CBSE practice Questions

CBSE Class 12 Economics Question Paper for Practice

class 12 economics Questions

Economics Sample Paper class 12

1 mark questions

Question: What does the slope of PPC show?

Question: Give the meaning of involuntary unemployment.

Question: What is meant by balance of trade?

Question: When is the demand for a commodity said to be inelastic? When is the demand for a commodity said to be inelastic?

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Question: What do you mean by Monotonic Preferences?

Question: The cost of zero level of output is equal to which cost.

Question: When is the supply of a commodity called elastic?

Question: What are cartels? Give one example.

Question: What determines the level of household consumption expenditure in an economy?

Question: Define a commercial bank.

Question: What is monetary policy?

Question: Give one reason for a rightward shift in supply curve.

Question: What is meant by opportunity cost?

Question: Why are subsidies treated as revenue expenditure?

Question: How bank rate should be changed to check inflation.

Question: Define marginal revenue.

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Question: What can be the minimum value of investment multiplier?

Question: The value of multiplier is 4. What will be the effect on the income of an economy if investment increases by Rs. 100 Cr.

Question: What change will take place in marginal product when total product increases at a diminishing rate ?

Question: Why is repayment of a loan a capital expenditure?

3 marks questions

Question: State the components of the current account & capital account of balance of payment (BOP).

Question: Explain the effect of depreciation of domestic currency on exports.

Question: How is foreign rate of exchange determined? Explain

Question: How can a government budget help in reducing inequalities of income? Explain.

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Question: Explain consumer’s equilibrium in case of a single commodity through the marginal utility approach.

Question: How is balance of trade (BOT) different from balance of payment (BOP).

Question: Explain the central problem of ‘choice of technique’.

Question: Explain the meaning and implications of fiscal deficit.

Question: What is meant by production possibility curve? Illustrate with the help of a schedule.

Question: Distinguish between current account and capital account of balance of  payments account.

Question: List three sources each of demand for & supply of foreign exchange in a country.

Question: How is the price elasticity of demand for a commodity affected by nature of the good and number of its substitutes? Explain.

Question: Explain the following function of the central bank
(i) Banker to the Govt.
(ii) Currency authority

Question: Briefly explain any two functions of money?

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Question: Explain the function of a Central Bank as a banker to the government.

Question: Explain the open market operations method of credit control used by a  central bank.

Question: The ratio of elasticity of supply of commodities A and B is 1:1.5, 20 percent fall in price of A results in a 40 percent fall in its supply. Calculate percentage  increase in supply of  B if its price rises from Rs. 10 to Rs. 11 per unit.

Question: Explain the concept of “Interdependence” in the context of Oligopoly.

Question: Explain the conditions leading to maximisation of profits by a producer. Use MC & MR approach.

Question: Explain the relation of TP with MP in different stages of the operation of law of variable proportion .

Question: Show diagrammatically consumer’s equilibrium using IC analysis.

Question: Explain the relationship between TU & MU with diagram.

Question: Explain the central problem of “choice of technique”.

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Question: Explain the changes that will take place in the market for a commodity if the prevailing market price is less than the equilibrium price.

4 marks questions

Question: Explain the relationship between APC and APS. Can the value of APC be greater  [than one? Give reasons for your answer.

Question: Prices of essential commodities are rising in India. It has become difficult for the common mass to fulfill their basic requirements. No. of people falling under  poverty line is increasing..

Question: Suggest any two fiscal measures to control rising prices. Also suggest any two values which people must possess to remove poverty.

Question: Explain the implications of the following features of  market:
(a) Product differentiation under  monopolistic competition
(b) Large number of buyers and sellers, feature of perfect competition

Question: Define sources of monopoly power. Has a monopolist complete control over the price that  he charges. Explain

Question: What is fiscal deficit . Explain two implications of fiscal deficit. How can it be met?

Question: Giving reasons, categorize the following into revenue expenditure and capital expenditure
(i) Interest payment
(ii) repayment of loans
(iii) construction of school building
(iv) expenditure of defence

Question: The welfare of the people  depends upon its GDP. GDP increases with increase in production.

Question: Do you agree that GDP is the only indicator of economic welfare. Give any three reasons in favour of your answer. Also state any two values which can help in increasing welfare.

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Question: (a) How does time horizon affect elasticity for a product?
(b) The market demand for a good at Rs. 4/- is 100 units. The price rises & as a    result its market demand falls to 75 units. Find out the new price if the Price elasticity of demand for that good is (-) 1.

Question: How will you treat the following while estimating domestic factor income of India? Give reasons for your answer.
(a) Profits earned by branches of a foreign bank in India
(b) Rent paid by the embassy of Japan in India to a resident Indian
(c) Unemployment allowances paid by the govt.
(d) Salaries received by Indians working in branches of foreign banks in India.

Question: Explain the relationship between income of a consumer and quantity demanded.(use diagram)

Question: Explain the impact of consumer’s taste & preference on the demand curve for a commodity (use diagram)

Question: Explain the process of money creation by commercial banks using a numerical example.

Question: Briefly explain the two methods of measuring price elasticity of supply.

6 marks questions

Question: Explain the following:
(a) What is a budget line? What does the point on it indicate in terms of prices?
(b) Why is an indifference curve convex to the origin?
(c) Why does a higher indifference represent a higher level of satisfaction?

Question: Explain the following
(i) TR increases at a decreasing rate
(ii) TR increases at a constant rate.
(iii) Shape of AFC
(iv) Impact of the imposition of a unit tax on the supply curve of the firm

Question: Giving reasons state whether the following statements are true or false:
(a) Shape of TC is inverse S shaped.
(b) The difference between Average total cost and Average variable cost  increases with increase in the level of output.
(c) When MR is zero, AR will be constant
(d) When MC rises, AC will also rise.

Question: Draw one diagram showing AC, AVC & MC & explain the relationship among them.

Question: Distinguish between :
(a) Normal good and inferior good
(b) Individual demand schedule and market demand schedule

Question: Market price for a good is in equilibrium. What is the effect on equilibrium  price & quantity if both demand and supply of the good increases. (use diagrams.)

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Question: In an economy Aggregate Demand is less than Aggregate Supply. Is the economy in equilibrium? If not, explain the changes that will bring the economy in equilibrium. Use a schedule to explain it.

Question: (i) What would be the shape of the demand curve of commodity when its price elasticity of demand is (a) zero (b) inelastic. Explain with the help of diagrams.
(ii) How do the following determine price elasticity of demand :
(a) Nature of good
(b) Availability of substitute

Question: Explain the likely behaviour of total product and marginal product when for increasing production only one input is increased while all other inputs  are kept constant.

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Vishal Arora

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