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Class 11 - Economics
Sample Paper - 03 (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): It is for the economist to find out with the help of his knowledge of statistics, the truth.
Reason (R): The ruling and the opposition parties both quote statistics to support and prove their points of view.
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. _________ is known as Ideal index number
a) Paasche’s Index number
b) Laspeyres Index number
c) Fisher’s index number
d) None of these
3. If rxy = ryx, correlation between x and y is
a) Non linear
b) Symmetric
c) No correlation
d) None of these
4. Construct price index number from the following data by applying(Laspeyre’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) 144.82 b) 145.91
c) 154.32 d) 145.93
5. Change in the cost of living is best shown by the:

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a) Industrial production index
b) Consumer price index
c) Human development index
d) Wholesale price index
6. In Laspeyre’s index number, the weight pertains to
a) None of the given
b) Both Base year and current year quantities
c) Current year quantities
d) Base year quantities
7. Non-economic activities are
a) Concerned with investment
b) Not concerned with money
c) None of these
d) Concerned with money
8. If vertical lines are drawn at every point of straight line in frequency polygon then by this way frequency polygon is
transformed into
a) width diagram
b) length diagram
c) dimensional bar charts
d) histogram
9. A weighted aggregate price index where the weight for each item is its current-period quantity is called the
a) Laspeyres Index
b) Paasche Index
c) Consumer Price Index
d) Aggregate index
10. In a marketing survey, the price of tea and coffee in a town based on quality was found as shown below. Could you find
any correlation between the two?
Pricetea 88 90 95 70 60 75 50

Pricecoffee 120 134 150 115 110 140 100

a) 0.83
b) 0.89
c) 0.87
d) 0.85
11. For a data Lasperey's index number is 120 and fisher's index number is 125. Calculate Paasche's index number.
12. What do you understand by change in origin and change in scale?

OR

What are two main differences between mode and median?

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13. Prepare a frequency distribution by inclusive method taking class interval of 7 from the following data
28, 17, 15, 22, 29, 21, 23, 27, 18, 12, 7, 2, 9, 4, 1, 8, 3, 10, 5, 20, 16, 12, 8, 4, 33, 27, 21, 15, 3, 36, 27, 18, 9, 2, 4, 6, 32,
31, 29, 18, 14, 13, 15, 11, 9, 7, 1, 5, 37, 32, 28, 26, 24, 20, 19, 25, 19, 20, 6, 9
14. Present the following data by a percentage sub-divided bar diagram.

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Subject Number of Students (in '000)
2011-12 2012-13
Statistics 25 30

Economics 40 42
History 35 28

OR

Construct a histogram for the following frequency distribution.

Mid-points Frequency
15 6
25 10

35 15
45 8
55 12

65 3
75 18
15. Explain difference between the primary data and the secondary data.
16. Calculate coefficient of rank correlation from the following data.
X 48 33 40 9 16 16 65 24 16 27

Y 13 13 24 6 15 4 20 9 6 19
17. Calculate the upper and lower quartiles for the following frequency distribution.
Class Interval Frequency (f)
13-25 6

25-37 11
37-49 23
49-61 7

61-73 3
Total 50

OR

Calculate mode of the following series.

Groups 10-19 20-29 30-39 40-49 50-59 60-69 70-79

Frequency 10 12 18 30 16 6 8
Section B
18. A straight line supply curve cuts the Y-axis in its negative range. What is the elasticity of supply?
a) perfectly inelastic
b) unitary elastic
c) highly elastic

