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Economics XII D, E

Ms Rekha Rajan, PGT (Economics)

Date of submission: 23 June 2014


Q1. Production of an economy is below its potential due to unemployment.Govt. starts employment generation programmes.Explain its effect using PPC.

Q2. One of the central problems of an economy is how to produce. The planners of Indian economy are stressing on using labour intensive technique for production of goods and services. Do you justify this on the grounds of moral responsibility?

Q3. On the basis of the given diagram, answer the following questions.

X-axis-No: of units of rice

Y-axis-No: of units of aeroplanes


(i)On the PPC AE, if the economy decides to produce 100 tons of rice, then how many planes it can produce?

(ii)If there is growth in resources, what will happen to the PPC AE ?

(iii)Which point in the PPC represent underutilisation of resources ?

(iv)Identify the points at which the economy will operate if the resources are fully used?

Q4. Massive unemployment shifts PPC to the left. Defend or refute.

Q5. Identify the following as microeconomic study and macroeconomic study.

1.Production of sugar milk

2.Inflation rate

3.Car industry

4.Supply of maoney

5.Wage determination in a company

6.Allocation of resources

7.Household expenditure.

8.Aggregate demand

9.Foreign exchange rate

10.Market demand for apples

Q6.An economy always produces on but not inside the PPC. Defend or refute.

Q7.A lot of people died in the 2013 landslide in Uttarakhand.Many factories and tourist places were destroyed.How will it affect the PPC of the economy?

Q8.Pradeesh is working at a salary of Rs.45,000 per month. He receives 2 job offers-

(i)To work as an accountant at a salary of Rs.30,000 per month.

(ii)To work as a sales manager at a salary of Rs.25,000 per month.

What is the opportunity cost here?

Q9.Answer the following with the help of the diagram.


Which of the following represents:

(i)Underutilisation of resources

(ii)efficient utilisation of resources

(iii)unattainable combination of resources

(iv)use of labour intensive technology

Q10.A person’s utility schedule is given below. Derive Marginal Utility.

Units TU

0 0

1 10

2 25

3 38

4 48

5 55

Q11.A person’s marginal utility schedule is given below. Derive Total utility.

Units MU

1 10

2 8

3 6

4 2

5 0

6 -1

Q12. Calculate missing figures.

Units MU TU

1 —- 16

2 12 —-

3 8 —-

4 6 —-

5 —- 40

Q13. TU remains same. Whether MU is positive or negative. Defend or refute.

Q14. Explain the relatioship between TU and MU with the help of an imaginary schedule.


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