Sample Paper - 2008
Class – XII
Subject – Economics
Time: 3 hours M.M 100
1. All questions in both the sections are compulsory.
Marks for questions are indicated against each.
2. Questions 1 -5 and 17-21 are very short answer questions carrying 1 mark.
They are to be answered in one sentence each.
3. Questions 6-10 and 22-26 are short answer questions carrying 3 marks each. Answers to them should not normally exceed 60 words each.
4. Questions 11-13 and 27-29 are also short answer questions of 4 marks each. Answers to them should not normally exceed 70 words each.
5. Questions 14- 16 and 30-32 are long answer questions of 6 marks each. Answers to them should not normally exceed 100 words each.
6. Answers should be brief and to the point and the above word limits be adhered to as far as possible.
7. All parts of the question should be answered at one place.
INTRODUCTORY MICRO ECONOMICS
- Define marginal revenue. 
- When APP is at its maximum, what is the relation between MPP and APP?
- Define producer’s equilibrium. 
- A fall in price of a good results in decrease in expenditure on it. What is its elasticity of demand? 
- What do returns to scale refer to? 
- Explain the central problem of ‘for whom to produce’ with the help of an example. 
- Given below is the utility schedule of a consumer for commodity X. The price
Of the commodity is Rs. 3 per unit. How many units should the consumer purchase to maximize satisfaction? (Assume that utility is expressed in utils and 1 util= Re.1) Give reasons for your answer.
Consumption Total Utility
( units) ( utils) 
- How does a change in the price of inputs affect the supply curve of a commodity?
- State the ‘law of demand’ What is meant by the assumption ‘other things
remaining the same’ on which the law is based? 
- What will be the price elasticity of supply if the supply curve is a positively
sloped straight line? 
- Explain the relationship between average variable cost and marginal cost with the
help of a diagram? Can AC fall when MC is rising? 
- Calculate total variable cost and total cost from the following cost schedule of a
Firm whose fixed costs are Rs. 10. 
Output ( units)
13. Under perfect competition the seller is a price taker, under monopoly he is a price
maker. Explain. 
14. Distinguish between: a) normal goods and inferior goods with
examples, b) substitute goods and complementary goods with examples.
c) When price of a good falls by 10 percent, its quantity demanded rises
from 40 to 50 units. Calculate price elasticity of demand by percentage method. [2,2,2]
15. How is the equilibrium price of a good determined? Explain with the help of a diagram a situation when both demand and supply curves shift to the right but equilibrium price remains the same. 
16. Using a suitable diagram and illustration explain the three stages of production when one factor input is variable. 
INTRODUCTORY MACRO ECONOMICS
17. When does a situation of deficient demand arise in an economy? 
18. If MPC and MPS are equal, what is the value of multiplier? 
19. A government budget shows a primary deficit of Rs.4, 400 crores. The revenue expenditure on interest payment is Rs. 400 cr. How much is fiscal deficit? 
20. Define foreign exchange rate. 
21. What is consumption function? 
22. What is the nature of transactions that are recorded in current account of the
Balance of Payments account? Is import of machinery recorded in current
account or capital account? 
23. Can there be a fiscal deficit in a government budget without a revenue deficit?
24. Explain the basis of classifying government receipts into revenue receipts
and capital receipts. Give two examples of each. 
25. List three sources each of demand and supply of foreign exchange. 
State 3 merits of a flexible exchange rate system
26. From the following data calculate net value added at factor cost:
Rs. In crores
(i) Sales 500
(ii) Opening stock 30
(iii) Closing stock 20
(iv) Purchase of intermediate products 300
(v) Purchase of machinery 150
(vi) Subsidy 40
(vii) Depreciation 20 
27. Explain the ‘bankers bank’ and ‘supervisor’ function of Central bank. 
28. Explain the ‘medium of exchange’ and ‘standard of deferred payments’
function of money. 
29. Explain and graphically represent the concept of inflationary gap. Explain
any one measure of removing this gap. 
- Will the following be included in domestic factor income of
Give reasons in support of your answer.
1. Rent received by a resident Indian from his property in
2. Profits earned by a branch of a foreign bank in
3. Salaries received by Indian residents working in American embassy in
4. Purchase of new shares of a domestic firm. 
31. Explain the meaning of equilibrium level of income and output with the help of saving and investment curves. If planned expenditure is less than planned output, what changes will take place in the economy? 
32. Calculate Net Domestic Product at factor cost and Personal Income from the following data: [3+3]
1. Change in stock 5
2. Personal taxes 40
3. Private final consumption expenditure 480
4. Net Indirect taxes 40
5. Savings of non-departmental enterprises 15
6. Net current transfers from rest of the world (-) 10
7. Net domestic fixed capital formation 70
8. Net factor income from abroad 10
9. Undistributed profits 5
10. Current transfers from government 20
11. Corporation tax 25
12. National debt interest 30
13. Net Exports (-) 30
14. Government final consumption expenditure 100
15. Income from property and entrepreneurship accruing to
Government administrative departments 20