Economics (214) - Oct' 2017 | NIOS SECONDARY Solved Papers

ECONOMICS (Oct’ 2017)
(214)
NIOS SECONDARY Solved Papers
Time: 3 Hours
Maximum Marks: 100


1. In the late 20th century economics is treated as:
a)         Science of welfare.
b)         Science of scarcity and choice.
c)          Science of growth in development.
d)         Science of sustainable development.
Ans.:- (d) Science of sustainable development.
2. Which of the following is a feature of a capitalist economy?
a)         Consumer’s Sovereignty prevails.
b)         Collective ownership of means of production.
c)          Reduction in inequalities of income and wealth.
d)         Co-existence of public and private sectors.
Ans.:- (a) Consumer’s Sovereignty prevails.

3. Problem of Allocation of Resources deals with:
a)         What goods and services shall be produced?
b)         How shall goods and services be produced?
c)          For whom shall goods and services be produced?
d)         All the above.
Ans.:- (d) All the above.
4. Maximum number of persons who can own partnership production units, is:
a)         10.
b)         20.               
c)          30.               
d)         40.
Ans.:- (b) 20.
5. Which is an example of ‘Collaboration’?
a)         Johnson and Johnson.        
b)         Airtel.
c)          Maruti-Suzuki Ltd.                
d)         Life Insurance Corporation.
Ans.:- (a) Johnson and Johnson.
6. The goods whose demand decreases when the income of the buyer increases are:
a)         Inferior goods.       
b)         Normal goods.
c)          Substitute goods.
d)         Complementary goods.
Ans.:- (a) Inferior goods.
7. Variable having a specific value, is called:
a)         Attribute.                 
b)         Continuous variable.
c)          Discrete variable.
d)         None of the above.
Ans.:- (a) Attribute.
8. Act which provides a consumer all the support and guidance is called:
a)         Standard of Weights and Measures Act, 1976.
b)         Prevention of Food Adulteration Act, 1954.
c)          Essential Commodities Act, 1955.
d)         Consumer Protection Act, 1986.
Ans.:- (d) Consumer Protection Act, 1986.
9. On the basis of your daily life experience give two examples of public goods being used by you.       2
Ans. Example of public goods are roads, and railways
10. What is meant by a developed economy and a developing economy?                            2
Ans.:- The countries are labelled developed or rich and developing or poor on the basis of real national and per capita income and standard of living of its population.
Developed economy:- Developed countries have higher national and per-capita income, high rate of capital formation i.e. high savings and investment.
Developing economy:- Developing countries are low on the ladder of development. They are sometimes also called underdeveloped, backward or poor countries.

11. Explain ‘product based’ division of labour.   2

Ans.:- Product based division of labour:- If a worker specializes in the production of a single good or service, it is called product based division of labour. In case of small farmers, a potter, a cobbler or a carpenter in a village we see that there is the use of product based division of labour.

12. Complete the following table:

Units of Labour

Total Product

Average Product

Marginal Product

1

10

-

10

2

30

15

-

3

54

-

24

4

-

21

30

Ans.:-

Units of Labour

Total Product

Average Product

Marginal Product

1

10

10

10

2

30

15

20

3

54

18

24

4

84

21

30

13. Explain how does the change in Government’s policy affect the supply of a good.   2

Ans.:- Government policy: Government policy also influences the supply of a commodity. For example it the government increases the rate of value added tax or sales tax on a commodity, it will increase the cost of production per unit which will decrease the supply of the commodity. On the other hand, a reduction in the tax on a commodity will decrease cost of production per unit and increase the supply of the commodity.

14. Draw a demand curve with the help of the data given below:

Price of Oranges (Rs)

Quantity demanded of Oranges

2

10

4

8

6

6

8

4

15. Explain the problem of ‘double coincidence of wants’ faced with the barter system of exchange.    2

Ans.:- A common problem with the barter system is the lack of double coincidence of wants. Double coincidence of wants mean that if one wants to exchange some good with another person then the latter must also be willing to exchange his good with the first person.