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d) less elastic
19. Which of the following is a calls of economic problem ?
a) Scarcity of Resources
b) Alternative Uses
c) Unlimited Wants
d) All of these
20. ________ refers to the minimum price, fixed by the government, which is above the equilibrium price.
a) Price floor
b) Both price floor and minimum support price
c) None of these
d) Minimum support price
21. A firm can sell more units of a good only by reducing the price of a commodity. Marginal Revenue of this firm:
a) Will be equal to Average Revenue
b) Will be negative
c) Will be less than Average Revenue
d) Will be more than Average Revenue
22. AVC and AFC always lie below AC because
a) Their sum is equal to AC
b) They are convex
c) They are concave
d) They are always downward sloping
23. Assertion (A): Diamond jewellery, costly carpets have less demand in the market.
Reason (R): The prices of these items are abnormally high as compared to other cheaper items.
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 is not a feature of perfect competition?
a) Perfect knowledge of the market
b) Homogeneity of product
c) Large number of buyers and sellers
d) Advertisement and selling cost
25. The behaviour of Average Revenue when Total Revenue increases at a constant rate are:
a) Zero
b) Constant
c) Decreasing
d) Increasing
26. Can AC fall when MC is rising?
a) Yes
b) Can’t say
c) None of these
d) No
27. When AR=Rs. 10 and AC=Rs. 8, the firm makes?
a) Normal profit
b) Gross profit
c) Supernormal profit

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d) Net profit
28. What do you understand by positive economic analysis?​​

OR

What is an economic problem? Why does it arise?

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29. Why is a firm under perfect competition a price-taker and not a price-maker?
30. Explain the change in demand of a good on account of the change in prices of related goods.
31. Explain producers equilibrium with the help of a numerical example using marginal revenue and marginal cost approach.

OR

What do you mean by producers equilibrium? State and briefly explain the conditions of producer's equilibrium with
Marginal Revenue and Marginal Cost approach. Use diagram.
32. How will a rational consumer react under the following situation:
MU X PX
i. <
MU Y PY
ii. TU is maximum, when MU = 0
iii. How much is TU at zero level of consumption?
33. Calculate the MP of variable factor and indicate the various phases of Law of Variable Proportions from the following
schedule:
Units of variable factor 0 1 2 3 4 5 6

TP (in units) 0 50 110 150 180 180 150

34. Answer the following questions
1. A consumer buys 30 units of a good at a price of Rs 10 per unit. Price elasticity of demand for the good is (-)1. How
many units the consumer will buy at a price of Rs 9 per unit? Calculate.
2. How does 'a portion of income spent on a good' effect elasticity of demand?

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Class 11 - Economics
Sample Paper - 03 (2023-24)

Solution

Section A
1. (b) Both A and R are true but R is not the correct explanation of A.
Explanation: It is for the economist to find out with the help of his knowledge of statistics, the truth. The ruling and the
opposition parties both quote statistics to support and prove their points of view.
2. (c) Fisher’s index number
Explanation: Fisher has discovered weighted index number in which he tries to calculate best index number because he
has taken both current and past years quantity as the base of price index number.
3. (b) Symmetric
Explanation: When the coefficient of correlation between X and Y (rxy) is equal to the coefficient of correlation
between Y and X (ryx), the relationship between X and Y is said to be symmetric.
4. (d) 145.93
Explanation:
Commodity Price (P0) Quantity (q0) Price (P1) Quantity (q1) P0q0 P1q0

A 2 8 4 5 16 32
B 5 12 6 10 60 72

C 4 15 5 12 60 75

D 2 18 4 20 36 72
TOTAL 172 251
sum of p1 q0 251
Laspeyre’s Index No. = × 100 = × 100 = 145.93
sum of p0 qo 172
5. (b) Consumer price index
Explanation: The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of
consumer goods and services, such as transportation, food, and medical care.
6. (d) Base year quantities
Explanation: A weighted aggregative price index using base period quantities as weights is known as Laspeyre’s price
index.
This method uses the base period quantities as weights.
7. (b) Not concerned with money
Explanation: Non-economic activity is undertaken without taking into account monetary reward.
8. (d) histogram
Explanation: histogram
9. (b) Paasche Index
Explanation: IIt's as per definition of Paache's index number.
(a) 0.83
10. Explanation:
X (Pricetea) Y (Pricecoffee) dX dY dX 2 dY 2 dXdY

