CBSE SAMPLE PAPER-3 (solved)

ECONOMICS
Class XII
Time allowed: 3 hours

Maximum Marks: 100

General Instructions:
a) All questions are compulsory.
b) The question paper comprises of two sections, A and B. You are to attempt both the sections.
c) Questions 1 to 5 in section A and 16 to 18 in section B are MCQs of one mark each. Choose
the correct option.
d) Questions 6 to 8 in section A and 19 to 23 in section B are three marks questions. These are
to be answered in about 30 words each.
e) Questions 9 to 11 in section A and 24 to 25 in section B are four marks questions. These are
to be answered in about 50 words each.
f) Questions 12 to 15 in section A and 26 to 29 in section B are six marks questions. These are
to be answered in about 70 words each.
Section A
1.

2.

3.

An economy produces inside the PP curve when:

a)

Resources are efficiently used

b)

There is scarcity of resources

c)

Resources are inefficiently used

d)

None of the above

Which of the following would be complements?

a)

Bread and butter

b)

Car and petrol

c)

Tea and coffee

d)

All of the above

When demand for a good falls due to rise income of the comsumer, what is the change in
demand called?

4.

5.

6.
7.

a)

Expansion of demand

b)

Contraction of demand

c)

Increase in demand

d)

Decrease in demand

PPC is downward sloping because of:

a)

MRT is diminishing

b)

Constant MRT

c)

Increasing MRT

d)

All of the above

b)

Increases

When MU is negative, TU:

a)

Remains constant

c)

Falls

d)

None of the above.

What factors lead to a rightward shift of PPC?

Total Fixed costs of a firm are Rs 100. Its average variable cost at different levels of output is
given. Calculate total cost and marginal cost.
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Output (units)

TC (Rs.)

60

56

60

64

8.

When is the supply of a commodity said to be (i) elastic (ii) inelastic (iii) unitary elastic?

9.

Mention the assumptions of Indifference curve analysis.

10.

Draw Total Fixed Cost and Average Fixed Cost curves. Explain their shape.

11.

As a result of high wage settlement in New York City due to taxi strike of several years
ago, taxi owners increased taxi fares. Was this the right decision?

12.

Under perfect competition, MR=AR, but under monopoly, MR<AR. Explain.

13.

What will happen if the price prevailing in the market is

(i)
(ii)

14.

below the equilibrium price?

above the equilibrium price?

At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to
30. The price elasticity of firms supply is 1.25. what quantity will the firm supply at the new
price?

15.

Explain with the help of diagrams the effect of the following changes on the demand of a
commodity
:
(i) An unfavourable change in the taste of the buyer for a commodity.
(ii) A fall in the income of its buyer if the commodity is inferior.
SECTION B

16.

17.

18.

During the Great depression, there was a :

a) Increase in aggregate demand

b) Fall in aggregate demand

c) No change in aggregate demand

d) None of the above.

When will NDPMP be less than NDPFC?

a) B. Subsidies are less than indirect taxes.

b) Subsidies are more than indirect taxes.

c) B. Subsidies are equal to indirect taxes.

d) None of the above.

Currency depreciation takes place when:

a) There is an increase in domestic currency price of the foreign currency.
b) There is a decrease in domestic currency price of the foreign currency.
c) There is an increase in foreign currency price of domestic currency.
d) None of the above.

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19.

Give meanings of : (i) involuntary unemployment (ii) full employment

(iii) under

employment equilibrium.
20.

Distinguish between factor payment and transfer payment.

21.

What is effective demand? How will you derive the autonomous expenditure multiplier when
price of final goods and rate of investment are given?

22.

What is budget? Distinguish between balanced, surplus and deficit budget.

23.

From the following, calculate gross value added at factor cost by it:
(Rs. In lakhs)
Net indirect taxes
20
Purchase of intermediate products
120
Purchase of machines
300
Sales
250
Consumption of fixed capital
20
Change in stock
30

24.

State various general utility services provided by the commercial banks.

25.

If you were the finance minister of India, which taxes would you prefer : direct or
indirect taxes and why ?

26.

Define (i) Currency Deposit Ratio (Cdr) (ii) Reserve Deposit Ratio (rdr) (iii) High Powered
Money (iv) Money Multiplier.

27.

Explain the steps involved in estimating national income by Income method. Also, explain
some of the precautions taken in the income method.

28.

What is foreign exchange rate? Distinguish between fixed and flexible exchange rate. State
two merits each of fixed and flexible exchange rate.

29.

Given MPC = 0.8 and investment at all levels of income is Rs 40 crores, complete the
following table:
Income

consumption

60

Savings

Investment

AD

100
200
300
400
500
600
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AS = Y