AHSEC Class 12 Economics Question Paper 2012

PART - A

1. (a) Opportunity cost is also called the ____ cost.              1

(b) In economics, it is generally assumed that the consumer is an individual.        1

(c) What is an inferior good?                    1

(d) Total Cost (TC) = ____ + Total Variable (TVC)                1

(e) State two main features of a perfectly competitive market.            1

2. Mention three basic problems of an economy.        3

3. Draw a vertical demand curve and state the nature of price elasticity on it.              3

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 P_X and P_Y respectively. State the budget equation.    3

5. If the total product with 5 units of a variable factor is 56, calculate the average product. If the variable factor is increased by 1 more unit as a result of which the total product becomes 57, what will be the marginal product?      3

6. State the conditions needed for a firm to maximize profits by producing positive output in a competitive market.  3

7. Suppose there are two consumers in a market. The demand function of the first consumer is –

D₁(P) = 30 – P (When P< 30)

And D₂ (P) = 0 (When P>30)

The demand function of the second consumer is –

D₂ (P) = 30 – 2P (When P< 10)

And D₂ (P) = 0 (When P>100)

Find out the market demand function.            4

8. Explain the relationship between average product and marginal product with the help of diagram.  4

9. The production function of a firm is given as Q = 2L^1/2K^1/2. Calculate the level of output when it employs 25 units of labour and 16 units of capital.                 4

10. State and explain the law of demand.               6

11. The short run total cost (TC) function of a production unit is given below. Find out the total variable cost (TVC), average fixed cost (AFC), average variable cost (AVC) and average cost (AC) schedule.   6

Or

Show with the help of diagram that total cost is the vertical sum of total fixed cost and total variable cost.      6

12. Show how a monopolist earns profit by using total cost curve and total revenue curve.        6

Or

Explain the relation among the TR, AR and MR of a monopoly firm with the help of an imaginary table and diagram. 6

PART - B

13. (a) In a modern economy, people hold money broadly for two motives. One is transaction motive, what is the other.                 1

(b) Name the monetary authority that issues currency notes in India.              1

(c) What is aggregate demand?              1

(d) Given the marginal propensity to save is 0.3, find out the income multiplier.      1

(e) Y = C + I + G + NX – In this equation what does NX refer to?           1

14. Explain how to calculate gross national product from gross domestic product.        3

15. Distinguish between gross investment and net investment.            3

16. What is net national product at factor cost?          3

17. What is devaluation of currency?            3

18. What is gold standard?         3

19. Explain the concept of ex-ante consumption.               4

20. What are the sources of government revenue?                 4

21. When does a government incur budget deficit? Suppose the total government spending G = 150 and tax revenue T = 0.20Y. Now if the level of national income (Y) is 20000, what is the condition of government budget?              1+3

22. Explain the circular flow of income in a simplified economy with two sectors – households and firms.              6

Or

Explain the income method of calculating gross domestic product (GDP).          6

23. Explain the transaction demand for money.                    6

Or

What are the instruments of monetary policy used by RBI? Explain any two of them.         6

24. Explain the relationship between investment multiplier and marginal propensity to consume.     6