88 18 5 324 25 90
120

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90 134 20 19 400 361 380
95 150 25 35 625 1225 875
70 (A) 115 (A) 0 0 0 0 0

60 110 -10 -5 100 25 50

75 140 5 25 25 625 125
50 100 -20 -15 400 225 300

∑ 38 64 1874 2486 1820

N ∑ XY − ∑ X ∑ Y
r=
√N ∑ X 2 − ( ∑ X ) 2 √N ∑ Y 2 − ( ∑ Y ) 2
7 ( 1820 ) − ( 38 ) ( 64 )
= = 0.83
√7 ( 1874 ) − ( 38 )2√7 ( 2486 ) − ( 64 )2

√
∑P q ∑P q
1 0 1 1
′
11. Fisher s Index = ∑P q ∑P q
0 0 0 1

Fisher's Index = √L × P
125 = √120 × P
On squaring both sides;
15625 = 120 x P
15625
120
=P
P = 130.21
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12. Change in Origin refers to a condition in which all values of a series are increased or decreased by a constant value.
For example, three values are given as 3, 5 and 7. Now if each value is increased or decreased by a certain constant
value, say 2 then this represents a change in origin.
Change in Scale refers to a condition when all values of a series are multiplied or divided by a constant value. For
example, if the series is given as 3, 5 and 7. If we multiply or divide each value of the series by a constant value, say 5,
then this represents a change in scale.

OR

The two main differences between mode and median are:

Mode Median

(i) It is that variable which is repeated the greatest number of times, i.e. Mode gives us It is the middle value of a
the typical value in a distribution. particular series.

(ii) It does not divide the series. It gives the value corresponding to the maximum It divides the series into two
frequency. equal parts.
13. We first find the lowest value in the given data and then the highest value. Then, in order to prepare inclusive frequency
distribution, we need class size which is given as 7. Then, we form inclusive class intervals with respective frequency as
visible in the given data. As in the question, the lowest value is 1 and the highest is 37. With the help of tally bar,

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inclusive frequency distribution will be derived.
The frequency distribution by the inclusive method of given data is shown below:
Class Interval Tally Bar Frequency (f)
1-7 15

8-14 || 12
15-21 15
22-28 10

29-35 | 6
36-42 || 2
Total 60
14. First, we prepare a percentage table.
Percentage Table

2011-12 2012-13
Subject
Number of students (in '000) Percent Number of students (in '000) Percent
Statistics 25 25 30 30

Economics 40 40 42 42
History 35 35 28 28
Total 100 100 100 10

A percentage sub-divided bar diagram of given data is shown below

OR

The distribution will take the following form

Mid-points Frequency
10-20 6
20-30 10

30-40 15
40-50 8
50-60 12

60-70 3
70-80 18

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Step 4. This distribution is represented by the given histogram

15. Primary Data

1. The data collected by the investigator for his own purpose for the first time are called primary data.
2. These are original as these are collected from the source of origin.
3. These are costlier in terms of time, money and efforts involved.
4. Example: Investigator makes a list of marks obtained by students in economics of class XI by interrogating them.

Secondary Data
1. Data which are already in existence and which have been collected for some other purposes are called secondary
data.
2. These are not original as these are already in existence. These can be obtained from published or from any other
sources.
3. These are less costlier in terms of time, money and efforts involved.
4. Example: Investigator collects the marks obtained by class teacher in economics of class XI from his school records
like award list, result register etc.
16. In the given sum Equal Ranks or Tie in Ranks are assigned to Y. In such case the same ranks are assigned to two or more
entities, then the ranks are assigned on an average basis. The ranks shall be calculated as: (5+6)/2 = 5.5 and so on.
The formula to calculate the rank correlation coefficient when there is a tie in the ranks is:

[ 1
( )
1
(
6 ΣD 2 + 12 m 31 − m 1 + 12 m 32 − m 2 )]
rk = 1 −
n3 − n
Calculation of Rank Correlation
X R1 Y R2 D = R1 - R2 D2
48 2 13 5.5 -3.5 12.25
33 4 13 5.5 -1.5 2.25
40 3 24 1 2.0 4.0

9 10 6 8.5 1.5 2.25

16 8 15 4 4.0 16.0
16 8 4 10 -2.0 4.0

65 1 20 2 -1.0 1.0
24 6 9 7 -1.0 1.0
16 8 6 8.5 -0.5 0.25

27 5 19 3 2.0 4.0

ΣD2 = 47

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[ 1
( )
1
(
6 ΣD 2 + 12 m 3 − m + 12 m 3 − m + 12 m 3 − m )
1
( )]
∴ rk = 1 −
n3 − n
6 ( 47 + 2 + 0.5 + 0.5 ) 6 × 50 300
=1− 990
=1− 990
=1− 990
= 1 - 0.303 = 0.697
It indicates that there is a moderate degree of positive correlation.

17. Class Interval Frequency (f) Cumulative Frequency (cf)

13-25 6 6
25-37 11 17

37-49 23 40
49-61 7 47
61-73 3 50

n = Σf = 50
Calculation of Upper and Lower Quartiles
Lower Quartile

Lower Quartile number q 1 = Size of ( ) () n

4
th item

=
()50
4
th item = 12.5th item

cf just greater than 12.5 is 17 and the corresponding class is 25-37.

So, l1=25
cf =6, f=11 and c=12
n
4
− cf
∴ Q1 = l1 + ×c
f
12.5 − 6 6.5
= 25 + 11
× 12 = 25 + 11
× 12 = 25 + 7.09
⇒ Q1=32.09

Upper Quartile

Upper Quartile number q 3 = Size of 3 ( ) () n

4
th item

= Size of 3 ()
50
4
th item = 37.5th item

cf just greater than 37.5 is 40 and corresponding class is 37-49.

So, l1=37, cf=17
f=23
c=12
3n
4
− cf
∴ Q3 = l1 + ×c
f

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37.5 − 17 20.5
= 37 + × 12 = 37 + × 12
23 23
=37 + 10.70 ⇒ Q3=47.70

OR

Steps to be followed to calculate the Mode are:

1. Locate the maximum frequency denoted by fm
2. Determine the class corresponding to fm this will be your Modal class
f1 − f0
3. Calculate the Mode using given formula: M o = l 1 + ( ) 2f 1 − f 0 − f 2
×c

Calculation of Mode

Groups ( Inclusive Groups (Exclusive) Frequency (f)

10-19 9.5-19.5 10

20-29 19.5-29.5 12
30-39 29.5-39.5 18
40-49 39.5-49.5 30

50-59 49.5-59.5 16
60-69 59.5-69.5 6
70-79 69.5-79.5 8

By inspection, we observe that the modal class is 39.5-49.5 as it has the highest frequency.
Then, l1=39.5, f0 =18, f1=30, f2=16 and c=10
f1 − f0
∴
( )
Mode, M o = l 1 +
2f 1 − f 0 − f 2
×c
30 − 18
= 39.5 + × 10
2 × 30 − 18 − 16
12
= 39.5 + × 10
26
⇒ Mo = 44.11
Section B
18. (d) less elastic
Explanation: A straight line supply curve cuts the Y-axis in its negative range. The supply will be less elastic. It means
the percentage change in quantity supplied changes by a lower percentage than the percentage of price change.
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19. (a) Scarcity of Resources
Explanation: The economic problem – sometimes called the basic or central economic problem, asserts that an
economy's finite resources are insufficient to satisfy all human wants and needs. It assumes that human wants are
unlimited, but the means to satisfy human wants are scarce.
20. (b) Both price floor and minimum support price
Explanation: Price floors are sometimes called “price supports,” because they support a (minimum) price by preventing

