ISC Economics 2017 Class-12 Previous Year Question Papers Solved

ISC Economics 2017 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 2017 Class-12 Solved Previous Year Question Paper you can get the idea of solving.

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ISC Economics 2017 Class-12 Previous Year Question Papers Solved


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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)

Answer all questions.

ISC Economics 2017 Class-12 Previous Year Question Papers Solved 

Question 1.
Answer briefly each of the following questions (i) to (x): [10 × 2]
(i) What is meant by ex-ante demand and ex-post demand?
(ii) What is the short-run production function? Explain how is short-run production function different from the long-run production function.
(iii) Explain one main feature of each:
(a) Monopsony market.
(b) Monopoly market.
(iv) How is the elasticity of supply different from supply of a commodity?
(v) What is a direct tax?
(vi) Give two differences between a time deposit and demand deposit.
(vii) Explain with the help of an example, the problem of double-counting while calculating national income.
(viii) Give a reason for each of the following:
(a) The demand for a good increase when the income of the consumer increases.
(b) X and Y are substitute goods. A rise in the price of X results in the rightward shift of the demand curve of Y.
(ix) Write any two differences between the balance of trade and balance of payment.
(x) Explain the shape of the MC curve.
Answer 1:
(i) Ex-ante and Ex post Demand: Ex ante demand refers to the number of goods that consumers want to or willing to buy during a particular time period. It is the planned or desired amount of demand. Ex post demand, on the other hand, refers to the amount of the goods that the consumers actually purchase during a specific period. It is the number of goods actually bought. The number of goods actually bought is not the same as the amount that the consumers want (desire) to purchase. If the commodity is not available in adequate quantity, the quantity actually purchased (ex-post demand) will be less than the quantity that the consumers desire to purchase (ex-ante demand). Thus, consumers may end up buying more, or lesser quantity of goods that they had planned to buy.

(ii) Short-run is a period of time when production can be increased only by increasing the application of variable factor(s). Fixed factor, by definition, remains constant.
When one factor is a fixed factor and the other is a variable factor, production function may be specified as under:
Qx = f(L, K)
Here, Qx = Output of Good – X
L = Labour, a variable factor
K = Capital, a fixed factor
Difference:
1. Short run production function is ‘variable proportions type production function’ while the long period production function is ‘constant proportions type production function’.
2. Short run production function exhibits constant scale of output, while long run production function exhibits change in the scale of output.

(iii) 

(a) Single Buyer: Monoposony is a market structure where there is only one buyer of a commodity, service or input. It is a case of only one firm purchasing the entire product or factor service.
(b) Single Seller: Monopoly is a market situation where there is only one seller or producer, called monopolist of a commodity. It is a case of one firm or producer controlling the supply of the product. Since there is only one seller, any change in the amount of output produced by the monopolist would have significant influence over the market price. Because there is only one firm in monopoly, therefore the difference between the firm and the industry disappears.

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(iv) Supply refers to the quantity of a commodity that a seller is willing to sell corresponding to a given price, at a given point of time. On the other hand, elasticity of supply measures the degree of responsiveness of the quantity supplied of a commodity to a change in its price. It measures the sensitivity of the quantity supplied to a change in the price.

(v) Direct taxes refer to taxes that are imposed on property and income of individuals and companies and are paid directly by them to the government.

  • They are imposed on individuals and companies.
  • The ‘liability to pay’ the tax (i.e. impact) and ‘actual burden’ of the tax (i.e, incidence) lie on the same person, i.e. its burden cannot be shifted to others.
  • They directly affect the income level and purchasing power of people and help to change the level of aggregate demand in the economy.
  • Examples: Income tax, Corporate tax, Interest tax, Wealth tax, Death duty, Capital gains tax, etc.

(vi) Demand deposits and time deposits:

  • Demand deposits can be withdrawn at any time, whereas the time deposits can be with-drawn only after the expiry of a specific period.
  • There is no interest rate on demand deposits, whereas the time deposits carry a higher interest rate.
  • Demand deposits are chequeable and can be withdrawn through cheques, whereas time deposits are not chequeable.

(vii) To calculate national income overall value of goods and services produced by the country is taken into account. However, this method suffers from ‘double counting’, since the output of a production unit can be the input for another unit, it leads to double counting of a single variable. Only final goods are included when measuring national income. If intermediate goods were included too, this would lead to double counting; for example, the value of the tires would be counted once when they are sold to the car manufacturer, and again when the car is sold to the consumer. .

(viii)

(a) The income of the consumer determines the purchasing power of the consumer. There is a direct relationship between the income of the consumer and his demand for a product. The demand for good increases when the income of the consumer increases because purchasing power of the consumer increases. Now he has more income to spend on different goods and services.
(b) X and Y are substitute goods. A rise in the price of X result in a rightward shift of the demand curve of Y because substitute goods are those goods which satisfy the same type of need and hence can be used in place of one another to satisfy the given want. If price of good X rise, the consumer will shift his demand from X to Y good because they can be used in place of one another.
(ix)

Balance of Trade (BOT) Balance of Payment (BOP)
1. Balance of Trade refers to the difference between amounts of exports and imports of visible items. 1. It is an accounting statement that provides a systematic record of all economic transactions, between residents of a country and the rest of the world in a given period of time.
2. BOT includes only visible items. 2. BOP includes visible items, invisible items, unilateral transfers and capital transfers.
3. It does not record any transactions of capital nature. 3. It records all transactions of capital nature.

(x) MC curve is U-shaped. As output increases, MC curve slopes downward (up to OQ units), reaches the minimum (at point A) and then starts sloping upward beyond OQ level of output. (See Fig.) The U-shape of MC curve is because of the law of ( variable proportions. It is negatively sloped in the initial stage of production due to increasing returns to the variable factor and is positively sloped thereafter due to decreasing returns to the variable factor.
ISC Economics Question Paper 2017 Solved for Class 12 Q1

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