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Class 11 - Economics
Sample Paper - 04 (2023-24)

Maximum Marks: 80
Time Allowed: : 3 hours

General Instructions:

1. This question paper contains two sections:

Section A – Micro Economics
Section B – Statistics
2. This paper contains 20 Multiple Choice Questions type questions of 1 mark each.
3. This paper contains 4 Short Answer Questions type questions of 3 marks each to be answered in 60 to 80 words.
4. This paper contains 6 Short Answer Questions type questions of 4 marks each to be answered in 80 to 100 words.
5. This paper contains 4 Long Answer Questions type questions of 6 marks each to be answered in 100 to 150 words.

Section A
1. Assertion (A): Statistics are only an end and not the means.
Reason (R): Statistical calculations are simple expressions that should be supplemented by other methods for a complete
comprehension of the results.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
2. A composite price index based on the prices of a group of items is known as the
a) Laspeyres Index
b) CPI
c) Paasche Index
d) Aggregate price index
3. Karl Pearson's coefficient is defined from:
a) Both (Ungrouped data) and (Grouped data)
b) Ungrouped data
c) Grouped data
d) None of these
4. Construct price index number from the following data by applying(Paasche’ s Method)
Price Quantity Price Quantity
Commodity
(2000) (2000) (2001) (2001)

A 2 8 4 5

B 5 12 6 10
C 4 15 5 12

D 2 18 4 20
a) 148.7 b) 148.5
c) 144.7 d) 145.5

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5. In most of the weighted index numbers, the weight pertains to:
a) Both base and current year
b) base year or current year.
c) Base year
d) current year
6. Which of the following measures changes in retail price of the commodities?
a) None of these
b) Wholesale Price Index
c) Consumer Price Index
d) Weighted Index
7. Dispersion in statistics means:
a) Lack of correlation.
b) Lack of variability
c) Degree of scatteredness from a central value of a variable.
d) None of these
8. For tabulation, 'caption' is:
a) The lower part of the table.
b) The main part of the table
c) The upper part of the table
d) The upper part of a table that describes the column and sub-column
9. Which of the following plays an important role in the construction of index numbers?
a) Current year price
b) All of these
c) Base year price
d) Weights
In an evaluation of answer script the following marks are awarded by the examiners. Can you find any correlation
between the two?
1st 88 95 70 96 50 80 75 85
10.
2nd 84 90 88 55 48 85 82 72
a) 0.578
b) 0.365
c) 0.363
d) 0.543
11. Name and briefly explain two systems of weighting for construction of weighted index number.
12. If mean of a distribution is Rs.700 and sum of all the observations is Rs.6300, then find the number of observations.

OR

The annual salaries of four men were Rs.5000, Rs.6000, Rs.6500 and Rs.30,000.
i. Find the arithmetic mean of their salaries.
ii. Does this average represent their salaries? Which property of arithmetic mean is reflected here?
13. From the following frequency distribution, prepare ‘less than’ and ‘more than’ cumulative frequency distribution.
Wages (in Rs.) 100-110 110-120 120-130 130-140 140-150
Number of Workers 4 12 20 7 5

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14. The following data shows the number of cars manufactured by Maruti Ltd, Tata Motors and Hyundai in the year 2015-
16. Represent it with the help of a pie-diagram.

Production of Cars (in Rs.)

Maruti Limited 15,75,000

Tata Motors 7,25,000

Hyundai 5,50,000

OR

Direction of export is shown in the following table. Prepare a pie diagram to show the percentage distribution of export.
Country Export (in %)
USA 25
Japan 15

UK 30
China 20
Others 10
15. What do you understand by non-sampling errors? Explain briefly the types of non-sampling errors.
16. What are the merits and limitations of Spearman's rank correlation?
17. Calculate Q1 and Q3 from the following table.

Wages (in Rs.) Number of Workers

0-5 4
5-10 6

10-15 3
15-20 8
20-25 12

25-30 7

OR

Find out the missing value of the variate for the following distribution whose mean is 31.87.
Value (X) 12 20 27 33 ? 54
Frequency (f) 8 16 48 90 30 8
Section B
18. If the price of the commodity rises by 10 % and consequently the quantity supplied rises by 20 %, then the elasticity of
supply will be
a) 2.0
b) -2
c) 1
d) Cannot be calculated
19. A PPC can shift its position if and only if

