MS KENDRIYA VIDYALAYA SANGATHAN, KOLKATA REGION

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1 MS KENDRIYA VIDYALAYA SANGATHAN, KOLKATA REGION 3 rd PRE-BOARD EXAMINATION MARKING SCHEME CLASS-XIIECONOMICS M. MARKS: 100 General Instruction: 1. Please examine each part of question carefully and allocate the allotted for the part as given in the marking scheme below. TOTAL MARKS F ANY ANSWER MAY BE PUT IN A CIRCLE ON THE LEFT SIED WHERE THE ANSWER ENDS. 2. The answers given in the marking scheme below are suggested answers. The content is thus indicative. The candidates may express the content in various forms. But, for standardization of evaluation it is necessary to follow the marking scheme suggested here on the basis of expected content. 3. For mere arithmetical errors, there should be minimal deduction. Only ½ mark be deducted for such an error. 4. Wherever only two/three or a given number of examples/factors/points are expected only the first two/three or expected number should be read. The rest are irrelevant and must not be examined. 5. There should be no effort at moderation of the by the evaluating teachers. The actual total obtained by the candidate may be of no concern to the evaluators. General Note: In case of numerical questions no mark is to be given if only the final answer is given. Q.NO. Expected Answers/ Value points Distribution of Marks 1. Goods whose demand increases with increase in income of the 1 consumer & vice-versa 2. Rise in the price of inputs ( only one cause to be given) 1 3. (ii) Complements 1 4. Oligopoly market where the firms produce differentiated 1 products 5. (i) No control over the price 1

2 6. When there is a rise in the prices of other goods, the supply of the given good will decrease and the supply curve will shift to the left.. 7. PPC is a downward sloping, concave curve. Concavity shows increasing marginal rate of transformation as more quantity of one good is produced by reducing quantity of the other good. This behavior of MRT is based on the assumption that no resource is equally efficient in production of all the goods. As more of one good is produced, the less and less efficient resources have to be transferred from production leading to increasing MRT. Explain with example 3 3 Q.NO. Expected Answers/ Value points 8. Scarcity of resources with unlimited wants. It leads to problem of making choices in allocation of resources. Problem of distribution of income and wealth among different sections of the society. The main theme is who gets how much 9. Formula + process of calculation + final answer. Q.D. will be 70 units 10. i) IC is convex to the point of origin ii) IC slopes downwards to the right iii) Two IC s can never intersect each other iv) Higher IC gives higher level of satisfaction Given PX = 4,PY= 5 and MUX = 5, MUY = 4a consumer will be in equilibriumwhen MUX / PX = MUY/ PY Substituting values, we find that 5/ 4 > 4 / 5 or MUX/ PX = MUY/ Distribution of Marks With explanation Points Explanation 2+ PY Since per rupee MUX is higher than perrupee MUY, consumer is not in equilibrium. The consumer will buy more of X and less of Y. As a result MUX will fall and MUY will rise. The reaction will continue tillmux /PX and MUY/ PY are equal and consumer is in equilibrium. 11. Monopoly i) Single seller ii) No close substitutes of the product iii) Barrier to the entry of new firms Monopolistic Competition i) Large No. of sellers ii) differentiated products which are close substitutes iii) Free entry to the new firms. Demand curve is more elastic in monopolistic competition as there are large no. of close substitutes available. ½ + ½ 03 points 3

3 Q.NO. Expected Answers/ Value points 12. i) False AC can fall even when MC is rising. It happens when rising MC is less than AC. ii) True The difference between TC and TVC is TFC which remains constant at all levels of output. iii) False When TR is maximum, MR is equal to zero. A schedule may be drawn to prove it. ATC minus AVC is AFC. AFC= TFC/output. Therefore, as output increases, AFC falls. So, the difference between ATC and AVC decreases with increase in output. ATC and AVC can never be equal at any level of output as AFC can never be zero because TFC is positive Marks If reason is not given, No 13. i) if the price of substitute good rises, the market demand will rise and vice-versa. If the price of complementary good rises, the markets demand falls and vice-versa. Explain them, taking examples. ii) No. of buyers rises, market demand also rises and vice-versa. Explain it, by taking one example. 14. The behaviour of TP is summed up as the law of variable proration. There are 3 phases in the behaviour of TP. 1 st phase: TP rises at an increasing rate 2 nd phase: TP rises at a diminishing rate 3 rd phase: TP falls & The three phases in the behavior of MP are 1 st phase: MP rises 2 nd phase: MP falls and remains positive 3 rd phase: MP falls and becomes negative

