Maharashtra State Board – Standard XII

1. The branch of economics that deals with the allocation of resources:
   a) Micro economics    b) Macro economics    c) Econometrics    d) None of these
   Options: 1) a, b and c    2) a and b    3) only a    4) None of these
2. Concepts studied under Micro economics:
   a) National income    b) General price level    c) Factor pricing    d) Product pricing
   Options: 1) b and c    2) b, c and d    3) a, b and c    4) c and d
3. Method adopted in micro economic analysis:
   a) Lumping method    b) Aggregative method    c) Slicing method    d) Inclusive method
   Options: 1) a, c and d    2) a, b and d    3) only c    4) only a
4. Concepts studied under Macro economics:
   a) Whole economy    b) Economic development    c) Aggregate supply    d) Product pricing
   Options: 1) a, b and c    2) b, c and d    3) only d    4) a, b, c and d

5. In the law of diminishing marginal utility, Alfred Marshall assumes that marginal utility of money:
   a) increases    b) remains constant    c) decreases    d) rises and then falls
6. As per the law of diminishing marginal utility, measurement of utility is assumed to be:
   a) ordinal    b) cardinal    c) both ordinal and cardinal    d) none of the above
7. MU of the commodity becomes negative when TU of a commodity is:
   a) rising    b) constant    c) falling    d) zero
8. Point of Satiety means:
   a) TU is rising and MU is falling    b) TU is falling and MU is negative    c) TU is maximum and MU is zero    d) MU is falling and TU is rising
9. When MU is falling, TU is:
   a) rising    b) falling    c) not changing    d) maximum

10. The relationship between demand for a good and price of its substitute is:
    a) direct    b) inverse    c) no effect    d) can be direct and inverse
11. The relationship between income and demand for inferior goods is:
    a) direct    b) inverse    c) no effect    d) can be direct and inverse
12. Symbolically, the functional relationship between Demand and Price can be expressed as:
    a) Dx = f(Px)    b) Dx = f(Pz)    c) Dx = f(y)    d) Dx = f(T)
13. When less units are demanded at high price it shows:
    a) increase in demand    b) expansion of demand    c) decrease in demand    d) contraction in demand

14. Price elasticity of demand on a linear demand curve at the X-axis is:
    a) zero    b) one    c) infinity    d) less than one
15. Price elasticity of demand on a linear demand curve at the Y-axis is equal to:
    a) zero    b) one    c) infinity    d) greater than one
16. Demand curve is parallel to X axis, in case of:
    a) perfectly elastic demand    b) perfectly inelastic demand    c) relatively elastic demand    d) relatively inelastic demand
17. When percentage change in quantity demanded is more than the percentage change in price, the demand curve is:
    a) flatter    b) steeper    c) rectangular    d) horizontal
18. Ed = 0 in case of:
    a) luxuries    b) normal goods    c) necessities    d) comforts

19. When supply curve is upward sloping, its slope is:
    a) positive    b) negative    c) first positive then negative    d) zero
20. An upward movement along the same supply curve shows:
    a) contraction of supply    b) decrease in supply    c) expansion of supply    d) increase in supply
21. A rightward shift in supply curve shows:
    a) contraction of supply    b) decrease in supply    c) expansion of supply    d) increase in supply
22. Other factors remaining constant, when less quantity is supplied only due to a fall in price, it shows:
    a) contraction of supply    b) decrease in supply    c) expansion of supply    d) increase in supply
23. Net addition made to the total revenue by selling an extra unit of a commodity is:
    a) total Revenue    b) Marginal Revenue    c) average Revenue    d) marginal Cost

24. In economic sense, market includes following activities:
    a) The place where goods are sold and purchased
    b) An arrangement through which buyers and sellers come in contact directly or indirectly
    c) A shop where goods are sold
    d) All of the above
25. Classification of markets on the basis of place:
    a) Local market, National market, International market
    b) Very short period market, Local market, National market
    c) Short period market, National market, International market
    d) Local market, National market, Short period market
26. Homogeneous product is a feature of this market:
    a) Monopoly    b) Monopolistic competition    c) Perfect competition    d) Oligopoly
    Options: 1) c and d    2) a, b and c    3) a, c and d    4) only c
27. Under Perfect competition, sellers are:
    a) Price makers    b) Price takers    c) Price discriminators    d) None of these
    Options: 1) a, b and c    2) only b    3) only c    4) a and c