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a) None of these
b) If technology remains constant
c) If resources remain constant
d) If technology improves
20. The steeper is the negatively sloped demand curve, the further below is the marginal revenue curve.
a) True
b) None of these
c) Can’t say
d) False
21. Marginal Revenue is
a) Additional cost involved in production
b) Same as total revenue
c) Addition to the total revenue on the production of an additional unit of Output
d) Addition to the total revenue on the sale of an additional unit of Output
22. When production is zero, the total cost will be:
a) zero
b) equal to marginal cost
c) equal to variable cost
d) equal to fixed cost
23. Assertion (A): If due to fall in the price of goods X, demand for goods Y rises, the two goods are complementary)
Reason (R): There is an inverse relationship between the demand for the good and the price of its complements.
a) Both A and R are true and R is the correct explanation of A.
b) Both A and R are true but R is not the correct explanation of A.
c) A is true but R is false.
d) A is false but R is true.
24. Which of the following type of competition is just a theoretical economic concept, not a realistic case where actual
competition and trade take place?
a) Perfect competition
b) Monopolistic competition
c) Oligopoly
d) Monopoly
25. The product of AR and price at every unit sold is the firm’s
a) TVC
b) AR
c) TR
d) MR
26. When average cost (AC) is falling:
a) none of these
b) MC > AC
c) MC < AC
d) MC = AC
27. Perfectly competitive firm faces?
a) Negative
b) Zero
c) Perfectly inelastic demand curve

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d) Perfectly elastic demand curve
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28. If more & more resources are constantly explored and new techniques of production are constantly discovered, don't you
think a day will come when our central problems will be solved once for all?

OR

Define opportunity cost with the help of an example, how does it differ from marginal opportunity cost?
29. Explain the implication of 'perfect knowledge about market' under perfect competition.
30. State the causes each for a rightward shift and leftward shift of demand curve.
31. Give the meaning of producer’s equilibrium. A producer produces that quantity of his product at which Marginal Cost
and Marginal Revenue are equal. Is he earning maximum profits? Give reasons for your answer.

OR

From the following Total Cost and Total Revenue schedule of a firm, find out the level of output, using Marginal Cost
and Marginal Revenue approach, at which the firm would be in equilibrium. Give reasons for your answer.
Output (units) Total Revenue (Rs) Total Cost (Rs)

1 10 9

2 18 15
3 24 21

4 28 25

5 30 33
32. The price of coffee rises, while the price of tea remains constant. How would the consumer react to this situation to
restore his equilibrium? Use the law of equi-marginal utility.
33. State giving reasons whether the following statements are true or false.
i. Increase in Total Product always indicates that there are increasing returns to a factor.
ii. When there are diminishing returns to a factor, Marginal Product and Total Product both fall.
iii. Average Product falls only when Marginal Product is less than Average Product.
.
34. Answer the following questions
1. Price of a good rises from Rs 7 per unit to Rs 9 per unit but its demand remains unchanged. Calculate price elasticity
of demand of good.
2. Price elasticity of demand of a good is (-)2. 40 units of this good are bought of a price of Rs. 10 per unit. How many
units will be bought at a price of Rs. 11 per unit. Calculate.

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Class 11 - Economics
Sample Paper - 04 (2023-24)

Solution

Section A
1. (d) A is false but R is true.
Explanation: Statistics are only a means and not the end because statistical calculations are simple expressions that
should be supplemented by other methods for a complete comprehension of the results.
2. (d) Aggregate price index
Explanation: A composite index number is a number that measures an average relative changes in a group of relative
variables with respect to base whereas a simple index number is a number that measures a realive change in a single
variable with respect to base.So, composite index number is based on an aggregate of items.
3. (b) Ungrouped data
Explanation: Karl Pearsons's coefficient of correlation is based on ungrouped data. It is calculated as
Sum of products of deviations from their respective means
r= Number of pairs ×Standard devuatuibs of both series

4. (a) 148.7
Explanation:
Commodity Price (P0) Quantity (q0) Price (P1) Quantity (q1) P0q1 P1q1

A 2 8 4 5 10 20

B 5 12 6 10 50 60
C 4 15 5 12 48 60

D 2 18 4 20 40 80

TOTAL 148 220

sum of p1 q1
Paasche’ s Index No. =
220
× 100 = × 100 = 148.6486 = 148.7
sum of p0 q1 148

5. (b) base year or current year .

