ASHOK HALL GROUP OF SCHOOLS

TERM I EXAMINATION
SESSION- 2021-2022

ANSWER KEY
CLASS – X TOTAL MARKS – 50
SUBJECT – ECONOMIC APPLICATIONS DURATION- 1 HOUR
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Section-I
Question 1. [1]
When the demands for different complementary goods are created at a time, like demand for
guns and bullets, it is an example of
1. Cross demand
2. Joint demand
3. Derived demand
4. Direct demand

Question 2. [1]
In a typical demand schedule, quantity demanded:
1. Varies directly with price
2. Varies proportionately with price
3. Varies inversely with price
4. Is independent of price

Question 3. [1]
___________________ Product of capital is the additional output that can be produced by
employing one additional unit of capital.
1. Total
2. Average
3. Marginal
4. Residual
Question 4.
What is effective demand?
1. Willingness to buy
2. Required purchasing power
3. Both 1 &2
4. None of these

Question 5. [1]
A man buys a BMW car in order to be at par with his colleagues who all owns a BMW car is
a classic example of
1. Veblen effect
2. Snob effect
3. Bandwagon effect
4. Speculative effect/ activity

Question 6. [1]
Which of these is not a quality of an entrepreneur?
1. Risk aversion
2. Decision making
3. Innovative ability
4. Negotiating skill

Question 7. [1]
If a supply curve is perfectly inelastic, the linear supply curve is
1. Vertical
2. Horizontal
3. Upward sloping
4. Downward sloping

Question 8. [1]
Price of a good rises by 2%. As a result, its supply rises by 4%. Find out the price elasticity of
supply by the percentage method.
1. -2
2. -1
3. 2
4. 1
Question 9. [1]
Prevailing wage rate is considered as a price of
1. Labour
2. Capital
3. Land
4. Entrepreneurship

Question 10. [1]

Which of these statements best describes the context for entrepreneurship?
1. Entrepreneurship takes place in small business
2. Entrepreneurship takes place in large business
3. Entrepreneurship takes place in wide variety of contexts
4. Entrepreneurship takes place for firms that are already existing

Question 11. [1]

Which of the following is not a true characteristic of land?
1. Supply of land is fixed
2. Land is immobile
3. Land has alternative uses
4. Land is homogenous

Question 12. [1]

What will be the values of (i) and (ii) in the following table?
Production (in Quintals) Size of land (in hectares) Average Productivity (in
Quintals)
50 10 (i)
30 3 (ii)

1. 5 and 10 quintals
2. 5 and 3 quintals
3. 500 and 90 quintals
4. 500 and 10 quintals
Question 13. [1]
Construction of irrigation facilities is an example of
1. Investment on land
2. Security of tenancy
3. Both of the above
4. Neither of the above

Question 14. [1]

A price taking firm
1. Cannot influence the price of the product it sells.
2. Talks to rival firms to determine the best price for all of them to charge.
3. Sets the product’s price to whatever level the owner decides upon.
4. Asks the government to set the price of its product

Question 15. [1]

Which of the following is an example of an artificial ecosystem?
1. Desert ecosystem
2. Cropland ecosystem
3. Forest ecosystem
4. Aquatic ecosystem

Question 16. [1]

The physical effort of carrying the risk of business and coordinating the activities of all other
factors of production is called _____________________.
1. Entrepreneurship
2. Labour
3. Land
4. Capital

Question 17. [1]

Labour curve can be backward bending due to the negative correlation between wage rate and
labour supply
1. True
2. False
Question 18. [1]
Observe the relationship in the first case and complete the second one:
(i) Monopoly : One seller
(ii) Monopolistic Competition: __________________________________
1. Two sellers
2. Few sellers
3. Many sellers
4. None of the above.
Question 19. [1]
Which of the following is not true with regards to the division of labour?
1. It increases labour efficiency
2. Quality of production improves
3. All labourers are able to participate in all the processes of production
4. It increases national income

Question 20. [1]

Which of the following decreases the labour efficiency?
1. Eradication of illiteracy
2. Inadequate training facilities
3. Improved working conditions
4. Health insurance and social security

Question 21. [1]

An entrepreneur cannot be a salaried manager of the firm.
1. True
2. False

Question 22. [1]

The type of capital that do not get destroyed on being used once or twice and do not change
their form from period to period is called
1. Fixed capital
2. Sunk capital
3. Circulating capital
4. Money capital
Question 23. [1]
Which of the following is not an example of social capital?
1. Public parks
2. Highways
3. Bridges
4. Debentures

Question 24. [1]

Which of the following market types has all firms selling products so identical that buyers do
not care from which firm they buy?
1. Perfect Competition
2. Monopoly
3. Oligopoly
4. Monopolistic competition

Question 25. [1]

Capital is defined as _______________ means of production.
1. Active
2. Direct
3. Produced
4. Insignificant