28. Statements that are incorrect in relation to index numbers:
    a) Index number is a geographical tool    b) Index numbers measure changes in the air pressure
    c) Index numbers measure relative changes in economic variable    d) Index numbers are specialized averages
    Options: 1) c and d    2) a and b    3) b and c    4) a and d
29. Statements that highlight the significance of index numbers:
    a) Index numbers are useful for making future predictions    b) Index numbers help in measurement of inflation
    c) Index numbers help to frame suitable policies    d) Index numbers can be misused
    Options: 1) b, c and d    2) a, c and d    3) a, b and d    4) a, b and c
30. Statements that apply to weighted index numbers:
    a) Every commodity is given equal importance    b) It assigns suitable 'weights' to various commodities
    c) Quantities are used as weights    d) Laspeyres's and Paasche's methods are used
    Options: 1) b, c and d    2) a, c and d    3) a, b and d    4) a, b and c
31. Statements related to limitations of index numbers:
    a) Index numbers are not completely reliable    b) Bias in data collected
    c) Every formula has defects    d) Ignores quality changes
    Options: 1) a, c and d    2) a, b, c and d    3) a, b and d    4) b, c and d

32. While estimating national income, we include only value of final goods and services in order to:
    a) make computation easier    b) avoid double counting    c) maximize national welfare    d) evaluate performance
33. NDP is obtained by:
    a) deducting depreciation from GNP    b) deducting depreciation from GDP    c) including depreciation in GDP    d) including depreciation in GNP
34. In India, national income is estimated using:
    a) output method    b) income method    c) expenditure method    d) combination of output and income method

35. Optional functions of Government:
    a) Protection from external attack    b) Provision of education & health services
    c) Provision of social security measures    d) Collection of tax
    Options: 1) b and c    2) a, b and c    3) b, c and d    4) All of the above
36. Obligatory functions of the Government:
    a) Provision of employment    b) Maintaining internal law and order
    c) Welfare measures    d) Exporting goods and services
    Options: 1) c and d    2) a and b    3) only b    4) a, c and d
37. Public finance is on the borderline between economics and politics... is the view of:
    a) Adam Smith    b) Alfred Marshall    c) Prof. Hugh Dalton    d) Prof. Findlay Shirras
    Options: 1) only a    2) only b    3) only c    4) only d
38. Non-tax sources of revenue:
    a) Direct and Indirect Tax    b) Direct Tax and Fees    c) Fees    d) Special Levy
    Options: 1) b and c    2) a and c    3) a, b, c and d    4) c and d
39. Trends shown by Public expenditure of any Government:
    a) Constant    b) Increasing    c) Decreasing    d) Fluctuating
    Options: 1) only a    2) only b    3) only c    4) only d

40. Development financial institutions were established to:
    a) provide short term funds    b) develop key sectors    c) regulate money market    d) regulate capital market
41. Money market faces shortage of funds due to:
    a) inadequate savings    b) growing demand for cash    c) unorganized sector    d) financial mismanagement
42. Individual investors lost confidence in capital market due to:
    a) lack of instruments    b) high transaction costs    c) low returns    d) financial scams
43. Commercial banks act as intermediaries in the financial system to:
    a) make profits    b) accelerate economic growth    c) mobilise savings & allocate funds    d) control credit

44. Types of foreign trade:
    a) Import trade    b) Export trade    c) Entrepot trade    d) Internal trade
    Options: 1) a and b    2) a, b and c    3) a, b, c and d    4) None of these
45. Export trends of India's foreign trade includes:
    a) Engineering goods    b) Gems and Jewellery    c) Readymade garments    d) Gold
    Options: 1) a and c    2) a, b and c    3) b, c and d    4) None of these
46. Role of foreign trade is:
    a) To earn foreign exchange    b) To encourage investment    c) Division of labour    d) Change composition
    Options: 1) a and b    2) a, b and c    3) b and d    4) None of these

