ASSBSSMENT 3

ECONOMICS
Grade : 12 Max. Marks : 80
Date : 07. I 1.2024 No. of Questions : 13
Duration : 3 hours No. of Printed sides : 09
[Answers to this paper must be written on the answer booklet provided
The first 15 minutes is allotted for reading the question paper.
Answer all questions in Section A, Section Band Section C. Section A
consists of objective/ very abort answer questions.
Section B consists of abort answer questions.
Section C consists of long anawer questions.
The intended marks for questions or parts of questions are given in
brackets []

SECTION A - 16 MARKS
Question 1

(i) A business organisation located within India acquires a foreign-based

company. This transaction is recorded in the _ _ _ _ _ of
_ _ _ _ _ account within the Balance of Payment account of India.

(a) De bit side, current

(b) Credit side, current
(c) Debit side, capital
(d) Credit side, capital

(ii) The short-run shutdown point for the perfectly competitive firm occurs:

(a) where total revenue is just sufficient to cover total cost.

(b) when the demand curve facing the firm is tangent to its average
variable cost curve.
(c) where total revenue is just sufficient to cover all explicit costs
but not any implicit or imputed costs.
(d) when the firm is able to cover all of its fixed costs and part of its
variable costs.

(iii) If a more efficient technology was discovered by a firm, there would

be:
(a) an upward shift in the A VC curve.
(b) a downward shift in the AFC curve.
(c) an upward shift in the AFC curve.
(d) a fall in marginal cost.

. 1
 . . . . of demand for a textboo k is estima ted to be 1 no
liv) s
The pnce ela nci~ ·ce or quantit y deman ded. In this case:
matter \\·hat th~~inc .rease in price will result in a 10 percen t
{al ~ 1O ~ in the quantit y deman ded.
mcreo:~nt increas e in price \\ill result in a 10 percen t
(b) a l ,,. th . d
d~ase in e quantit y emand ed.
e.n 1ncl't'a~ in price will decreas e the total re\·enue of sellers.
(c) 8 decrease- in price
fdJ
,,ill increase the total revenu e of sellers.

5~ JI of Pn>?uction begins at the point:

(rj (a} of inlkcno n of the total produc t cur\'e.
(b) where aYerage and marginal produc ts are equal.
(c) "-here the t~tal produc t is at a maxim um.
(d) where margm al produc t is at a maximum.

(vi) A government incurs a budget deficit when:

(a) exports are less than import s
(b) exports are greater than import s
(c) taxes are less than govern ment outlay
(d) taxes are greater than govern ment outlay

(vii) Asserti~n (A): The govern ment can reduce the deflationary gap by
purcha smg gQ\'ern ment securit ies in the open market.
Reason (R): The Centra l Bank purcha ses government securities in the
open market to increas e the lending capacit y of commercial banks.
Options:

(a) Both Asserti on (A) and Reason (R) are true and Reason (R) is the
correct explan ation of Asserti on (A).
(b) Both Asserti on (A) and Reason (R) are true, but Reason (R) is not
the correct explan ation of Assertion (A).
(c) Asserti on (A) is true, but Reason (R) is false.
(d) Asserti on (A) is false, but Reason (R) is true.

{viii) Which of the following best describ es the role of the Central Bank as
a "banke r to the banks"?
{a) Issuing and manag ing the nationa l currenc y.
(b) Providing financi al advice and policy direction to the govern ment.
{c) Offering em~rgency funding to commercial banks facing liquidity
crisis.
(d) Conducting moneta ry policy through interes t rate adjustm ents.

2
 the Government of India set up
(be) "In the Annual Budget 2022..23 ' e" such proceeds from
disinvestment targets of ~65,000 cror · eceipts in the Government
disinvestment can be classified as_ _ _ r rnmcnt.
Budget as it leads to_ _ _ _of the Gove
(a) capital, decrease in assets
(b) revenue, increase in assets
(c) capital, increase in liabilities
(d) revenue, decrease in liabilities

(x) A depreciation of the U.S. dollar relative to foreign currencies will

make:
(a) foreign imports are less expensive in the United States.
(b) U.S. exports relatively less expensive in Japan.
(c) the demand for U.S. exports decreases.
(d) Does not affect import or export from the U.S.

(xi) If NDPrc is ~10,000 crores and NFIA is(-)~ 500 crores, how much will
be the national income?
(xii) How is the elasticity of supply different from supply of a commodity?
(xiii) What is meant by High Powered money?
(xiv) Why is the budget line negatively sloping?
(xv) The difference between average total cost curve and average variable
cost curve fall with an increase in output. Explain.
(xvi) State two assumptions on which the Law of Diminishing Marginal
utility is based.

