# AHSEC Class 12 Question Papers: Economics' 2020 2020
ECONOMICS
Full Marks: 100
Pass Marks: 30
Time: Three hours
The figures in the margin indicate full marks for the questions
PART – A
1. (a) What does a Production Possibility Curve indicate?                 1
(b) If an increase in the price of good X increases the demand for good Y, then how the two goods are related?            1

(c) Total Variable Cost (TVC) will be _______, when total product is zero. (Fill in the blank)                       1
(d) A firm earns normal profit when –              1
1)         AR > AC.
2)         AR = AC.
3)         AR < AC.
4)         MR = MC. (Choose the correct answer)
(e) In a centrally planned economy, which of the following takes all economic decisions?      1
1)         Central Bank.
2)         Market.
3)         Government.
4)         Both Government and Central Bank.
(f) What are the shapes of AR and MR curve for a firm under non-competitive market structure?  1
2. Mention two reasons that give rise to economic problems.                     2
3. What is a budget line? Why does it slop downward?                   1+1=2
4. If a unit tax is imposed, how does it impact the short-run supply curve a firm? Show with the help of diagram.                        2
5. What is ‘break-even point’ of a firm? At which point of the AC curve, a firm under perfect competition breaks-even? 1+1=2
6. What does price elasticity of supply mean? Briefly explain.              2
7. What is a monopolistic competitive market?                   2
8. Discuss four features of indifference curve.                    4
9. Define and draw average cost and average variable cost curve. Why these two curves can’t touch each other?                3+1=4
Or
The Total Cost (TC) scheduled of a production unit is given below. Find out TFC, TVC, AC and MC.
 Quantity Produced TC 0 1 2 3 4 5 6 7 10 40 60 80 95 110 130 160

10. Mention four differences between perfect competition and monopoly.               4
11. The demand and supply functions of a commodity is given by
Qd = 100 – 2P
Qs = 2P - 60
Find :
1)         Equilibrium price.
2)         Equilibrium quantity.                3+1=4
Or
Explain with the help of a diagram, how shifting of the supply curve of a commodity affects its equilibrium price and output.                                 4
12. What do you understand by returns to a scale? Write the meaning of constant, increasing and decreasing returns to scale.             1+3=4
Or
State the reasons behind the working of the law of diminishing marginal product.                    4
13. State and explain the law of demand with the help of an imaginary scheduled and diagram.  6
Or
Calculate price elasticity of demand by expenditure method:
1)         If an increase in price from Rs. 10 to Rs. 12 per unit lowers quantity demanded from 25 units to 20 units.
2)         If an increase in price per unit from Rs. 8 to Rs. 10 lowers quantity demanded from 20 to 16 units.
3)         If a decrease in price from Rs. 12 to Rs. 8 per unit increases quantity demanded from 20 to 28 units.        2+2+2=6
14. Define:
1)         Total Product (TP).
2)         Average Product (AP).
3)         Marginal Product (MP).
Explain the relation between AP and MP with the help of suitable diagram.         1+1+1+3=6
Or
1)         What is production function?
2)         What do you mean by fixed factor and variable factor of production? Give examples.                         2
3)         The production function of a firm is given Q = 2L2K2. Find out the maximum possible output that the firm can produce with 5 units of L and 2 units of K. What is the maximum possible output the firm can produce with zero (0) units of L and 10 units of K?              3
PART – B
15. (a) What is the relation between MPC and MPS?                       1
(b) What is investment?                       1
(c) What do you mean by ‘velocity of circulation’ of money?                       1
(d) Who is known as the ‘lender of last resort’?                         1
(e) What is government budget?                      1
(f) In which year GST came into effect in India?                  1
16. Define intermediate good. How intermediate goods are different from capital goods?                           1+1=2
17. What is investment multiplier? If Rs. 200 crore increases in investment increases income by Rs. 800 crore, then what will be the value of investment multiplier?                  1+1=2
18. Write the differences between ex-ante investment and ex-post investment.                 2
19. Mention two points of superiority of Selective Credit Measures over Quantitative Credit Control Measures.                 2
20. Write two differences between revenue expenditure and capital expenditure.                2
21. What do you mean by devaluation of currency? How does it affect the import of a country?                        1+1=2
22. Define GDP, Can GDP be used as an index of welfare of a country? Justify your answer.                       1+3=4
23. How does the central bank use its quantitative credit control measures to control inflationary situation of an economy?                     4
Or
Write a note on ‘demonetization’.                   4
24. What is a Deficit Budget? Why is deficit budget is considered beneficial than a surplus budget for a developing economy?                   1+3=4
25. Mention four differences between Direct taxes and Indirect taxes.                  4
26. (1) What is balance of payment?                        1
(2) What are the two main components of balance of payment?                       1
(3) Write two differences between balance of payment and balance of trade.           2
Or
1)         Open Economy.
2)         Exchange Rate.
27. Explain the procedure of calculating National Income by value-added method.             6
Or
From the data given below calculated:
1)         GDP at factor cost.
2)         GNP at market price.
3)         NNP at factor cost.

 a)          Consumption Expenditure b)         Investment Expenditure c)          Government Expenditure d)         Export e)         Import f)           Net factor income from abroad g)          Indirect taxes h)         Subsidies i)            Depreciation Rs. 2,000 crores Rs. 1,200 crores Rs. 450 crores Rs. 80 crores Rs. 95 crores Rs. 60 crores Rs. 90 crores Rs. 80 crores Rs. 30 crores

28. Explain the process of equilibrium income determination of an economy with the use of aggregate demand and aggregate supply curves.                              6
Or
What is aggregate demand? Discuss the components of aggregate demand.          1+5=6

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