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it from falling below a certain level. The price is set above the equilibrium price for the benefit of the suppliers or the
producers.
21. (c) Will be less than Average Revenue
Explanation: This form of the market can be Monopoly or Monopolistic competition. MR is less than AR.
22. (a) Their sum is equal to AC
Explanation: AC curve will always lie above the AVC and AFC curve because AC , at all levels of output includes both
AVC and AFC.
23. (d) A is false but R is true.
Explanation: Diamond jewellery, costly carpets have more demand in the market because the prices of these items are
abnormally high as compared to other cheaper items.
24. (d) Advertisement and selling cost
Explanation: Advertisement and selling cost is not a feature of perfect competition.
25. (b) Constant
Explanation: When TR increases at a constant rate MR is constant. When MR is constant, AR is equal to MR and
constant.
26. (a) Yes
Explanation: AC can fall when MC is rising. However it is possible only when MC is less than AC.
27. (c) Supernormal profit
Explanation: When AR is more than AC, then a firm can earn supernormal profits. This implies that the cost of
production is less than the revenues earned. So, super normal profits are earned. Normal profits are earned when
AC=AR
28. Positive economic analysis refers to the analysis in which we study what is or how an economic problem is solved by
analysing various positive statements and mechanisms. These are factual statements and describe what was, what is and
what would be. These statements can be tested, proven or disproven and do not involve personal value judgements. For
example, if someone says that it is raining outside, then the truth of this statement can be verified. It deals with actual or
realistic situations. It uses objective analysis in the study of economics.

OR

An economic problem refers to any such problem in the economy that is concerned with the production of goods and
services to satisfy the unlimited wants of the economy through the utilization of scarce resources. The problems arise
when these resources become scarce and the resources have alternative uses.
29. In perfect competition, there are two main reasons why a firm cannot get away with setting its prices above the market
price. First, there is no difference between its product and that of every other firm in the market. Therefore, no one will
pay extra for a firm’s product. If a firm tries to charge a higher price, buyers will go with other sellers, while at a lower
price, the firm will not be able to cope with demand due to a large number of buyers.
Second, if a firm were to succeed in setting a higher price, more firms would enter the market, attracted by the higher
profits that were available. This would increase supply and drive down the price of the firm’s product. These two factors
make it impossible for firms to set their prices above the market price. This makes them into price takers.
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30. Related goods are of two types
1. Substitute goods: Substitute goods are those goods which can be used in place of one another for satisfaction of a
particular want, for example tea or coffee. The effect of change in price of a substitute good on the demand of the
concerned good is direct. The rise in the price of the substitute good causes demand for the concerned good to rise,
and fall in the price of the substitute good causes demand the concerned good to fall. For example, if price of a

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substitute good (say, coffee) increases, then demand for given commodity ( say, tea) will rise as tea will become
relatively cheaper in comparison to coffee.
2. Complementary goods: Complimentary goods are those goods which are used together to satisfy a particular want,
for example car and petrol. The effect of a change in the price of a complementary good on the demand of the
concerned good is inverse. Rise in price of the complementary good causes demand for the concerned good to fall,
and fall in the price of the complementary good causes the demand for the concerned good to rise. For example, if
price of a complimentary good (say, sugar) increases, then demand for given commodity (say, tea) will fall as it will
be relatively costlier to use both the goods together.
31. Producer’s equilibrium refers to a situation, where a producer is producing that level of output, at which its profits are
maximum. In other words, it is a situation of profit maximisation or cost minimisation (under MR and MC approach).
Following schedule explain the producer’s equilibrium:
Units of Output (Q) MR (Rs) MC (Rs)

1 12 15

12
2 12
MR = MC
10
3 12
MR>MC

4 12 9
5 12 8

6 12 7

7 12 8
8 12 9

9 12 10

12
10 12 Producer's equilibrium
MR = MC

11 12 15 MR < MC

Conditions of producer’s equilibrium

Following are the two conditions of producer’s equilibrium:
i. MR=MC (Marginal Revenue = Marginal Cost)
ii. MC must be rising at the point of equilibrium or MC curve must cut MR curve from below.