4 Q.NO. Expected Answers/ Value points 15. When the price of tea rises, the consumers will substitute it with relatively cheaper drink i.e. coffee. Thus, the demand for coffee will increase and the demand curve shifts rightwards on account of rise in the price of its substitutes. Draw the diagram to show it, Therefore, the equilibrium price of coffee increases and equilibrium quantity also increases when the price of tea rises in Kolkata. Explanation Diagram Effect of equilibrium price & quantity 16. i) Capital receipt ii) None of these iii) CRR Annual financial statement of estimated receipts and estimated 1 expenditure of the govt. during a fiscal year 20. i) Currency held by the public ½ + ½ ii)net demand deposits held by Commercial Banks 21. Change in Y = 100 Change in I = 25 K=4 K=1/1-MPC 4=1/1-MPC 3 MPC=0.75 Thus, it is true. MPC is equal to BOT is defined as the difference between the value of goods exported and the value of goods imported. Balance on trade account = Export of material goods Import of material goods. Current Account Balance = Trade balance + Balance on account of invisibles. Invisibles include services as well as current transfers. 1 ½ + 1 ½ Q.NO. Expected Answers/ Value points i) When price of foreign currency falls, imports from that country become cheaper. So, imports increase and hence, the demand for foreign currency rises. 1 ½ + 1 ½

5 ii) When foreign currency becomes cheaper in terms of domestic currency, it promotes tourism to that Country. As a result, the demand for foreign currency rises. 23. Y MPC C S APS 6 blank NNDI = (i) (vi) + (iv) + (iii) = = Rs.860 Crores Personal Income = (ii) (v) (viii) = = Rs. 350 Crores 25. FITA Factor Income earned by non-residents working within the domestic territory e.g. salaries to Americans working in Indian Embassy in America. FIFA Factor Income earned by the residents of the country from abroad e.g. salaries to Indians working in American Embassy in India. DP is the total market value of all final goods and services produced by both resident and non-residents within the domestic territory of a country during a year. N P is the total market value of all the final goods and services produced by the residents both within the domestic territory and abroad during a year. DP does not include NFIA Whereas NP includes it. DP can be more than NP when NFIA will be negative spaces ½ each Meaning 1+1 Example 1+1 1mark

6 26. Foreign exchange rate in a free market is determined at the point where demand for foreign exchange and supply of foreign exchange are equal. Diagram to be drawn and explanation to be given 27. If AD is greater than AS, there will be unplanned, undesired decrease in inventories. Firms would increase employment and output. This process will continue till the economy is back at equilibrium where AD = AS If AD is less than AS, the reverse will happen. Diagram to be drawn and explanation to be given. Or If planned saving is >planned investment, the households will save more and spend less on consumption. Hence, there will be unplanned and undesired increase in inventories. Firms should decrease employment and output till planned saving=planned investment. Diagram & explanation Diagram 2 Diagram to be drawn and explanation to be given. 28. i) Any expenditure that either creates an asset or reduces a liability is called capital expenditure. Any expenditure that neither creates an asset nor reduces a liability is called revenue expenditure. Eg. CE. Construction of factory, RE: Payment of salaries. ii) Reallocation of resources: Price stability : Reducing inequalities: Financing public enterprises etc. 3+3 Explanation to be given

7 Q.NO. Expected Answers/ Value points 29. Money creation is determined by the amount of initial deposit and the LRR. It assumed that all the money that goes out of banks is re-deposited into the banks. Let LRR be 20% and initial deposit Rs. 1000/-. As required the banks keep 20% i.e. 200 as reserve and lends Rs.800/-. Those who borrow, use this money for making payments. Those who receive payments put the money back into the banks. In this way banks receive Rs. 800, keeps reserve Rs.160/- and lends Rs.640/- Again Rs.640/- is deposited to the banks. The money goes on multiplying in this way and ultimately, total money creation is Rs. 5000/- 6 Total money creation = Initial deposit X 1/ LRR The students may draw a table and show it. 30. NI = (i) + (ii)+(iv) + (v) + (ix) + (vii) = (-50) = Rs. 2700/- Crores PDI = (iii) (xi) (viii) (xiii) = Rs. 1530/- Crores 3 +3

ECONOMICS. Time allowed : 3 hours Maximum Marks : 100 QUESTION PAPER CODE 58/1/1 SECTION - A. 1. Define an indifference curve. 1

ECONOMICS. Time allowed : 3 hours Maximum Marks : 100 QUESTION PAPER CODE 58/1/1 SECTION - A. 1. Define an indifference curve. 1 ECONOMICS Time allowed : 3 hours Maximum Marks : 100 General Instructions: (i) (ii) (iii) (iv) (v) (vi) All questions in both the sections are compulsory. Marks for questions are indicated against each.