1. Micro economics : Slicing method :: Macro economics : ____________
2. Micro economics : Tree :: Macro economics : ____________
3. Macro economic theory : Income and employment :: Micro economics : ____________
4. Makros : Macro economics :: Mikros : ____________
5. General equilibrium : Macro economics :: ____________ : Micro economics
6. Perfectly elastic demand : Ed = ∞ :: ____________ : Ed = 0
7. Rectangular hyperbola : ____________ :: Steeper demand curve : Relatively inelastic demand
8. Straight line demand curve : Linear demand curve :: ____________ : Non-linear demand curve
9. Pen and ink : ____________ :: Tea or Coffee : Substitutes
10. Ratio method : Ed = (%ΔQ / %ΔP) :: ____________ : Ed = Lower segment / Upper segment
11. Expansion of supply : Price rises :: Contraction of supply : ____________
12. Total revenue : ____________ :: Average revenue : TR / TQ
13. Total cost : TFC + TVC :: Average cost : ____________
14. Demand curve : ____________ :: Supply curve : Upward
15. ____________ : Change in supply :: Other factors constant : Variation of supply
16. Perfect competition : Free entry and exit :: ____________ : Barriers to entry
17. Price taker : ____________ :: Price maker : Monopoly
18. Single price : Perfect competition :: Discriminated prices : ____________
19. Price Index : Inflation :: ____________ : Agricultural production
20. ____________ : Base year prices :: P₁ : Current year prices
21. Laspeyres's index : ____________ :: Paasche's index : Current year quantities
22. ____________ : Single variable :: Composite index : Group of variables
23. ____________ : C + I + G + (X - M) :: GNP : C + I + G + (X - M) + (R - P)
24. Output method : ____________ :: Income method : Factor cost method
25. Theoretical difficulty : Transfer payments :: ____________ : Valuation of Inventories
26. Money market : Short term funds :: ____________ : Long term funds
27. ____________ : Central Bank :: SBI : Commercial Bank
28. Co-operative banks : Organized sector :: Indigenous bankers : ____________
29. Primary market : ____________ :: Secondary market : Old issues

1. A situation where more quantity is demanded at lower price.
2. Graphical representation of demand schedule.
3. A commodity which can be put to several uses.
4. More quantity is demanded due to changes in factors determining demand other than price.
5. A desire backed by willingness to purchase and ability to pay.
6. Degree of responsiveness of quantity demanded to change in income only.
7. Degree of responsiveness of quantity demanded of one commodity to price of another commodity.
8. Degree of responsiveness of quantity demanded of a good to a change in its price.
9. Elasticity resulting from infinite change in quantity demanded.
10. Elasticity resulting from a proportionate change in quantity demanded due to proportionate change in price.
11. Cost incurred on fixed factor.
12. Cost incurred per unit of output.
13. Net addition made to total cost of production.
14. Revenue per unit of output sold.
15. The market where there are few sellers.
16. The point where demand and supply curve intersect.
17. The cost incurred by the firm to promote sales.
18. Number of firms producing identical product.
19. Charging different prices to different consumers for the same product or service.

1. Selling cost : Free gifts, Advertisement hoardings, Window displays, Patents.
2. Market structure on basis of competition : Monopoly, Oligopoly, Very Short Period market, Perfect competition.
3. Features of monopoly : Price maker, Entry barriers, Many sellers, Lack of substitutes.
4. Legal monopoly : Patent, OPEC, Copyright, Trademark.
5. Types of Bank Accounts : Saving a/c, Demat a/c, Recurring a/c, Current a/c.
6. Unregulated Financial Intermediaries : Mutual fund, Nidhi, Chit fund, Loan Companies.
7. Financial Assets : Bonds, Land, Govt. Securities, Derivatives.
8. Quantitative Tools : Bank rate, Open market operations, Foreign Exchange rate, Variable reserve ratios.

1. Assertion (A): Elasticity of demand explains that one variable is influenced by another.
   Reasoning (R): Elasticity indicates effect of price and other factors on demand.
2. Assertion (A): Change in quantity demanded of one commodity due to price change of another is cross elasticity.
   Reasoning (R): Changes in consumer income lead to change in quantity demanded.
3. Assertion (A): Degree of price elasticity is less than one in relatively inelastic demand.
   Reasoning (R): Change in demand is less than the change in price.
4. Assertion (A): Money market economizes use of cash.
   Reasoning (R): Money market deals with instruments that are close substitutes of money.
5. Assertion (A): Regional stock exchanges witnessed sharp decline in trade volume.
   Reasoning (R): Investors prefer premier exchanges like BSE, NSE.
6. Assertion (A): Unorganized money market sector lacks transparency.
   Reasoning (R): Activities are largely confined to rural areas.
7. Assertion (A): Foreign exchange management is undertaken by commercial banks.
   Reasoning (R): RBI has to maintain official exchange rate stability.

