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HIMALAYAN INTERNATIONAL RESIDENTIAL SCHOOL PRACTICE EXAMINATION 2015 2016 ECONOMICS Time: 03:00Hrs. CLASS 12 Name: ........................................................... DATE: ../ . / 2015 Max. Marks: 80 Candidates are allowed additional 15 mins for only reading the paper. They must NOT start writing during this time. Answer all questions from part I which is compulsory. Answer ANY FIVE questions from Part II. The intended marks for questions are given in brackets [ ]. Part I (Compulsory) Answer all questions Question 1. [10 x 2=20] Answer briefly each of the following questions (i) to (x) Justify the following as price taker / price makers. a. an oligopoly market b. a perfectly competitive market. ii. With the help of a diagram, show how the equilibrium price and quantity changes when supply increases and demand remains unchanged. iii. With the rise in price by Rs 5, the quantity demanded changes from 100 units to 95 units. The price elasticity of demand is 1.2. Find out the price before change. iv. Differentiate between explicit cost and implicit cost. v. What is meant by high powered money? vi. Differentiate between price ceiling and floor price. vii. What does zero cross elasticity of demand between two goods imply? Give an example to explain. viii. When will a change in demand have no impact on the equilibrium price of a commodity? Show with the help of a diagram. ix. What is the significance of freedom of entry and exit under perfect competition? x. Define GNP at factor cost. How is it different from national income? i. Part II Answer any five questions Question 2 (a) Discuss the effect of elasticity of demand on: (i) A commodity which has many substitutes. (ii) A small part of individual s income spent on a commodity. This Paper consists of 3 printed pages Page- 1 [3]
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