AHSEC| CLASS 12| ECONOMICS| SOLVED PAPER - 2020| H.S. 2ND YEAR
2020
ECONOMICS
Full Marks: 80
Pass Marks: 24
Time: Three hours
The figures in the margin indicate
full marks for the questions.
PART-A
1. (a) What does a Production Possibility Curve indicate? 1
Ans:- The
production possibilities curve (PPC) is a model used to show trade-offs
associated with the allocation of
resources
between the production of two goods.
(b) If an
increase in the price of good X increases the demand for good Y, then how the
two goods are related? 1
Ans:- Other
things being equal, if the price of good X increases and, as a result, the
demand for good Y increases, then good X and Y are complementary goods.
(c) Total
Variable Cost (TVC) will be zero when
total product is zero. (Fill in the blank) 1
(d) A firm
earns normal profit when - 1
(i) AR >
AC
(ii) AR = AC
(iii) AR <
AC
(iv)
MR=MC (Choose the correct answer)
(e) In a
centrally planned economy, which of the following takes all economic decisions?
1
(i) Central
Bank
(ii) Market
(iii)
Government
(iv) Both Government and Central Bank
(f) What are
the shapes of AR and MR curve for a firm under non- competitive market
structure? 1
Ans:- Both
AR and MR curves slope downwards from left to right but MR is twice as long as
AR because MR is limited to one unit and AR is obtained from all the units.
2. Mention two reasons that give rise to economic
problems. 2
Ans:- The main causes of economic problems are:
(i) Resources
like labour, land and capital are inadequate compared to demand.
(ii) The demands
and desires of man are unlimited and keep increasing. Therefore, due to limited
resources they are not able to be satisfied.
3. What is a budget line? Why does it slope downward?
1+1=2
Ans:- The budget line, also known as the budget
constraint, displays all combinations of two goods that a customer can purchase
at given market prices and within particular earning degrees.
Budget line is a
downward sloping line because given the prices of goods X and Y, and income of
the consumer, more of Good-X (on X-axis) can be purchased only when less of
Good-Y (on Y-axis) is purchased.
4. If a unit tax is imposed; how does it impact the
short-run supply curve of a firm? Show with the help of diagram. 2
Ans:-
5. What is 'break-even point' of a firm? At which point
of the AC curve, a firm under perfect competition breaks-even? 1+1=2
Ans:- The break-even point is the point at which
total costs and total revenues are equal, meaning there is no loss or profit
for your small business.
At the
break-even point, a firm earns normal profit. At this point, total revenue and
total cost are equal. Profit is said to be normal when TR=TC or AR=AC. Normal
profit is defined as the minimum return that the producer expects from his
capital invested in the business.
6. What does price elasticity of supply mean? Briefly
explain. 2
Ans:- Price elasticity of supply is a measure of the
degree of responsiveness of the quantity supplied of a good to changes in its
price. It is an important parameter in determining how the supply of a
particular product is affected by fluctuations in its market price.
7. What is a monopolistic competitive market? 2
Ans:- Monopolistic competition is a type of market
structure where multiple companies exist in an industry, and they produce similar
but differentiated products. No company has a monopoly and each company
operates independently without regard to the actions of other companies.
8. Discuss four features of indifference curve. 4
Ans:- There are four features of indifference curves:
(i) Indifference
curves can never intersect,
(ii) The farther
away the indifference curve is, the greater will be the utility,
(iii)
Indifference curves are always downward sloping, and
(iv)
Indifference curves are convex.
9. Define and draw average cost and average variable cost
curve. Why these two curves can't touch each other? 3+1=4
Ans:-
(coming soon)
***
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