SECTION B - 32 MARKS
Queatlon 2
(i) •Even at a high price, the demand for electricity has failed to decrease".
Keeping in mind the concept of elasticity. Justify the above statement. [2]

(ii) The Government of a state is planning to construct a by-pass around a

very busy market town. The new road would run through wet lands
bordering a local river where a wide range of different creatures live. So the
environmental ists are against the project. The educationalist and the others
wanted the money to be used to build a school and to improve the existing
poor health facilities. The Government decides to go ahead with the road
construction. What is the opportunity cost in this case? [2]

3
 ~-3 .
(iJ _EXplain the effect on equilibrium price and quantity when demand 18
perfectly elastic and supply increases. [2]
(ii} Calculate Average cost and Marginal cost if the fixed cost is t40. [2 ]
OUTPUT(UNITS) I 2 3 4 5 6
1VC 60 80 90 110 150 216

Question 4

(i) Does a change in price affect the supply of ancient coins, idols and
original manuscripts? Explain. [21

(ii) Explain the shapes of the total fixed cost curve and the average fixed
cost curve. Give one reason each to justify the shape of the two
curves. [2]
OR
(a) Diagrammatically explain the underlying principle behind the
convexity of the indifference curve. [2]
(b) Differentiate between Accommodating flow and Autonomous flow. (2]

Question 5

{a) What is meant by an average propensity to consume? Explain its

relationship with average propensity to save. [2]
(b) Why is the AR of a firm under perfect competition equal to MR? [2J

Question 6
Explain the concept of excess demand using aggregate demand and
aggregate supply curves. (4]

Queation 7 d t
lo ed to fixed factors, the total pro uc . .
If more variable factors are em~ Y d fi lly it decreases. Explrun this
.
increases initially at an 1ncreasing rate an ina , [4 )
law with the help of a diagram.
 Qu ea tjo n a
(i) erc ial Ba nk s cr ea te cr ed it? Ex pla in wi th th e he lp of
Ho w do th e Co mm (4)
8 nu me ric al cx tJm pJ c.
OR . ue w1. th th e ce nt ra l
(ii) ce nt ra tio n Of th . po we r of no te 1ss
'C
b
on c cxcluR1ve [4]
s a nu m be r of ad va nt ag es '. Ju sti fy.
an k ha

Q ue at io n 9
b 1 an d an sw er th e qu es tio ns th at follow.
St ud y th e dj ag ra m giv en co w
y

1
- • MR
-AR
Pr--~-----4~

Q ua nt it y- -• ·

in ue
at wi ll he lp th e pr od uc er de cid e if he sh ou ld co nt
(a) St at e th e ru le th [2]
th e sh or t ru n?
pr od uc in g in
R?
er m ax im ise hi s pr of its be yo nd ou tp ut OQ , M C< M
(b) H ow will a pr od uc {1]
Ex pl ai n.
pr of it of a pr od uc er un de r pe rfe ct co m pe tit io n
(c) Is it co rre ct to sa y th at P= M C bu t M C is de crea sin g? Ex pl ai n
at wh ic h
is m ax im um at a lev el [1]
ur e gi ve n.
w ith re fe re nc e to th e fig

5
 Question 10 SECTION C - 32 MARKS

(i) Define the La . .

identify h w of Equ1 marginal utility and with the schedule given
. . . ow much of commodity x and commodity y .11 t'lity-
ma.x:untsmg consumer buy. w1 a u t
Suppose
Y Furth a consumer has t24 . with him to spen d on two good s x an d
t:3
and iJ:•;~~: thtili~_pnce of each_ un_it ofX is f 2 and that of Y is
c·n u ty schedule 1s given below. [6]
I r
I Units 11 2 3 4 5 6

MUx 20 18 16 14 12 10
MUy 24 21 18 15 12 9

(ii) Discuss the concept of non-price competition with an example. [2]

Question 11

(iJ Explain how the equilibrium level of income can be determined with
the help of savings -investment approach. Illustrate your answer
diagrammatically. [6]
(ii) Terminal annuities and capital levy are some of the methods used by
governments to pay back a loan. Explain these two methods. [2]
OR
(iJ A new report from the Open Markets Institute and the Centre for
Journalism •shows how just a handful of Big Tech companies - by
exploiting existing market power and aggressively influencing other
firms - have already positioned themselves to control the future of
artificial intelligence and magnify many of the worst problems of the
digital age. •Discuss any four features of this market structure. [6]
How can you obtain personal disposable income from personal
{ii) [2]
Income?
 ~ 2
1lain tw0 difficulties in t1ie esn roa uon of nat
ion al inc om e by inc o-
(~ Esp
\2J
t,W.hod.
ion al Jnc oro e by Ou tpu t
ill ealaJla!e ND:Pfc by lnOD""' Method and liat
[6]
McthDd from tile folJoWlg info nna lion · t (in cro re)
;c
1, ltem S
SL.
rfl No
Gro ss valu e of out put at ma rke t pric e '
l sooo
500
'
/2 /' Val ue of mte rme diat e con sum ptio n
, 50
>
3 Isubsxlies 100
4 Ind irec t taxe s
I
1: 200
s b"FlA
150 0
;6 I Ren t
800
f1 JInte res t
100
[s Profit
I Wages and Sal arie s 100 0
f9
I . n of fixe d cap ital
Con sum ptw 500
10

