This document contains 50 questions related to the subject of economics for class 12. The questions cover a wide range of topics including macroeconomics, indifference curves, costs, revenues, market structures, national income, banking, fiscal policy, monetary policy, consumption, production, equilibrium and elasticities.

1. Class – XII: Subject – Economics
1. Define macro economics.
2. What does an indifference curve show?
3. Define marginal cost.
4. What is the behavior of average revenue in a market in which a firm can sell anyquantity of a
good at a given price?
5. Define oligopoly.
6. Draw supply curves showing price elasticity of supply equal to
(i) zero,
(ii) one, and
(iii) infinity throughout.
7. Explain the implications of 'differentiated products' in monopolistic competition
8. How does the change in tax on a product influence the supply of that product ? Explain.
9. What is revenue? Explain the relation between marginal revenue and average revenue.
10. Define aggregate supply?
11. What is commercial bank?
12. Define government budget?
13. Calculate Net Value Added at factor cost from the following data
i. Depreciation
(Rs. Lakhs)
20
ii. Intermediate cost
90
iii. Subsidy
5
iv. Sales
140
v. Exports
7
vi. Change in stock
10
vii. Imports of raw materials
3

2. 14.What is revenue deficit? What are its implications? Giving reasons, explain how thefollowing
are treated in estimating national income:
(i) wheat grown by a farmer but used entirely for family's consumption.
(i) Earning of the shareholders from the sale of shares.
(iii )Expenditure by government on providing free education.
15. Give meaning of an Economy.
16. What is Market Demand?
17.Explain any two main features of monopolistic competition.
18.What is the behavior of average revenue in a market in which a firm can sell more onlyby
lowering the price?
19. What is a price taker firm?
20. Given price of a good, how does a consumer decide as to how much of that good to buy?
21.Explain why firms are mutually interdependent in an oligopoly market.
22.When price of a good is Rs.7 per unit a consumer buys 12 units. When price falls to Rs.6per
unit he spends Rs.72 on the good. Calculate price elasticity of demand by using thepercentage
method. Comment on the likely shape of demand curve based on this measureof elasticity.
23. Explain the conditions or producer’s equilibrium in terms or marginal cost and
marginalrevenue. Use a schedule.
24.What is the behavior of Marginal Revenue in a market in which a firm can sell anyquantity of
the output it produces at a given price?
25. A producer starts a business by investing his own savings and hiring the labour.
Identifyimplicit and explicit costs from this information. Explain.
26.Define an indifference map. Why does indifference curve to the right show more
utility?Explain.
27.What does the Law of Variable Proportions show? State the behavior of marginal
productaccording to this law.
28.Market for a good is in equilibrium. Explain the chain of reactions in the market if theprice is
(i) higher than equilibrium price and (ii) lower than equilibrium price.
29.Explain the components of Legal Reserve Ratio.

3. 30.Explain ‘bankers' bank, function of Central bank.
31.Explain the distinction between autonomous and accommodating transactions in balanceof
payments. Also explain the concept of balance of payments 'deficit' in this context.
32.Outline the steps taken in deriving saving curve from the consumption curve. Usediagram.
33.How does the nature of a commodity influence its price elasticity of demand? Explain.
34.Calculate the price elasticity of demand for a commodity when us price increases by 25%and
quantity demanded falls from 150 units to 120 units.
35.Demand for electricity has “increased". However supply cannot be increased due to lackof
resources. Explain how, in any two ways, demand for electricity can be decreased’.
36.Explain the relation between marginal revenue and average revenue when a firm is ableto sell
more quantity of output:
(i) at the same price.
(ii) only by lowering the price.
37.On the basis of the information given below, determine the level of output at which
theproducer will be in equilibrium. Use the marginal cost — marginal revenue approach.Give
reasons for your answer.
Output (Units)
Average Revenue (Rs)
Total Cost (Rs)
1
7
8
2
7
15
3
7
21
4
7
26
5
7
33
6
7
41
38.A consumer consumes only two goods. Why is the consumer in equilibrium when hebuys
only that combination of the two goods that is shown at the point of tangency of thebudget line
with an indifference curve? Explain.
39.Give the meaning of Nominal GDP and Real GDP. Which of these is the indicator
ofeconomic welfare and why?

4. 40. Complete the following table:
Income
Saving
Marginal Propensity
Average Propensity
to Consume
to Consume
0
-20
-
-
50
-10
-
-
100
0
-
-
150
30
-
-
200
60
-
-
41.When the quantity of only one factor of production is increased to increased output,
theproportion in which the factors of production arc used varies. The total physical
productchanges in the following manner:
i. It first increases at an increasing rate
ii. After some point it increases at a decreasing rate
iii. Ultimately it starts falling
42. The equilibrium price is the price at which quantity demanded and quantity supplied of
acommodity is equal. When the demand of a commodity increases it results in a rightwardshift of
the demand curve as shown in the diagram.
43.What is deflation gap? Show it on a diagram. Give any two effects of it onthe economy and
suggest any two fiscal and monetary measures to correctthe problem.
44. In two sectors economy, the saving and investment function are
S = -10 + 0.2Y
I = 3 + 0.1Y
a. What will be the equilibrium level of income and
b. The value of multiplier and MPC
45. Is monopoly firm a price maker? How?
46.BOT shows a deficit of Rs. 5000 corers and value of imports are Rs. 9000corers. What is the
value of exports?

5. 47. What is underemployment equilibrium?
48.How is price elasticity of supply derived?
49. Mention three limitation of GDP as an index of welfare of a country
50.What is the effect of demand shift on equilibrium price and quantity?