Section - II
Question 26. [2]
Which of the following statements reflects an increase in quantity demanded?
1. Indigo Airlines reduces its average plane fare by 30% in order to attract more
passengers
2. People are buying more potatoes in the fear of probability of price rise of vegetables
in future
3. A Consumer purchasing more sweets because some guests have arrived at her home
4. A consumer purchasing more clothes after a rise in income

Question 27. [2]

If the suppliers feel that the price of a commodity will rise in near future, then at present they
may reduce the supply. This causes
1. No change in the supply curve
2. Leftward shift in the supply curve
3. Rightward shift in the supply curve
4. None of the above

Question 28. [2]

Observe the table below and answer the following question:
What is the elasticity of supply when prices change from Rs. 15 to Rs. 12? Use the
percentage method.

Price (in Rs.) Quantity supplied ( in units)

15 6
12 5

1. 0.77
2. 0.87
3. 0.83
4. 0.58

Question 29. [2]

Which of the following is not an example of capital?
1. Money kept in the form of bank deposits
2. A truck used for transporting goods for productive purposes
3. A pool car driver using his car to drop his wife to the market.
4. A garage given off as a lease to somebody else’s car to earn a rent

Question 30. [2]

When the price of a substitute Y for commodity X rises, the demand for X
1. Rises
2. Falls
3. Remains constant
4. None of the above

Question 31. [2]

Capital formation takes place when there is
a. Creation of savings
b. Mobilisation of savings
c. Investment of savings
Arrange the processes of a, b and c in correct order
1. First a, then c, then b
2. First b, then c, then a
3. First a, then b, then c
4. First c, then b, then a

Question 32. [2]

Consider the following markets: Which of these is monopolistically competitive?
a. Markets for eggs and bananas
b. Markets for Railways
c. Markets for soaps, shampoos
d. Markets for air conditioners
e. Markets for war ships and fighter jets
1. Only c and d
2. Only a
3. Only e
4. Only b and e

Question 33. [2]

Which of the following is not true with regards to the impact of urbanisation on ecosystem?
a. Reduction of the forest cover
b. Increase in municipal wastes
c. Reduction in the flow of the river downstream
d. Damage to surface and groundwater resources
Choose the correct option:
1. Only a and b
2. Only c and d
3. Only d
4. Only a

Question 34. [2]

When the process of production is divided in different parts such that all the processes can
run simultaneously, it is called
1. Simple division of labour
2. Incomplete division of labour
3. Vertical division of labour
4. Horizontal division of labour

Question 35. [2]

Firms use advertising to
a. Influence a consumer’s buying decision.
b. Convince customers that their product is worth its price.
c. Persuade buyers that their product is superior to others.
d. So that they can charge different prices at different markets
Which of the above is true?
1. Only a
2. Only d
3. Both a and c
4. First three options – a, b, c
Section III
Question 36. [5X1]
Read the passage below and answer the questions that follow:
Indian Railways (IR) is the state-owned railway company of India. Indian Railways had, until
very recently, a monopoly on the country’s rail transport. It is one of the largest and busiest
rail networks in the world, transporting just over six billion passengers and almost 750
million tonnes of freight annually. IR is the world’s largest commercial or utility employer,
with more than 1.6 million employees.
The railways traverse through the length and width of the country; the routes cover a total
length of 63,940 km (39,230 miles). As of 2005 IR owns a total of 216,717 wagons, 39,936
coaches and 7,339 locomotives and runs a total of 14,244 trains daily, including about 8,002
passenger trains.
Railways were first introduced to India in 1853. By 1947, the year of India’s independence,
there were forty-two rail systems. In 1951 the systems were nationalised as one unit,
becoming one of the largest networks in the world. Indian Railways operates both long
distance and suburban rail systems

I. Which of the following is a barrier to entry that typically results in a monopoly?

1. Homogenous Product
 2. Perfect knowledge of price
3. Selling costs
4. Ownership of strategic raw materials.

II. Which of the following is not true for a monopoly?

1. Demand curve is relatively elastic
2. Firm is price maker
3. Demand curve is relatively inelastic
4. Monopolist can charge different prices from different groups of people.

III. Pick the option that does not belong to the group
1. Electricity supply
2. Cars
3. Refrigerators
4. Mobile phones

IV. Which of the following market type has the fewest/lowest number of firms?
1. Perfect competition
2. Monopoly
3. Monopolistic Competition
4. Oligopoly

V. A monopolist is said to practise price discrimination when for the same product,
a) He charges different prices for different geographical regions within a country
b) He charges different prices for different income groups
c) He charges different prices for imports and exports./from different customers
Which of the following is true?
1. Only a is true; but not b and c
2. Only a and c is true; not b
3. Only c is true; not a and b
4. All three statements are true.

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