Students must start practicing the questions from CBSE Sample Papers for Class 11 Economics with Solutions Set 8 are designed as per the revised syllabus.
CBSE Sample Papers for Class 11 Economics Set 8 with Solutions
Time Allowed : 3 hours
Maximum Marks : 80
General Instructions:
- All questions are compulsory.
- Marks for questions are indicated against each question.
- Q. No. 1 to 10 and 18 to 27 are Objective Type Questions / Multiple Choice Questions carrying 1 mark each.
- Q. No. 11 to 12 and 28 to 29 are Short Answer Type Questions I carrying 3 marks each.
- Q. No. 13 to 15 and 30 to 32 are Short Answer Type Questions II carrying 4 marks each.
- Q. No. 16 to 17 and 33 to 34 are Long Answer Type Questions carrying 6 marks each.
Section – A
Question 1.
Which of the following statements is false?
(A) Statistics deals with only quantitative data
(B) Statistics solves economic problems
(C) Statistics deals with qualitative data
(D) Statistics does not study individual units.
Answer:
Option (C) is correct.
Explanation: Statistics cannot deal with qualitative data as they cannot be expressed in terms of numbers or cannot be quantified.
Question 2.
There are ___________ degrees in a complete pie chat.
(A) 280
(B) 360
(C) 275
(D) 180
Answer:
Option (B) is the correct.
Explanation:
As a Pie Chart is a full circle so it has 360 °.
Question 3.
The slope of a more than frequency curve is
(A) Upward rising
(B) Downward sloping
(C) U-Shaped
(D) S-Shaped
Answer:
Option (A) is correct.
Question 4.
What should be taken into consideration in the graphical presentation of statistical data?
(A) Appropriate title
(B) Scale
(C) False base line
(D) All of the above
Answer:
Option (D) is correct.
Question 5.
Identify the correctly matched examples from Column I to that of Column II:
| Column 1 | Column II |
| A. Drawing of one bar | 1. Ogive |
| B. Drawing of two bars | 2. Table |
| C. Drawing of a segmented circle | 3. Pie Chart |
| D. Drawing of lines | 4. Histogram |
(A) A -1
(B) B – 2
(C) C – 3
(D) D – 4
OR
Identify the correct sequence of alternatives given in Column II to that of Column I:
| Column I | Column II |
| A. Graphic presentation | 1. More than frequency curve |
| B. Negative slope | 2. Total angle at the centre of a pie chart |
| C. Time series graph | 3. Mathematical graphs |
| D. 360° | 4. Histogram |
(A) 3,1,4,2
(B) 4, 2, 1, 3
(C) 2,1,3,4
(D) 1, 3, 4, 2
Answer:
Option (C) is correct
OR
Option (A) is correct
Question 6.
Average value of given variable is known as:
(A) Median
(B) Mean
(C) Mode
(D) Index
Answer:
Option (B) is correct.
Explanation:
Arithmetic Average or mean of series of items is obtained by adding values of the items and dividing by the number of item.
Read the extract given below and answer questions 7 to 10 that follows:
Index numbers are intended to measure the degree of economic changes over time. These numbers are values stated as a percentage of a single base figure. Index numbers are important in economic statistics. In simple terms, an index (or index number) is a number displaying the level of a variable relative to its level (set equal to 100) in a given base period. Index numbers are intended to study the change in the effects of such factors which cannot be measured directly. Bowley stated that “Index numbers are used to gauge the changes in some quantity which we cannot observe directly”. It can be explained through example in which changes in business activity in a nation are not capable of direct measurement but it is possible to study relative changes in business activity by studying the variations in the values of some such factors which affect business activity, and which are proficient of direct measurement.
Index numbers are usually applied in statistical device to measure the combined fluctuations in a group related variables. If statistician or researcher wants to compare the price level of consumer items today with that predominant ten years ago, they are not interested in comparing the prices of only one item, but in comparing some sort of average price levels (Srivastava, 1989). With the support of index numbers, the average price of several articles in one year may be compared with the average price of the same quantity of the same articles in a number of different years. There are several sources of ‘official’ statistics that contain index numbers for quantities such as food prices, clothing prices, housing, and wages. Index numbers may be categorized in terms of the variables that they are planned to measure. In business, different groups of variables in the measurement of which index number techniques are normally used are price, quantity, value, and business activity.
Types of Index Numbers
- Simple Index Number: A simple index number is a number that measures a relative change in a single variable with respect to a base. These type of index numbers are constructed from a single item only.
- Composite Index Number: A composite index number is a number that measures an average relative change in a group of relative variables with respect to a base. A composite index number is built from changes in a number of different items.