16. Explain how primary data are collected with the help of ‘Indirect investigation method’.     2

Ans.:- Indirect investigation: Under this method the investigator obtains information indirectly from a third person who is expected to know facts about the person about whom the enquiry is done. It is generally used by the commission appointed by the government.

17. Give two causes of soil degradation.                               2

Ans.:- Two causes of soil degradation are:

1. Excessive use of chemical fertilizers and pesticides, which causes soil acidification, increases salinity and alkalinity of the soil.

2. Water logging caused by excessive irrigation and failure to subsequently drain the water from the fields causes an increase in salt content of the soil.

18. With the help of examples give two ways of becoming a “Green Consumer” in the society.               2

Ans.:- Two ways of becoming a green consumer in the society are

1. A consumer must consume those products which do not cause damage to our environment. Plastic bag is one example which has caused serious damage to the environment.

2. People should use biodegradable products which can easily mix with soil and water after they are disposed off. Similarly people should save electricity, gas etc by judicious use.

19. What role does Macroeconomics play in the decision making by the government? 4

Ans.:- Macroeconomics is the branch of economics  its play in the decision making by the government. Macroeconomics helps government to take decisions to invest in infrastructure, education and many other aspects of development.

Macroeconomic policies include taxes, government spending and borrowing, exchange rate determinants, and monetary and credit rules. The primary goal of effective macroeconomic policies is to reduce uncertainty and risk in economic decision-making. A stable macroeconomic environment enhances prospects for growth and improved living standards.  But stability is not the only concern: these policies also have an important impact on how income is distributed across economic classes and across generations.

20. Explain the problem of ‘allocation of resources’ in a mixed economy.                            4

Ans.:- Resource Allocation in a mixed economy:- A mixed economic system combines government planning with the free market economy. No economy in the world is totally centrally planned or totally market oriented. Most of the economies today are mixed economies. In the mixed economic system the choice of goods and services to be produced by the private sector depends on the basis of profit motive. The choice of goods and services to be produced by the government depends on the basis of needs and requirements of the people. It combines the efficiency of production with the justice of distribution; the government owns scare resources to produce goods and services that they think their country and people need. People and firms in the private sector also own some scarce resources with the aim of making as much money as possible. Thus, mixed economic system attempts to combine the advantages of the market economic system with the advantages of the planned economic system

21. Explain the role and importance of firms and industries in providing employment and infrastructure for the development of the country.     4

Ans.:- Role and importance of firms and industries in providing employment and infrastructure

Employment to many persons:- Firms and industries are the source of employment to the people. Most of the people get employment in firms and industries by which they get income for the satisfaction of their wants. We cannot live without employment. So the importance of firms and industries can easily be understood.

Infrastructure for the development of the country:- They provide us energy, transport, communication, health, education and housing which is the basic requirement to provide infrastructure for the country. Without the development of infrastructure the all round development of the country is not possible. So we cannot deny the role and importance of firms and industries.  

22. What is meant by substitute goods and complementary goods? Give one example of each.                4

Ans.:- Substitute goods:-  Substitute goods are those goods which can easily be used in place of each other. Example of substitute goods are coke and pepsi, tea and coffee etc. If price of coffee increases, people will demand more of tea and thus demand for tea will increase.

Complementary goods:-  complementary goods are those goods which are used together in satisfying a particular want. Examples of complementary goods are car and petrol, ball pen and refill etc. If we have a car, we also require petrol to run it. If price of petrol rises, demand for car will decrease.

23. Explain money as ‘a medium of exchange’ and ‘a measure of value’.              4

Ans.:- Money as ‘a medium of exchange ‘ and ‘a measure of value’

1. Medium of Exchange:- The primary function of money is that it acts as a medium of exchange. This means that people can buy or sell goods and services with the help of money. Money is received by the seller who sells the good. Money is paid by the buyer who buys the good from the seller.