11 Mix ed.inc om e of self emp loy ed 50

'
Em plo y . . 500
112 j IM!C Ulityers con trib utio n to soc ial

L
OR
(iJ
.
Fill in the blanlr..s:

NDPmp(-J ---- ---- --(,.J ---- ---- =N NP fc

G

NPfc (-)--------( -J·--------- (.,.J-----------=NDPmp [2]

7
IIH frro,n 111" '"11,,wlnu dot,,, <l4 11 .111 ,.,,. u,ttlm,ftl rn, ,,,,,, l,v f1,rum1J fvfiitlt~lt
~net rexr;,,ritt11 t11, n,n 1,1,,1 I

Hf,

Oovrrr1tnfl111 1,1,,1,111,1,n111uptln11 l(1(JU

rxr,c,ntfhnrn

Rent

Mixed Int ""w ul 11t'll t·111pl11ytcl t,(J(J

Jtmployt!~rt , , m I fl I >1111011 Io "''' iul ,.f!c: 11 r 11 y I( 1(1

MChcmt8

Compentiut ih11 ,,I rrriplr,,vr.~H rw,,c,

7 Net domcHtit. c11pill al fonn11tlun

8 Net exportH I()(>

9 NFIA , [j(J

10 Net indirect, t,ax (i(J(J

J). Private fin&) <~<mKurnpt i<m expenditure IJ,()()()

12. Consumpt.i<>n of fixed c;tJpitul 80

13 Change in H1t>ck 50

14 Profits 800

8
 Q ue sti on 13
:
pa ss ag e given below an d an sw er th e qu es tio ns th at follow
Re ad th e ow th : SB I .MD
R re du ct io n wi ll he lp ba nk s fa cin g lo w de po sit gr
CR
Te wa ri
BU SI NE SS ST AN DA RD
T
Ju l 22 20 24 f 5: 16 PM 1S

ba nk s
ca sh de po sit rat io or the pr op or tio n of de po sit s wh ich
Lo we rin g th e rs fac ing
y req uir ed to pa rk wi th the RBI will he lp the len de
ar e ma nd ato ril sa id on
th, SB I M an ag ing Di rec tor As hw ini Ku ma r Te wa ri
low de po sit gr ow
Mo nd ay .
cla rif yin g th at
tio ns for su ch a cu t ar e on , he tol d rep or ter s he re,
Co nv er sa as it is we ll
try 's lar ge st len de r do es no t ne ed su ch a red uc tio n
th e co un
nt.
pl ac ed on th e liq uid ity fro ad de d.
an y fo rm al re qu es t for a CR R cu t ma de eit he r, he
Th er e ha s no t be en e, Te wa ri
ev en t or ga nis ed by do me sti c rat ing ag en cy Ca ree dg
Sp ea kin g at an e ch all en ge
to loo k at va rio us av en ue s for he lpi ng tid e ov er th
sa id, "We ha ve qu es t to ge t
r de po sit gr ow th" , an d sp ec ifi ca lly me nti on ed a re
po se d by lo we et in ve stm en ts wh ile ref err ing
to CRR
pa r wi th ca pi tal ma rk
ba nk de po sit s at
an d SL R.
ted in
th od of cre dit co ntr ol de pic
(aJ De fin e th e Qu an tit ati ve me [2]
th is ex tra ct.
at e a po in t of dif fer en ce be tw ee n Qu an tit ati ve an d (21
(bJ St
ed it co ntr ol
Qu ali tat iv e me th od s of cr cre ati on .'
ca sh re se rv es in ba nk s a de ter re nt to cre dit
(c) 'Is la ck of f2 J
Ex pl ain . th e co mm erc ial ba nk s?
[1]
a de cr ea se in CR R he lp
Ho w wo ul d to
(d)
on e qu an tit ati ve po lic y th at th e ce nt ra l ba nk will follow
(e) Ex pl ai n an y (1]
cu rb in fla tio n.

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