. If National Income in an economy increases by Rs. 1,000 crore as a result of a new investment of Rs. 200 crore, find out the values of (i) MPC, and (ii) Multiplier (K). 2+2=4
24. Explain the relationship between marginal propensity to consume (MPC) and marginal propensity to save (MPS). 4
25. What is meant by revenue deficit? Explain three implications of revenue deficit. 1+3=4
Or
What are the basic objectives of a government budget? Explain them briefly.
26. Distinguish between balance of trade (BOT) and balance of payment (BOP). 4
Or
Differentiate between fixed and flexible exchange rates.
27. Explain the Precautions needed to be taken while calculating National Income by expenditure method. 6
Or
Explain the circular flow of income in a simplified economy with two sectors – households and firms.
28. Briefly explain any four functions of money. 6
Or
Briefly explain any four functions of the RBI.