Example you pay Rs. 10 to buy a pen. The seller receives Rs. 10 from you by selling the pen. So a pen is exchanged for Rs.10

2. Measure of Value:- Another fundamental function of money is that it serves as unit of account or common measure of value. The value of a good is determined by multiplying its price with quantity sold in the market. Since the price is expressed in monetary units, the value of a good is also expressed in monetary term.

Example Let price of rice be Rs. 20 per kilogram. One bag full or rice weights 25 kilograms. Then the value of the bag of rice is Rs. 20X25=Rs.500

24. Suppose, you have to open a savings account in UCO Bank in your locality. Explain how will you do so?

Ans.:- Any person approved by the Bank may open a Savings Bank Account. He she has to sign the relative Account Opening form in presence of authorized official of the Bank upon agreeing to comply with the rules governing Savings Bank Accounts.

The Bank will not open an account which is to be operated under a cross mark or signature by the hand of another person.

Two passport size photographs (three, if the account is to be operated by thumb impression) are required to be submitted by the depositors at the time of opening of a Saving Bank Account.

Every depositor while opening a Savings Bank Account shall be required to furnish PAN/GIR no. on the Account Opening Forms if the depositor is an Income Tax Assessee, or if not, to give declaration on form no. 60/61 as applicable.

25. What is meant by central tendency? Give two important precautions to be taken while using arithmetic mean as a measure of central tendency.    4

Ans.:- Tendency of data to cluster towards the central location or value is called central tendency.

                Two important precautions to be taken while using arithmetic mean as a measure of central tendency are:-

1.It is important to note that arithmetic mean is a theoretical value, which may not be represented by actual fact. Say for example, if in all there are 27 children in 10 families. Average number of children per family would be 2.7 (27/10). It is unrealistic. There can be either 2 or 3 children per family but not 2.7.

2. Arithmetic mean cannot be qualitative data such as honesty, bravery, loyalty and beauty etc.

26. Describe any tow specific areas of economics where the use of data is very important.         4

Ans.:- Some specific areas of economics where the use of data is very important are as follows:

1. In economic planning:- The data of the previous years are generally used to prepare future plan. For example, it we have to plan expenditure to be incurred on primary education for a year, data regarding number of students who were enrolled up to class fifth in previous years and the expenditure incurred during those years is important to look at. Forecasting is done on the basis of economic planning.

2. To determine national income:- In order to know the state of our economy it is important to know the national income besides various other things. But national income can be determined by using certain methods which require quantitative information on various things such as wages and salaries received by workers, rent received for use of land and building, interest received for use of funds and profit earned by the entrepreneurs in the economy in the given ear.

27. Calculate the arithmetic mean form the following data by the shortcut method :

X

No. of Students

0

20

1

10

2

70

3

60

4

40

28. Explain how the frequent occurrence of famines had been the worst part of the British rule in India.4

Ans.:- The worst part of British rule in India had been the frequent occurrences of famines. Famine is a situation wherein many people do not get food to eat and die from hunger and diseases. Famine occurred nearly 33 times during whole British period. The most devastating famine was the Bengal famine of 1943, just four years before independence. More than 1.5 million people died at this time due to lack of food. Some reasons for occurrence of famines were as follows:

a. Bad rainfall upsetting food grain production since irrigation facilities were not available. Agriculture was dependent on rainfall.

b. Poor people had not enough money to purchase food grains from the market.

29. Explain the ‘Consumer Redressal System’ in India.   4

Ans.:- Consumer redressal system is a system under which the consumers can file a complaint in a consumer court and demand justice when they are cheated by the sellers or manufacturers of the commodity or service they buy. It comprises of the Laws to protect the interest of the consumers and the Institutions to enforce the law to uphold consumers’ rights. Thanks to the government, we have consumer laws make through legislations in our country with a special focus on consumer education. The purpose is to help the people understand their rights and responsibilities as consumers and to redress their grievance. There are also existence of Institutions in the form of government departments and consumer courts to deal with the grievances of the affected consumers.