Explanation: In a weighted price relative index weights may be determined by the proportion or percentage of
expenditure on them in total expenditure during the base period. It can also refer to the current period depending on the
formula used.
6. (c) Consumer Price Index
Explanation: Consumer price index (CPI), also known as the cost of living index,measures the average change in retail
prices.
7. (c) Degree of scatteredness from a central value of a variable.
Explanation: As per definition
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8. (d) The upper part of a table that describes the column and sub-column
Explanation: The upper column heading and sub column headings is collectively called 'caption'.
9. (b) All of these
Explanation: Base year price, current year price and weights play important role in the construction of index number.
10. (c) 0.363
Explanation:

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X (1st) Y (2nd) dX dY dX
2
dY
2
dXdY

88 84 18 -4 324 16 -72
95 90 25 2 625 4 50

70 (A) 88 (A) 0 0 0 0 0
96 55 26 -33 676 1089 -858
50 48 -20 -40 400 1600 800

80 85 10 -3 100 9 -30
75 82 5 -6 25 36 -30
85 72 15 -16 225 256 -240

79 -100 2375 3010 -380

N ∑ XY −∑ X ∑ Y
r=
2 2 2 2
√N ∑ X −(∑ X ) √N ∑ Y −(∑ Y )

8(−380)−(79)(−100)
= = 0.363
2 2
√8(2375)−(79) √8(3010)−(−100)

11. There are two methods of assigning weights.

(i) Implicit weighting
(ii) Explicit weighting
In implicit weighting, a commodity or its variety is included in the index a number of times. For example if wheat is to
be given in an index twice as much times as rice then the weight of wheat is two whereas in explicit weighting two types
of weights can be assigned. i.e. quantity weights or value weights.
A quantity weight symbolized by q means the amount of commodity produced, distributed or consumed in some time
period. A value weight in the other hand combines price with quantity produced, distributed or consumed and is denoted
by v = pq. For example quantity weights are used in the method of weighted aggregative like Lasperey's, Paasche's index
numbers and value weights are used in the method of weighted average of price relatives.
12. It is given that mean= 700
and the sum of all observations = 6300
Substituting these values in the formula for mean, we have
Sum of all the Observations
M ean =
Number of Observations

6300 6300
⇒ 700 = ⇒ n = = 9
n 700

So, the number of observations is 9.

OR
5000+6000+6500+30,000
i. Arithmetic M ean = 4
¯¯¯¯ ΣX 47,500
∴ X = = = Rs. 11, 875
n 4

ii. This mean does not represent the series because it is much higher than the actual salary of three persons, i.e. it is
much higher than 5000, 6000 or 6500 and substantially less than the salary of the fourth person which is 30,000.
The property of arithmetic mean that is reflected here is that arithmetic mean is affected by extreme values.
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13. 'Less Than' Cumulative Frequency Distribution.
It is obtained by adding successively the frequencies of all the previous classes including the class against which it is
written. The cumulate is started from the lowest to the highest size.
Wages (in Rs.) Cumulative Frequency (cf)

Less than 110 4

Less than 120 16
Less than 130 36

Less than 140 43

Less than 150 48

‘More Than’ Cumulative Frequency Distribution.

It is obtained by finding the cumulate total of frequencies starting from the highest to the lowest class.
Wages (in Rs.) Cumulative Frequency (cf)
More than 100 48

More than 110 44

More than 120 32
More than 130 12

More than 140 5

14. Name of the Company Production percentage values Angle (in degree)
15,75,000
Maruti Limited 15,75,000 = 199
55.26×360 ∘
× 100 = 55.26
28,50,000 100

7,25,000
Tata Motors 7,25,000 =
25.43×360 ∘
× 100 = 25.43 92
28,50,000 100

5,50,000
Hyundai 5,50,000 28,50,000
× 100 = 19.3
19.3×360

100
=~ 69 ∘

Total 28,50,000 360

∘

In the above table, we have calculated the percentage values of the production figures first and then we have computed
the angle in degrees for each value. The pie diagram for the above data is given below:

OR

For constructing a pie diagram, it is necessary to convert the percentage into corresponding degrees in the circle. Since
one circle contains 360 degrees, therefore we calculate the degree of angles by multiplying the percentage value by 3.6
i.e. which is equal to 3.6. The conversion to degree of angles is shown in the following table.
360

100

Country Percentage of Export Degree of Angles

USA 25 25

100
× 360
∘
= 90
∘

Japan 15 15

100
× 360
∘
= 54
∘

UK 30 30

100
× 360
∘
= 108
∘

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China 20
20 ∘ ∘
× 360 = 72
100

Others 10 10

100
× 360
∘
= 36
∘

100 360
∘

A pie diagram to show percentage distribution export is given below :

