CBSE SAMPLE PAPER-01 (solved)

ECONOMICS
Class – XII
Time allowed: 3 hours Maximum Marks: 100

General Instructions:

a) All questions are compulsory.

b) The question paper comprises of two sections, A and B. You are to attempt both the sections.
c) Questions 1 to 5 in section A and 16 to 18 in section B are MCQ’s of one mark each. Choose
the correct option.
d) Questions 6 to 8 in section A and 19 to 23 in section B are three marks questions. These are
to be answered in about 30 words each.
e) Questions 9 to 11 in section A and 24 to 25 in section B are four marks questions. These are
to be answered in about 50 words each.
f) Questions 12 to 15 in section A and 26 to 29 in section B are six marks questions. These are
to be answered in about 70 words each.

Section A
1. The central problem of economics of choosing the technique of production is the problem of:
a) What to produce b) How to produce
c) For whom to produce d) None of the above
2. Which of the following would be substitutes?
a) Bread and butter b) Car and petrol
c) Tea and coffee d) All of the above
3. When demand for a good falls due to rise in its own price, what is the change in demand
called?
a) Expansion of demand b) Contraction of demand
c) Increase in demand d) Decrease in demand
4. PPC can be a straight line when:
a) MRT is diminishing b) Constant MRT
c) Increasing MRT d) All of the above
5. Budget line is:
a) Parallel to X – axis b) Parallel to Y-axis
c) Downward sloping line d) None of the above.
6. Explain the problem of “what to produce” with the help of PPC.

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7. Complete the following table:
Output (units) 1 2 3 4
TR (Rs.) 4 6 6 4
MR (Rs.)
AR (Rs. )

8. Explain three causes of the rightward shift of the supply curve.

9. Explain the causes behind the law of demand.
10. Distinguish between AFC and AVC. How are these calculated?
11. Suppose that the demand curve for XYZ Co. slopes downwards to the right. Would you
conclude that the firm is a price maker or a price taker? Give reason.
12. Explain briefly the features of perfect competition.
13. Market for a good is in equilibrium. What is the effect on equilibrium price and quantity if
increase in market demand is less than the increase in market supply? Use diagram.
14. Explain the law of supply. Use diagram.
15. Explain the effect of following changes on the demand for the commodity with the help of
diagram:
a) a fall in price of substitute goods
b) a favourable change in the taste of buyer.

SECTION B
16. Which of the following is a micro-economic study?
a) Level of employment b) Aggregate demand
c) Study of a cotton textile industry d) All of the above.
17. Which of the following is equal to National Income?
a) GDPFC b) NNPFC
c) NNPMP d) GNP
18. If inflation is higher in country A than in country B and the exchange rate between the
two countries is fixed, what is likely to happen to trade balance of Country A?
a) Trade balance of country A will be favourable
b) trade balance of country A will be Unfavourable
c) Trade balance of country A will be unaffected

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 d) None of the above.
19. Explain Paradox of thrift.
20. Distinguish between national income at current price and at constant price.
21. When will there be a situation of deficit demand in an economy? State two measures to
correct it.
22. Explain why Public goods must be provided by the government?
23. From the following data about firm X, calculate gross value added at factor cost by it:
(Rs. in thousands)
Sales 500
Opening stock 30
Closing stock 20
Purchase of intermediate products 300
Purchase of machinery 150
Subsidy 40

24. What is meant by open market operations? Briefly describe their effects on credit creation by
commercial banks.
25. Distinguish between Revenue receipts and capital receipts in a government budget. Give two
examples of each.
26. Explain main functions of the commercial bank.
27. How are following treated in the estimation of national income?
a) Transfer payments
b) Services of owner occupied houses.
c) Commission received from sale of second hand goods.
d) Non –marketable goods.
28. Explain the three categories in which BOP transactions are classified.
29. From the table given below:
Income Consumption Savings Investment AD= C+ I AS= Y
100 120 -20 40 160 100
200 200 0 40 240 200
300 280 20 40 320 300

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 400 360 40 40 400 400
500 440 60 40 480 500
600 520 80 40 560 600
Answer the following questions:
a) Identify the break-even point
b) Locate the equilibrium level of income.
c) Calculate MPS when income changes from Rs. 400 to Rs. 500.
d) Calculate APC at income level of Rs. 100 crores.
e) Calculate APS at income level of Rs. 500 crores.

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