In the given schedule MR = MC, both at 2 units and 10 units of output, but the second condition of rising MC is fulfilled
only at 10th unit of output. So, the producer is in equilibrium when he is producing 10 units.

OR

Producer’s equilibrium refers to a situation, where a producer is producing that level of output, at which its profits are
maximum. In other words, it is a situation of profit maximisation or cost minimisation (under MR and MC approach).
According to this approach, the producer is in equilibrium when the Marginal Revenue (MR) is equal to the Marginal
Cost (MC) and Marginal Cost curve cuts the Marginal Revenue curve from below. Two conditions under this approach
are:

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i. MC = MR
ii. MC curve should cut the MR curve from below.

MR is the addition to Total Revenue from the sale of one more unit of output and MC is the addition to Total Cost for
increasing the production by one unit. The basic aim of every producer is to maximise the profit. For this, a firm
compares its MR with its MC.
As long as the addition to revenue is greater than the addition to cost, it is profitable for a firm to continue producing
more units of output.
In the below diagram, output is shown on the X-axis, revenue and cost on the Y-axis.
The Marginal curve, is ‘U’ shaped and p = MR= AR.
MC = MR at two points, R and K in the diagram but profits are maximised at point K, corresponding to OQ level of
output. Between OQ1 and OQ levels of output, MR exceeds MC. Therefore, firm will not stop at point R but will
continue to take advantage of additional profit. Thus, equilibrium will be at point K where both the conditions are
satisfied.
Two other situations may also exist:
i. MR > MC At output level less than
OQ, MR > MC which implies that firm is earning profit on the last unit of output. The marginal profit provides an
incentive to the firm to increase production and move towards OQ units of output. Therefore, when MR>MC, the
firm increases output to maximise its profit.
ii. MR < MC At output level more than
OQ, MR < MC which implies that firm is making a loss on its last unit of output. Hence, in order to maximise profit,
a rational producer decreases output as long as MC > MR. Thus, the firm moves towards producing OQ units of
output.

32. Consumer is an individual who buys products or services for personal use and not for manufacture or resale.
i. Under this case, the consumer is getting more marginal utility per rupee so he will reduce the consumption of both
the goods till he reaches the equilibrium level.
ii. Because TU stops increasing when MU = 0.
iii. Zero.
33. Law of variable proportions occupies an important place in economic theory. This law examines the production function
with a one-factor variable, keeping the quantities of other factors fixed. In other words, it refers to the input-output
relation when output is increased by varying the quantity of one input.
Variable Factors TP (in units) MP (in units)
Stage
(VF) (TP) MPn = TPn - TPn-1

0 0 -

1 50 50 1st (Increasing returns to a factor)

2 110 60
3 150 40 2nd (Diminishing returns to a factor)
4 180 30

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5 180 0

6 150 -30 3rd (Negative returns to a factor)

34. Answer the following questions
1. Given, Old Price (P) =Rs 10; Old Quantity (Q) = 30 units
New Price = Rs 9
∴Change m price (ΔP) = -1(9 -10)
Change in quantity (Q) = ?
Elasticity of demand (Ed) = (-)1
P ΔQ
We know that, E d = ×
Q ΔP
10 ΔQ
( − )1 = ×
30 −1
⇒ ΔQ = 3
∴ New quantity demanded = 30 + 3 = 33units.
2. Items such as thread, needle will have an inelastic demand as consumers spend a small proportion of their income on
such items.
On the other hand, goods on which the consumers spend a large proportion of their income (clothes, food item, etc)
tend to have elastic demand.

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