15. These errors are a consequence which can be traced and may arise at any stage of inquiry, viz planning and execution of
the survey and collection, processing and analysis of data.
some of the non-sampling errors are:
i. Errors in Data Acquisition It arises from the recording of incorrect responses.
ii. Non-response Errors It occurs, if an interviewer is unable to contact a person listed .
iii. Sampling Bias It occurs when the sampling plan is such that some members of the target population could not
possibly be included.
16. Merits of Rank Correlation
(1) Since in this method Σ d or the sum of the differences between Rl, and R2 is always equal to zero, it provides a check
on the calculation.
(2) Since Spearman's Rank Correlation is the same thing as Karl Pearson's Coefficient of Correlation between ranks, it
can be interpreted in the same way as Karl Pearson's Coefficient of correlation.
(3) Rank correlation unlike Karl Pearson's Coefficient of Correlation does not assume normality in the universe from
which the sample has been taken.
(4) Rank Correlation is very easy to understand and apply.' However Pearson's Coefficient is based on a set of full
information while Spearman's Coefficient is based only on the ranks. The values of obtained by these two methods
would generally differ.
(5) Spearman's Rank method is the only way of studying correlation between qualitative data which cannot be measured
in figures but can be arranged in serial order.
Demerits of Rank Correlation
(1) The method cannot be used in two-way frequency tables or bi-variate frequency distribution.
(2) It can be conveniently used only when n is small say 30, otherwise calculation become tedious.

17. Wages Number of Workers Cumulative Frequency (cf)

0-5 4 4
5-10 6 10

10-15 3 13
15-20 8 21
20-25 12 33

25-30 7 40
n = Σf = 40

Calculation of Q1 and Q3
Q1 Q3

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First Quartile number (q1)= Size of ( th Third Quartile number (q3)= Size of
n
)
4

item (
3n
) th item
4

= (
40

4
) th item=10th item = (
3×40

4
) th item =30th items
10th item will correspond to the class 5-10. 30th item will correspond to the class 20-25.
So, l1=5, cf=4, f=6 and c=5 So, l1=20, cf=21, f=12 and c=5
n 3n
−cf −cf
Now, Q
10−4
Now, Q
4 4 30−21
1 = l1 + × c = 5+ × 5 = l1 + × c = 20 + × 5
f 6 3
f 12
6×5 30 45
5+ = 5+ = 5 + 5 ⇒ Q1 = 10 = 20 + = 20 + 3.75 ⇒ Q3 = 23.75
6 6 12

OR

The missing value of the variate is taken as Y.

Value (X) Frequency (f) fX

12 8 96
20 16 320
27 48 1296

33 90 2970
Y 30 30Y
54 8 432
Σf = 200 ΣfX = 5114 + 30Y

Here,
¯¯¯¯
X = 31.87(Given)

Σf = 200

ΣfX = 5114 + 30Y

Now,
¯¯¯¯ ΣfX
X =
Σf

Now substituting the values in above formula, we get

5114+30Y
⇒ 31.87 =
200

⇒ 31.87× 200=5114+30Y
⇒ 6374=5114+30Y

⇒ 1260=30Y
1260
⇒Y = = 42
30

Hence, the missing value of the variate for the given distribution is 42.
Section B
18. (a) 2.0
percentage change in qty supplied
Explanation: Elasticity of supply = percentage change in price

19. (d) If technology improves

Explanation: The most common reason a PPF would shift is because of a change in technology, or because of economic
growth.
20. (a) True

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21. (d) Addition to the total revenue on the sale of an additional unit of Output
Explanation: M R = n T Rn − T Rn−1

22. (d) equal to fixed cost

Explanation: Total cost is found as the sum total of fixed cost and variable cost. At zero level of output, TC= TFC
because TVC is Zero at that point.
23. (d) A is false but R is true.
Explanation: A is false but R is true.
24. (a) Perfect competition
Explanation: In reality perfect competition has never existed. We can say that perfect competition may exist for
agricultural goods like rice, wheat etc. But for other commodities, there is always some difference between the products
like brand name of the product makes it different even though the product may be the same.
25. (c) TR
Explanation: We know that AR = TR

output
. From this we can derive T R = AR

output

26. (c) MC < AC

Explanation: When average cost falls, marginal cost is less than average cost. In this case, the marginal cost falls more
rapidly than the average cost.
27. (d) Perfectly elastic demand curve
Explanation: Because all products are homogeneous and buyers and sellers have perfect knowledge about the product.
Even if there is a slight change in the price of a product , consumers will shift to its substitutes. So, the demand is
perfectly elastic.
28. When more & more resources are explored and new technology is discovered, PPC would expand, indicating a larger &
larger flow of goods and services in the economy. But the scarcity of resources in relation to human wants will always
exist. Because human wants are unlimited while the resources are limited and these limited resources have alternative
uses. Accordingly, central problems can never be solved once for all.