30. Explain any four features of monopoly market.         6

Ans.:- Features of monopoly market:-

(i) A single firm:- The monopolist is the only producer of the good. He has got no competitor. He is the only one  who rules the market with his commodity.

(ii) No close substitute of the commodity:- There are no close substitutes of the commodity produced by the monopolist. “Close substitute” means another similar product having same use. The monopolist produces all the output in a particular market.

(iii) Price maker:- The monopolist being the sole seller of the commodity in the market decides the price of the commodity as there is no one to challenge his price. The monopolist is a ‘price-maker’. It does not mean that monopolist can fix both price and the quantity demanded. It the fixes a high price, less quantity of the commodity will be demanded.

(iv) No Entry of New Firm:- It is not possible for new firms to enter in the market and compete with the single seller. Being the single seller or firm, there is no difference between firm and industry under monopoly.

31. Give the factors that led to the decline of handicraft industry in India.           6

Ans.:- Decline of Handicraft Industry:- Before the British came to India, Emperors and kings were ruling this land. They promoted the interest of local artisans, carpenters, artists, weavers etc. who were e very good at making beautiful paintings, decorating walls, designing textiles and jewelry, tailoring, making furniture, toys and idols of stones and metals etc.  These people were using their labour and local skills to create these things. A lot of concentration and long time was required to create such things. But when the British came they defeated the Kings and took over their kingdoms. Towns were destroyed and with this the handicraft industry was also faced closure.

An important part of Indian handicraft was the textile handicrafts. In the latter half 19th century England was experiencing changes in production technology. Machine was replacing human labour to produce goods. Producing goods at large scale was becoming easier. More factories were coming up. The British could bring their machine made textiles and sell in India at a cheaper price and also in large quantities. The British government also made policies to help the British producers only. So Indian handicraft suffered.

33. Why did the government of India adopt five year plans to achieve development?   6

Ans.:- A major feature of Indian economy after independence has been its consistent effort to achieve development through the process of economic planning. This is a very positive phenomena going on for the past 60 years.

The government of India adopted five year plans beginning with the first five year plan in 1951. The duration of this plan was 1951 to 1956. Accordingly the second five year plan began in the year 1956 and ended in 1961. And so on.

The government of India has been planning to solve its economic as well a various other problems. Planning  is necessary because the problems are not easy to solve in a day or two. Take for example the problem of increasing production of food grains. It requires allocation of resources in the form of man power, raw materials, machinery, money etc. which must be used in proper manner so that there are minimum wastages. Similarly there are many other problems as well, such as – problem of giving employment or jobs to so many young people every year problem of improving the standard of living of poor people, providing safe drinking water to rural population, building roads to connect different villages and towns of India etc. we can count thousands of such problems for which planning is necessary.

34. Mention the various kinds of knowledge required on ‘Consumer Awareness’ by the consumer.       6

Ans.:- Consumer awareness refers to the combination of the following:

(i)  The knowledge of the product purchased by the consumer in terms of its quality. For example the consumer should know whether the product is good for health or not, whether the product is free of creating any environmental hazard or not etc.

(ii) The education about the various types of hazards and problems associated with marketing of a product- For example, one way of marketing a product is advertisement through news papers, television etc. consumers should have proper education about the bad effects of advertisement. They must also verify the contents of the advertisement.

(iii) The knowledge about ‘Consumer Rights’- This means that, first, the consumer must know that he/she has the right to get the right kind of product. Secondly, if the product is found out to be faulty in some manner, the consumer should have knowledge of claiming compensation as per the law of the land.

(iv) The knowledge about consumer’s own responsibilities-This implies that consumers should not indulge in wasteful and unnecessary consumption.

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