Subject: Economics
Class XI
Time Allowed: 3 hours
Max. Marks: 80
General Instructions:
(1) This question paper contains two parts:
Part A: Statistics for Economics (40 marks)
Part B: Introductory Micro Economics (40 marks)
(2) Marks for questions are indicated against each question.
(3) Q. No. 1 to 10 and Question No. 18 to 27 (including two Case Based Questions) are 1 mark questions and are to be answered in one word/sentence.
(4) Case Based Questions (CBQ’s) are Question No. 7-10 and Question No. 25-27.
(5) Question No. 11-12 and Question No. 28-29 are 3 marks questions and are to be answered in 60-80 words each.
(6) Question No. 13 to 15 and Question No. 30 to 32 are 4 marks questions and are to be answered in 80-100 words each.
(7) Question No. 16 to 17 and Question No. 33 to 34 are 6 marks questions and are to be answered in 100-150 words each.
(8) Answers should be brief and to the point and the above word limit be adhered to as far as possible.
PART A: STATISTICS FOR ECONOMICS
1. The activities performed out of love, benevolence, patriotism, etc. are not ___________ (Economic activities/Non-economic activities). (Fill up the blank with correct alternative).
2. The collector of Primary data is called: (Choose the correct alternative)
(a) Investigator
(b) Enumerator
(c) Both (a) and (b)
(d) Neither (a) nor (b)
3. When both lower and upper limits of a class are considered such classes are called ________________ (Inclusive/Exclusive). (Fill up the blank with correct alternative).
OR
A characteristic which is capable of being measured and changes its value over time is called a ______________ (Variable/Series). (Fill up the blank with correct alternative).
4. The data is arranged for calculation of median in: (Choose the correct alternative)
(a) Ascending order
(b) Descending order
(c) Any one out of (a) and (b)
(d) None of the above
5. Identify the correct pair of statement from the following column I and Colum II. (Choose the correct alternative)
| Column I | Column II |
| (a) Scatter Diagram | (i) Influenced by the size of extreme values |
| (b) Good statistical average | (ii) Not be rigidly defined. |
| (c) Perfect negative correlation | (iii) (+) 1 |
| (d) Standard deviation | (iv) Based on all values |
Alternatives:
(a) A – (i)
(b) B – (ii)
(c) C – (iii)
(d) D – (iv)
6. Which of the following is a feature of median? (Choose the correct alternative)
(a) It divides the data into two halves
(b) It is not affected by extreme values
(c) Simple to calculate
(d) All of the above
Read the following passage and answer Questions 7-10 on the basis of the same:
Inflation has been a nagging problem plaguing the economies across the world at various times. As negative effects of inflation are enormous, adoption of various anti-inflationary policies becomes inevitable. Inflation targeting and its measurement have become the prerequisites in the macroeconomic policy matrix of the economies. Inflation being a significant economic concept affecting decision making in business firms or other management units, there is an attempt to resolve the dilemma whether Consumer Price Index (CPI) is to be adopted or Wholesale Price Index (WPI) as a measure of Inflation. Though most of the major economies of the world have opted for CPI, WPI has its own merits too. As CPI and WPI differ conceptually in terms of their purpose and use, commodity coverage, weights, associated markets and the base year, both often show difference in direction and magnitude. Consequently, the choice continues to be difficult, if not arbitrary.
7. The price of an article which was 150 in 2005 increased to 300 in 2007. The increase in 2007 On the base year 2005 was 100%. So using 2007 as base year the decrease in 2005 should have been: (Choose the correct alternative)
(a) 150%
(b) 100% (c) 200% (d) 50%
8. Index Number presenting general change in the wholesale prices of commodities is known as______________ (Simple Index/Wholesale price index). (Fill up the blank with correct alternative).
9. Wholesale Price Index is used for: (Choose the correct alternative)
(a) Forecasting demand and supply
(b) Helps in determining real changes in aggregates
(c) Indicator of Rate of inflation
(d) All of the above
10. ______________ (CPI/WPI) is used as price deflator of income. (Fill up the blank with correct alternative).
11. Explain the Geographical method of classification of Data.
OR
Explain any three merits of a statistical table.
12. Construct a histogram by given data:
| Marks | Students |
| 0 – 10 | 5 |
| 10 – 20 | 10 |
| 30 – 30 | 15 |
| 30 – 40 | 20 |
| 40 – 50 | 10 |
| 50 – 60 | 5 |
13. Present the following data by a percentage subdivided bar diagram:
14. State, giving valid reasons, whether the following statements are true or false:
(a) An average alone is not enough to compare series.
(b) Arithmetic mean is a positional value. 4
OR
“A measure of dispersion is a good supplement to the central value in understanding a frequency distribution”. Comment.
15. Using the simple aggregative method, calculate the index number for the given data
| Commodity | A | B | C | D |
| P1 | 15 | 22 | 20 | 27 |
| P0 | 10 | 20 | 18 | 25 |
16. Calculate the correlation coefficient between the heights of fathers in inches (X) and their sons (Y)
| X | 65 | 66 | 57 | 67 | 68 | 69 | 70 | 72 |
| Y | 67 | 56 | 65 | 68 | 72 | 72 | 69 | 71 |
17. Find out Mean and Standard Deviation of the marks obtained by 10 students in statistics.
| S. No | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Marks | 43 | 48 | 65 | 57 | 31 | 60 | 37 | 48 | 78 | 59 |
OR
Calculate median from the following frequency distribution.
| Class Interval | Frequency |
| 0-20 | 4 |
| 20-40 | 10 |
| 40-70 | 26 |
| 70-120 | 8 |
| 120-200 | 2 |
PART A: Introductory Microeconomics
18. Which of the following can be referred to ‘point of satiety’? (Choose the correct alternative)
(a) Marginal Utility is negative.
