ISC Economics 2015 Class-12 Previous Year Question Papers Solved for practice. Step by step Solutions with Questions of Part-1 and 2. By the practice of Economics 2015 Class-12 Solved Previous Year Question Paper you can get the idea of solving.

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ISC Economics 2015 Class-12 Previous Year Question Papers Solved

Part-I

Part-II

Maximum Marks: 80
Time allowed: 3 hours

• Candidates are allowed additional 15 minutes for only reading the paper.
• They must NOT start writing during this time.
• Answer Question 1 (Compulsory) from Part I and five questions from Part II.
• The intended marks for questions or parts of questions are given in brackets [ ].

Part – I (20 Marks)

ISC Economics 2015 Class-12 Previous Year Question Papers Solved

Question 1.
Answer briefly each of the following questions (i) to (x): [10 × 2]
(i) Define marginal utility. When can it be negative?
(ii) What is meant by production function?
(iii) Name the market where average revenue is equal to marginal revenue. Give a reason for your answer.
(iv) Give one difference between accounting cost and opportunity cost.
(v) What is the reason for an indeterminate demand curve under Oligopoly?
(vi) What is meant by a propensity to consume?
(vii) Explain discounting bills of exchange as one of the functions of the banks.
(viii) Differentiate between revaluation of currency and appreciation of currency.
(ix) How can gross domestic product at factor cost be obtained from the gross national product at market price?
(x) What is meant by revenue deficit? Explain its implication.
(i) Marginal utility is the net addition made to total utility by the consumption of an additional unit. Mun = Tun – Tun-1. when total utility is maximum, marginal utility is zero.

(ii) Production function studies the functional relationship between physical inputs and physical outputs.

(iii) Perfect Competition: Under perfect competition, AR or price remains fixed for the firm. So MR will also be constant. Hence AR = MR.

(iv) Accounting Cost: This is the actual, numeric dollar amount that a firm (company) pays to run their business.
Opportunity Cost: This is the cost of choosing one thing over another.

(v) The main reasons for the indeterminate price and output under oligopoly may be summarised as follows:

• Different Behaviour patterns: In oligopoly due to interdependence, a vast variety of behaviour patterns becomes possible.
• Indeterminate Demand Curve: Another cause of indeterminateness of price and output in an oligopoly is indeterminate demand curve.

(vi) The propensity to consume means the proportions of total income or of in increase an income that consumers tend to spend on goods and services rather than save.

(vii) Discounting of Bills of Exchange
Another important form of bank lending is through discounting or purchasing the bills of exchange. A bill of exchange is drawn by a creditor on the debtor specifying the amount of debt and also the date when it becomes payable. Such bills of exchange are normally issued for a period of 90 days. Thus, creditors cannot get it encashed from the debtors before the maturity period. However, if the creditor needs money before the maturity period (i.e., 90 days), he can get it discounted from the commercial bank. The bank makes payment to the creditor after deducting its commission. When the bill matures, the bank will get payment from the debtors.

(viii) Revaluation means a rise of domestic currency in relation to foreign currency in a fixed exchange rate whereas appreciation implies an increase in the external value of a currency.

Part – II (60 Marks)

Previous Year Question Papers Solved Economics 2015 for ISC Class-12

Question 2.
(a) Discuss the relationship between the income of the consumer and demand for a commodity with respect to normal goods, inferior goods and necessities. [3]
(b) Differentiate between the extension of demand and an increase in demand, using diagrams. [3]
(c) Explain with the help of a diagram the consumer’s equilibrium through utility approach. [6]
(a) Normal good: Demand will increase and the demand curve will shift towards the right.
An inferior good: Demand will decrease and the demand curve will shift towards left.

(b)

(c) In the case of the consumer consumes two or more than two commodities his equilibrium will be determined by the Law of Equi-marginal utility.
According to the Law of Equi-marginal utility, the consumer spends his limited income on different goods in such a way that marginal utility derived by all commodities are equal.
MUX = MY = MUZ ………
Explanation: Let us now discuss the Law of Equi-marginal Utility with the help of a numerical example: Suppose, the total money income of the consumer = ₹ 5.
Price of good X and Y = ₹ 1 per unit.
So, the consumer can buy a maximum of 5 units of ‘X’ or 5 units of Y. The given table shows the marginal utility which the consumer derives from various units of ‘X’ and ‘Y’.
Table – Consumer’s Equilibrium – 2 Commodities

From the table, it is obvious that the consumer will spend the first rupee on commodity ‘X’, which will provide him utility of 20 utils. The second rupee will be spent on commodity ‘ Y’ to get utility of 16 utils. To reach the equilibrium, a consumer should purchase that combination of both the goods, when
(i) MU of the last rupee spent on each commodity is same; and
(ii) MU falls as consumption increases.
It happens when a consumer buys 3 units of ‘X’ and 2 units of ‘ Y’ because:
MU from last rupee (i.e5th rupee) spent on commodity Y gives the same satisfaction of 12 utils as given by last rupee {i.e., 4th rupee) spent on commodity X; and
MU of each commodity falls as consumption increases.
The total satisfaction of 74 utils will be obtained when a consumer buys 3 utils of ‘X’ and 2 units of ‘ Y’. It reflects the state of the consumer’s equilibrium. If the consumer spends his income in any other order, total satisfaction will be less than 74 utils.

Question 3.
(a) Discuss any two properties of the indifference curve. [3]
(b) Draw diagrams to show the elasticity of demand when it is: [3]
(i) Greater than one
(ii) Less than one
(iii) Unity
(c) Explain the geometric method of calculating the elasticity of supply. [6]
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