OR

In microeconomic theory, the opportunity cost also known as the alternative cost is the value of the choice in terms of the
best alternative while making a decision. Opportunity cost is a key concept in economics, and has been described as
expressing "the basic relationship between scarcity and choice."
The term marginal cost refers to the opportunity cost associated with producing one more additional unit of a
good. Opportunity cost is a critical concept to economics. It refers to the value of the highest value
alternative opportunity.
29. Perfect knowledge means that both buyers and sellers are fully informed about the market price prevailing in the market.
Therefore no firm is in a position to charge different price and no buyer will pay a higher price. As a result uniform price
prevails in the market.
30. Demand curve, in economics, a graphic representation of the relationship between product price and the quantity of the
product demanded.
Causes of rightward shift of demand curve:
i. Increase in income of the consumer
ii. Increase in the price of substitute goods.
iii. Change in tastes and preferences in favour of the commodity.

Causes of leftward shift of demand curve:

i. Fall in income of the consumer.
ii. Fall in the price of or substitute goods.
iii. Change in tastes and preferences against the commodity.

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31. Producer's equilibrium refers to a situation, where a producer is producing that level of output, at which his profits are
maximized. In other words, it is a situation of profit maximisation. Following are the two conditions of producer's
equilibrium
1. Marginal Revenue (MR) = Marginal Cost (MC), and
2. MC must be rising beyond the point of equilibrium.

Following schedule explains the producer's equilibrium

Marginal Cost and Revenue Schedule

Output
(MR in Rs) (MC in Rs)

1 12 15

2 12 12
3 12 10

4 12 9

5 12 8
6 12 7

7 12 8

8 12 9
9 12 10

10 12 12

11 12 15

At 2nd level of output Marginal Revenue and Marginal Cost are equal but at the 3rd level of output Marginal Revenue >
Marginal Cost (12 > 10). Hence, firms will continue to expand production as its profits are not yet maximised.
The producer will be in equilibrium at the 10th level of output because beyond this level, Marginal Cost exceeds
Marginal Revenue.

OR

Total and Marginal Cost and Revenue Schedule

Output Total Revenue (TR) Total Cost (TC) Marginal Revenue (MR) Marginal Cost (MC)
(units) (Rs) (Rs) (Rs) (Rs)

1 10 8 10 8

2 18 15 8 7
3 24 21 6 6

4 28 25 4 4

5 30 33 2 8

The firm will be in equilibrium when the output is 4 units.

Reason: The conditions for the producer's equilibrium are

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a. Marginal Cost = Marginal Revenue
b. Beyond the level of output at which marginal cost= marginal revenue, marginal cost must be greater than marginal
revenue Both these conditions are satisfied at 4 units of output. So, the producer is in equilibrium when he produces 4
units.if a producer produces 5 unit of output, the producer will get the loss.
32. According to the law of equi-marginal utility, a consumer strikes his equilibrium when:
MUX MUY
= = MUM
PX PY

Let X be coffee and Y be tea.

When PX rises,
MUX MUY

PX
<
PY
[The equilibrium is disturbed]
A rise in the price of X in relation to V will induce the buyer to buy less of X and more of Y. When less of X is
purchased/consumed, MUX will rise. When more of Y is purchased, MUY will fall. The shift from X to Y will continue
MUX MUY
till PX
=
PY
.
Briefly, when PX rises, less of X and more of Y will be purchased.
33. i. False, it is not necessary because in the stage of diminishing returns to a factor, Total Product also increases, but at a
diminishing rate, it is a stage of diminishing return to a factor. Marginal product is the rate at which total product
increase or decrease.
ii. False, in the case of diminishing returns to a factor, only Marginal Product tends to fall. Total Product tends to
increase at a diminishing rate,it is a stage of diminishing return to a factor.
iii. True, Average Product (AP) falls only when Marginal Product (MP) is less than AP because Average product is per
unit of Total Product (TP) and MP is the change in total product.
34. Answer the following questions
Change in price
1. Percentage Change in Price = = Old price
× 100

2 200
= × 100 = = 28.57%
7 7%

Percentage change in demand = 0

% Change in quantity demanded
Elasticity of Demand(E d) = (−)
% Change in price

0
= = 0
28.57

2. Ed=-2, P = IO, ΔP = 11 − 10 = 1 , Q = 40, ΔQ = ?

ΔQ P
Ed = ×
ΔP Q

ΔQ 10
= −2 = ×
1 40

= −80 = 10ΔQ

= ΔQ = −8

New Quantity = Q + ΔQ
= 40 - 8 = 32 units

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