(b) Marginal Utility is zero.
(c) Total Utility is rising.
(d) Total Utility is falling.
19. Law of demand states that there is: (Choose the correct alternative)
(a) Inverse relationship between price of a goods and its quantity demanded.
(b) Negative relationship between price of a goods and its quantity demanded.
(c) Both (a) and (b)
(d) None of these
20. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Indifference curve are convex to the origin
Reasons (R): Increasing Marginal Rate of Substitution.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
21. Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I.
| Column I | Column II |
| (a) Total revenue | (i) ATC must rise |
| (b) MC > ATC | (ii) Stage III |
| (c) MP is negative | (iii) Qx = f(L,K) |
| (d) Production Function | (iv) Sum of marginal revenues |
Choose the correct alternative:
(a) iii, iv, ii, i
(b) iv, i, ii, iii
(c) ii, i, iii, iv
(d) i, iii, iv, ii
22. Read the following statements – Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Fall in input prices leads to increase in supply of goods.
Reasons (R): Increase in supply is when supply rises due to a factor other than the own price of the goods.
Alternatives:
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true but Reason (R) is false.
(d) Assertion (A) is false but Reason (R) is true.
23. Law of supply states that, other things being equal, there is a _____________ (Positive/Negative) relationship between supply and price of a commodity. (Fill up the blank with correct alternative).
OR
_________ (Average/Marginal) revenue is called Price. (Fill up the blank with correct alternative).
Read the following passage carefully and answer the question numbers 24 – 27 on the base of the same.
Rationing of the good is the means by which government ensures equitable distribution of resources by putting a restraint on the purchase of the commodity in the market for the rich people. Rationing is the controlled distribution of scarce resources, goods, or services and it controls the size of the ration, one’s allotted portion of the resources being distributed on a particular day or at a particular time. In economics, rationing is an artificial restriction of demand and is done to keep price below the equilibrium (market-clearing) price determined by the process of supply and demand in an unfettered market. Thus, rationing can be complementary to price controls which can be explained through indifference curve approach.
There are two kinds of rationing done by the government to reduce consumption- price rationing and non-price rationing. By rationing, we mean exercise tax and by non-price rationing, we mean all types of control on the quantity consumed. Non-price rationing could be done by giving away of coupons that would enable low-income families to obtain some good at affordable prices, which could not be possible if the prices were to increase alone. With coupon scheme, it would develop a black market for coupons, which would paradoxically increase the utility for those who are in need of that commodity by collection of more of these coupons from those who are not in need. This ensures greater marginal utility for those people who are in need of the commodity and will provide exchange of money to those who sell these coupons. For this, it is necessary for the government to encourage trading of the coupons.
The major importance of introducing rationing is to keep the price of important commodity under control, as for a necessary commodity, there will be an excessive demand in the market which will drive their price up in the market and high prices leads to reduction of consumption and utility for those who could not afford it. This ensures that the resources are planned in favor of the poor people of the country and restricting the rich people to ensure excessive purchase of limited resources of the country. This ensures development and equality of welfare and utility between the rich and the poor people. Rationing of the good is done by the government and not the private sector. There is the same limit put on every person on the budget spending to which people could buy the commodities and within the limit, one could buy any amount of the commodity.
24. Which of the following statement regarding utility is not true? (Choose the correct alternative)
(a) It is satisfying power of a commodity.
(b) A utility is always measurable.
(c) It helps a consumer to make choices.
(d) It is purely a subjective entity.
25. Which of the following conditions can lead to change in budget set? (Choose the correct alternative)
(a) When the level of income changes
(b) When price of one goods changes
(c) When price of both the goods changes
(d) All of the above
26. Marginal utility diminishes, as consumption of commodity ________. (Increases/Decreases) (Fill up the blank with correct alternative).
27. The consumer is in equilibrium at a point where the budget line : (Choose the correct alternative)
(a) Is above an indifference curve
(b) Is below an indifference curve
(c) Is tangent to an indifference curve
(d) Cuts an indifference curve
28. A consumer consumes only two goods. Explain the conditions of consumer’s equilibrium using marginal utility analysis.
OR
Explain the meaning of Diminishing Marginal Rate of Substitution with the help of a numerical example.
29. What is an inferior good? In what manner is the demand curve of such a goods affected when income of the consumer increases? Use diagram.
30. Distinguish between microeconomics and macroeconomics.
OR
Explain the problem of ‘how to produce’?
31. When price of a good rises from Rs 8 per unit to Rs 10 per unit, producer supplies 40 units more. Price Elasticity of Supply is 2. What is the quantity supplied before the price change? Calculate.
32. Using appropriate schedule, briefly describe the determination of market equilibrium.
33. Market for a good is in equilibrium. The supply of the good ‘Increases’. Explain the chain of effects of this change.
34. State whether the following statements are true or false. Give reasons for your answer.
(i) The difference between Average Total cost and Average Variable cost remains constant.
(ii) Average product falls only when marginal product is less than average product.
(iii) Marginal revenue can never be zero
OR
A person starts a goods transport business. He purchases a goods carrier using partly his own savings and partly borrows money. He drives the carrier himself. What are the explicit cost and implicit cost in it directly identifiable? Give reasons for your answer.