1. Gouri collected information about the income of a particular firm.
2. Ramesh decided to take all decisions related to production, such as what and how to produce?
3. Shubana paid wages to workers in her factory and interest on her bank loan.
4. Salma purchased sweater for her father in winter season.
5. Nilesh purchased ornaments for his sister.
6. Kavita consumed five units of oranges one after the other.
7. Bhushan refused to eat fifth chapati after eating four chapatis.
8. Lalita satisfied her want of writing an essay by using pen and notebook.
9. Vrinda receives monthly pension of Rs.5,000/- from the State Government.
10. Viru kept aside 100 kgs out of 500 kgs of wheat produced for his family.
11. Sheetal purchased wheat flour for her bakery from the flour mill.
12. Shobha collected data regarding total money value of final goods & services produced in 2018-19.
13. Rajendra has total stock of 500 gel pens including 200 pens produced in previous year.
14. Raghu's father regularly invests his money in stocks and bonds.
15. Sara contributes monthly to a fund created by friends, awarded by lucky draw.
16. Tinu deposited a lumpsum amount of ₹ 50,000 in bank for one year.
17. ABC bank provides demat, safe deposit lockers, and internet banking facilities.
18. India purchased petroleum from Iran.
19. Maharashtra purchased wheat from Punjab.
20. England imported cotton from India, manufactured garments, and sold them to Malaysia.
21. Japan sells smart phones to Myanmar.

1. Utility Schedule:

• a) Draw total utility curve and marginal utility curve.
• b) When total utility is maximum, marginal utility is ___________.
• c) When total utility falls, marginal utility becomes ___________.

2. Market Demand Schedule:

• a) Complete the market demand schedule above.
• b) Draw market demand curve based on the schedule.

3. Supply Schedule of Chocolates:

• a) Complete the supply schedule assuming linear supply.
• b) Draw a diagram and state the relationship between price and supply.

4. Equilibrium Price Table:

• a) Fill in the missing schedule blanks.
• b) Derive equilibrium price using a diagram.

5. Direction of India's Imports Table:

• a) Which organisation had the least share in India's imports in 2015-16?
• b) Which organisation had maximum share in 1990-91?
• c) Expand abbreviations: OECD and OPEC.
• d) State percentage increase in imports from developing nations between 1990-91 and 2015-16.

1. Degrees of Price Elasticity: Draw 4 separate demand curves:
   • Diagram A: Vertical curve parallel to Y-axis.
   • Diagram B: Horizontal curve parallel to X-axis.
   • Diagram C: Steeper demand curve.
   • Diagram D: Flatter demand curve.
   Task: State the degree of elasticity represented by each curve ($E_d = 0$, $E_d = \infty$, $E_d < 1$, $E_d > 1$).
2. Point / Geometric Method: Draw a straight line demand curve $AE$ touching both axes (Point $A$ on Y-axis, $B$, midpoint $C$, $D$, and $E$ on X-axis). Answer True/False with reasons:
   • a) Demand at point 'C' is relatively elastic demand.
   • b) Demand at point 'B' is unitary elastic demand.
   • c) Demand at point 'D' is perfectly inelastic demand.
   • d) Demand at point 'A' is perfectly elastic demand.

1. State the conventional notion of social security mentioned in the passage.
2. What conceptual change is suggested regarding social security?
3. Why is the "write-a-cheque" model ill-suited for India?

1. Micro Economics and Macro Economics.
2. Relatively elastic demand and Relatively inelastic demand.
3. Perfectly elastic demand and Perfectly inelastic demand.
4. Expansion of demand and Contraction of demand.
5. Increase in demand and Decrease in demand.
6. Stock and Supply.
7. Average Revenue and Average Cost.
8. Simple Index Numbers and Weighted Index Numbers.
9. Price Index and Quantity Index.
10. Laspeyres's Index and Paasche's Index.
11. Public Finance and Private Finance.
12. Direct Tax and Indirect Tax.
13. Money Market and Capital Market.
14. Internal Trade and International Trade.

1. Explain features of Micro economics.
2. Explain scope of Macro economics.
3. State and explain law of diminishing marginal utility with exceptions.
4. Explain factors influencing elasticity of demand.
5. Explain determinants of supply.
6. Explain features of Oligopoly.
7. Explain features of index numbers.
8. Explain two sector model of circular flow of national income.
9. Explain non-tax sources of Government revenue.
10. Explain functions of Commercial Banks.

1. Scope of micro economics is unlimited.
2. Macro economics deals with individual behaviour.
3. Demand curve slopes downward from left to right.
4. Price is the only determinant of demand.
5. Index numbers measure changes in price level only.
6. There are many theoretical difficulties in measurement of national income.
7. Obligatory function is the only function of Government.
8. Public finance is more elastic than private finance.
9. Trade is an engine of growth for an economy.

1. State and explain the law of demand with exceptions.
2. State and explain the law of supply with exceptions.
3. Explain the meaning and features of Perfect Competition.
4. Explain practical difficulties involved in measuring national income.
5. Explain the role of money market in India and functions of RBI.
6. Explain meaning and role of foreign trade along with recent trends in India's exports.