How many questions are in this CBSE 12 Economics Question Paper-2016 Set-2 practice test?

This CBSE 12 Economics Question Paper-2016 Set-2 practice test contains 30 carefully selected questions covering all important topics.

What is the time duration for this practice test?

You have 30 minutes to complete this practice test, which matches the actual exam timing.

Is there negative marking in this practice test?

Yes, this practice test follows negative marking scheme similar to the actual exam with 0.25 marks deducted for wrong answers.

Will I get detailed solutions after completing the test?

Yes, you will receive detailed explanations and solutions for all questions immediately after submitting your test.

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Practice Tests
CBSE 12 Economics Question Paper-2016 Set-2

CBSE 12 Economics Question Paper-2016 Set-2

This mock test includes actual CBSE Class 12 Economics board exam questions from the year 2016 set 3, helping students understand exam trends and practice real paper format

Author: Pavan

Duration

30 minutes

Total Questions

Marking

Negative Marking

Test Questions

There is an inverse relation between price and demand for the product of a firm under:

A. Monopoly only B. Monopolistic competition only C. Both under monopoly and monopolistic competition D. Perfect competition only

'Homogenous products' is a characteristic of:

A. Perfect competition only B. Perfect oligopoly only C. Both (a) and (b) D. None of the above

Suppose total revenue is rising at a constant rate as more and more units of a commodity are sold, marginal revenue would be:

A. Greater than average revenue B. Equal to average revenue C. Less than average revenue D. Rising

When does ‘increase’ in supply take place?

A. When price increases B. When price decreases C. When quantity supplied increases D. When there is no change in price

What is the relation between marginal cost and average cost when average cost is constant?

A. Marginal cost equals average cost B. Marginal cost is greater than average cost C. Marginal cost is less than average cost D. No relation

What is maximum price ceiling? Explain its implications.

A. The highest legal price at which a commodity can be sold B. The price at which demand exceeds supply C. The price that results in a surplus of goods D. The price at which a firm makes the maximum profit

A consumer consumes only two goods X and Y. If marginal utilities of X and Y are 4 and 5 respectively, and if price of X is Rs. 5 per unit and that of Y is Rs. 4 per unit, is the consumer in equilibrium? What will be further reaction of the consumer? Explain.

A. The consumer is in equilibrium and will not change consumption B. The consumer will buy more of X and less of Y C. The consumer will buy more of Y and less of X D. The consumer will buy equal amounts of X and Y

Price elasticity of demand of good X is −2 and of good Y is −3. Which of the two goods is more price elastic and why?

A. Good X is more price elastic because its elasticity is greater B. Good Y is more price elastic because its elasticity is greater C. Both goods are equally price elastic D. Price elasticity is irrelevant for both goods

Price elasticity of supply of a good is 2. A producer supplies 100 units of a good at a price of Rs. 20 per unit. At what price will he supply 80 units?

A. Rs. 25 B. Rs. 22 C. Rs. 18 D. Rs. 30

What are revenue receipts in a government budget?

A. Receipts from taxes, grants, and borrowings B. Income from non-tax sources C. Income generated from government investments D. Non-recurrent income of the government

Define stocks.

A. The total value of all financial assets in an economy B. The ownership certificates of a company C. The total supply of goods and services in an economy D. The total amount of money held by a government

Suppose marginal propensity to consume is 0.8. How much increase in investment is required to increase national income by Rs. 2000 crore?

A. Rs. 1000 crore B. Rs. 2500 crore C. Rs. 4000 crore D. Rs. 1600 crore

What is maximum price ceiling? Explain its implications.

Explain the effects of change in income on demand for a good.

A. Income increase leads to an increase in demand B. Income increase leads to a decrease in demand C. Income change does not affect demand D. Income increase leads to no change in demand

What is the relationship between marginal cost and average cost when average cost is constant?

A. Marginal cost equals average cost B. Marginal cost is greater than average cost C. Marginal cost is less than average cost D. No relationship

Foreign exchange transactions dependent on other foreign exchange transactions are called:

A. Current account transactions B. Capital account transactions C. Autonomous transactions D. Accommodating transaction

Fiscal deficit equals:

A. Interest payments B. Borrowings C. Interest payments less borrowings D. Borrowings less interest payments

Depreciation of fixed capital assets refers to:

A. Normal wear and tear B. Foreseen obsolescence C. Normal wear and tear and foreseen obsolescence D. Unforeseen obsolescence

What is the relation between marginal cost and average cost when average cost is constant?

A. Marginal cost equals average cost B. Marginal cost is greater than average cost C. Marginal cost is less than average cost D. No relationship

Explain the conditions of consumer’s equilibrium using indifference curve analysis.

A. Equal marginal utility per unit of expenditure on each good B. The consumer spends all income on one good C. The consumer maximizes utility by consuming equally D. The consumer chooses goods based on market prices

Explain the role of taxation in reducing excess demand.

A. Taxation reduces disposable income and thus reduces demand B. Taxation increases government spending and boosts demand C. Taxation has no effect on demand D. Taxation increases consumer income and demand

What is government budget? Explain how taxes and subsidies can be used to influence allocation of resources.

A. A government budget allocates resources through taxation and subsidies B. A government budget determines the fiscal policy of the government C. A government budget has no impact on resource allocation D. A government budget controls inflation through monetary policy

Explain how ‘bank rate’ is helpful in controlling credit creation.

A. It controls the interest rates charged by commercial banks B. It determines the amount of credit in circulation C. It influences the amount of money in circulation D. It impacts the reserve requirements of banks

Government incurs expenditure to popularize yoga among the masses. Analyze its impact on gross domestic product and welfare of the people.

A. It boosts GDP by increasing consumer spending and productivity B. It has no effect on GDP but improves overall welfare C. It reduces GDP by diverting resources from other sectors D. It negatively impacts GDP but improves health and welfare

Explain the ‘store of value’ function of money. How has it solved the related problem created by barter?

A. Money stores purchasing power over time, unlike barter which cannot preserve value B. Money helps in the exchange of goods in a barter system C. Money increases the value of goods in a barter system D. Money is used to store goods in the barter system

Explain the ‘unit of account’ function of money. How has it solved the related problem created by barter?

A. Money provides a common measure of value, unlike barter where each good is valued differently B. Money is used to set prices for goods in a barter system C. Money helps in valuing goods based on their production cost D. Money is used to quantify goods in a barter system

Find net domestic product at factor cost and personal income (Rs. crores).

A. Use the provided formula to calculate NDP at factor cost and personal income B. NDP can be calculated by adding net exports to GDP C. Personal income is equal to national income minus corporate tax D. Net domestic product is equal to gross domestic product minus depreciation

In which sub-account and on which side of the balance of payments account will foreign investments in India be recorded? Give reasons.

A. Under the capital account, on the credit side B. Under the current account, on the debit side C. Under the financial account, on the credit side D. Under the capital account, on the debit side

Explain the components of consumption function. Derive saving function from consumption function.

A. Consumption function includes autonomous consumption and marginal propensity to consume B. Saving function is derived by subtracting consumption from total income C. The components of consumption include savings and investment D. Consumption function is based on disposable income

What is government budget? Explain how taxes and subsidies can be used to influence allocation of resources.

A. A government budget allocates resources by setting tax rates and distributing subsidies B. A government budget controls inflation by adjusting interest rates C. Government budget has no influence on resource allocation D. Government budget regulates the supply of money in the economy

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CBSE 12 Economics Question Paper-2016 Set-2

Test Questions