AHSEC| CLASS 12| ECONOMICS| SOLVED PAPER - 2015| H.S. 2ND YEAR
2015
ECONOMICS
Full Marks: 100
Pass Marks: 30
Time: Three hours
The figures in the margin indicate
full marks for the questions
PART – A
1. (a) Fill in the blank:
In economic,
it is generally assumed that the consumer is a rational
Individual. 1
(b) Define
substitute goods. 1
Ans:- A
substitute good is a product that can be used as a replacement for another
product because it serves the same purpose. If the price of a product
increases, people may choose to buy substitutes instead, which may lead to a
decrease in demand for the original product.
(c) Define
inferior goods. 1
Ans:- An
inferior good is an economic term that describes a good whose demand decreases
as people's income increases. As incomes rise, these goods fall out of choice
and the economy improves as consumers begin to buy more expensive alternatives
instead.
(d) In which
form of market, products are homogeneous? 1
Ans:- Perfectly competitive market.
(e) What is
the shape of supple curve in the market period? 1
Ans:- Perfectly inelastic, or a vertical straight line.
(f) What is
meant by equilibrium price? 1
Ans:- The
equilibrium price is the price at which the quantity demanded equals the
quantity supplied. The forces of demand and supply determine the equilibrium
price when they are equal and graphically the point at which demand and supply
intersect is the equilibrium point and price is determined.
2. Give the concept of centrally planned economy. 2
Ans:- Centrally planned economies are also known as
command economies, where prices are controlled by a centrally managed
bureaucracy. The theory behind a centrally planned economy is that the
government will control the means of production and run the economy with fair
distribution to all.
3. Distinguish between positive economics and normative
economics. 2
Ans:- The difference between positive economics and
normative economics is given below:
Positive
Economics:
(i) Positive
economics is a part of economics based on information and certainty.
(ii) clearly
articulates economic concerns and issues
Normative
economics:
(i) Normative
economics is a part of economics based on values, attitudes and reason.
(ii) Provides
solution to economic concerns on the basis of value.
4. Draw a vertical demand curve and state the nature of
price elasticity on it. 2
Ans:-
5. State any two assumptions of the law of demand. 2
Ans:- Assumptions of Law of Demand:
(i) The price of
the related goods remains constant.
(ii) The income
of the consumer remains constant.
6. What is shut down point of a firm? 2
Ans:- The shut-down point occurs when a firm is able
to cover its variable costs, which means TR = TVC in the short run. The loss
incurred by the firm in this case is the total fixed cost that it will have to
bear even if it decides to stop operations in the short run. Thus, a firm is
expected to operate in the short run until it is able to cover its variable
costs, although it may also decide to suspend production of the commodity for
some time. Is. Is.
The company will
exit the industry when it is not able to cover all its costs, i.e. when
TR<TC or AR<AC in the long run.
7. Total fixed cost of a firm is Rs. 100 when it produces
15 units of output. If the level of output increases to 30 units, what will be
the fixed cost in the short-run? Give reason for your answer. 2
Ans:- This is because in the short run, only one
factor of production is variable while all others are fixed. Therefore, in the
short run, fixed costs remain constant, irrespective of the level of output,
fixed costs remain constant and are paid by the businessmen.
The total
fixed cost of a firm is Rs. 100 when it produces 15 units of output.
15 units =
Rs.100.
If the level
of production is increased to 30 units, the cost will be:-
30 units = 100
× 2
=> 200 Rs.
8. Distinguish between change in quantity supplied and
change in supply. 4
Ans:- Supply refers to how much the market can supply
at various prices. In contrast, quantity supplied shows how much of a commodity
the producers will supply at a particular price. The supply schedule or supply
curve indicates the supply of the commodity.
(i) Movement
along the supply curve or change in quantity supplied: When the quantity
supplied of a commodity increases only due to increase in its price, it is
called expansion of supply. When the supply of a commodity decreases due to
fall in its price, it is called contraction of supply.
(ii) Shift in
supply curve or change in supply. When the supply of a commodity increases
at a given price, it is called an increase in supply. When the supply decreases
at a given price, it is called a decrease in supply. Graphically, this means a
shift in the supply curve. In the figure, at price OP, the supply is OQ. When
there is an increase in supply at a given price, the supply curve shifts to the
right; If there is a decrease in supply at a given price, the supply curve
shifts to the left.
Thus, movement
along the supply curve means expansion and contraction of supply while a shift
in the supply curve means increase and decrease in supply.
9. Write down four characteristics of perfectly
competitive market. 4
Ans:- This type of market structure refers to a
market in which there are a large number of buyers and also a large number of
sellers. No individual seller is able to influence the price of the existing
product in the market. In a perfect competition, all the sellers produce the
same output, i.e., the outputs of all the sellers are equal to each other and
the prices of the products are the same.
Features of
Perfectly Competitive Market:-
(i) Large
number of buyers and sellers: A large number of buyers and sellers exist in
a perfectly competitive market. The number of sellers is so large that no
individual firm has control over the market price of a commodity.
Due to the large
number of sellers in the market, there exists a perfect and free competition. A
firm acts as a price taker, while the price is determined by the 'invisible
hands of the market' i.e. 'demand' and 'supply' of the goods. Thus, we can
conclude that under perfectly competitive market, an individual firm is a price
taker and not a price maker.
(ii)
Homogeneous Products: In a perfectly competitive market all firms produce
homogeneous products. It implies that the output of each firm is an ideal
substitute for the output of the others in terms of quantity, quality, colour,
shape, characteristics, etc. This indicates that buyers are indifferent to the
outputs of different firms. Due to the similar nature of the products, the
existence of uniform price is guaranteed.
(iii) Free
exit and entry of firms: In the long run there is free entry and exit of
firms. However, in the short run certain factors hinder the free entry and exit
of firms. This ensures that in the long run all firms earn normal profit or
zero economic profit which measures the opportunity cost of firms continuing or
discontinuing production. If there is an abnormal profit, new firms will enter
the market and if there is an abnormal loss, some of the existing firms will
leave the market.
(iv)
Perfect knowledge between buyers and sellers: Both buyers and sellers have
perfect knowledge about market conditions, such as the price of a product at
different places. Sellers also know about the prices at which buyers are
willing to buy the product. The implication of this feature is that if an
individual firm is charging a higher (or lower) price for a homogeneous
product, buyers will shift their purchases to other firms (or transfer their
purchases from the firm to other firms selling at a lower price). To). firms
will be transferred).
(coming soon)
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