- Price index Numbers: Price index numbers measure the relative changes in prices of a commodity between two periods. Prices can be either retail or wholesale. Price index number are useful to comprehend and interpret varying economic and business conditions over time.
- Quantity Index Numbers: These types of index numbers are considered to measure changes in the physical quantity of goods produced, consumed or sold of an item or a group of items.
Question 7.
What is the main purpose of index number?
(A) To measure change
(B) To measure deviation
(C) To measure the relation
(D) None of the .above
Answer:
Option (A) is correct.
Explanation:
As per the article, “Index numbers are intended to measure the degree of economic changes over time. These numbers are values stated as a percentage of a single base figure. Index numbers are important in economic statistics. In simple terms, an index (or index number) is a number displaying the level of a variable relative to its level (set equal to 100) in a given base period.”
Question 8.
Read the following statements 1 and 2 and choose the correct alternative: Statement 1: Index Number can be used for combined data.
Statement 2: Index Number can be used to measure combined fluctuations.
(A) Both Statement 1 and 2 are true
(B) Both Statement 1 and 2 are false
(C) Only Statement 1 is true
(D) Only Statement 2 is true
Answer:
Option (D) is correct.
Explanation:
Index numbers are usually applied in statistical device to measure the combined fluctuations in a group related variables.
Question 9.
Which among the following can be used to measure the index number?
(A) Price
(B) Quantity
(C) Both (A) and (B)
(D) Neither (A) and (B)
Answer:
Option (C) is correct.
Question 10.
What can you measure with the help of Price Index?
(A) Inflation
(B) Demand
(C) Supply
(D) None of the above
Answer:
Option (A) is correct.
Explanation:
Consumer Price Index or Wholesale Price Index can be used to measure the inflation.
Question 11.
Why we need Index Numbers?
Answer:
Utility of Index Numbers are:
(i) It makes comparative study easy,
(ii) It makes easy the difficult facts,
(iii) Helpful in measuring irregular changes,
(iv) It studies the changes in general price level, and
(v) Measurement of purchasing power of money.
Question 12.
Compute Coefficient of Correlation from the following data:
| X-series | Y-series | |
| Mean | 15 | 28 |
| Sum of squares of Devation from Mean | 144 | 225 |
Sum of products of deviation of X and Y-series from their respective mean is 20. Number of pairs of observations is 10. [3]
OR
Calculate the Correlation coefficient between X and Y and comment on their relationship: [3]
Answer:
Given, Σx2 = 144, Σy2 = 225, Σxy = 20, N = 10
Question 13.
In a trip organised by a college, there were 80 people, each of whom paid ₹ 15.50 on an average. There were 60 students, each of whom paid ₹ 16. Members of teaching staff were charged at a higher rate. The number of servants (all males) were six and they were not charged anything. The number of ladies were 20% of the total and there was only one lady staff member. Prepare the tabular information. [4]
OR
From the following frequency distribution, prepare the less than ogive: [4]
| Capital (₹ in lakh) | Number of Companies |
| 0-10 | 2 |
| 10-20 | 3 |
| 20-30 | 7 |
| 30-40 | 11 |
| 40-50 | 15 |
| 50-60 | 7 |
| 60-70 | 2 |
| 70-80 | 3 |
Answer:
First of all the data should be divided into various classes such as students, teaching staff and servants and after that total contribution should be calculated.
Total contribution = 80 × ₹ 15.50 = ₹ 1,240.00
The given information is tabulated below:
OR
As per the question, data of capital and number of companies are given. For less than ogive, we will have to prepare cumulative frequency distribution. The less than ogive of given frequency distribution is shown below:
| Capital (₹ in lakhs) | Number of Companies |
| below 10 | 2 |
| below 20 | 5 |
| below 30 | 12 |
| below 40 | 23 |
| below 50 | 38 |
| below 60 | 45 |
| below 70 | 47 |
| below 80 | 50 |
Question 14.
Two distributions with 100 and 200 items have a mean of 20 and 10. Find the combined Mean of two distributions. [4]
Answer:
Total value of Distribution 1 = 100 × 20 = 2,000
Total value of Distribution 2 = 200 × 10 = 2,000
Question 15.
Calculate mode from the following data: [4]
| Size | Frequency |
| 0-5 | 3 |
| 5-10 | 9 |
| 10-15 | 15 |
| 15-20 | 23 |
| 20-25 | 30 |
| 25-30 | 20 |
Answer:
| Size | Frequency (f) | c.f. |
| 0 – 5 | 3 | 3 |
| 5 – 10 | 9 | 12 |
| 10 – 15 | 15 | 27 |
| 15 – 20 | 23 | 50 |
| 20 – 25 | 30 | 80 |
| 25 – 30 | 20 | 100 |
Question 16.
Calculate the value of Median, first quartile (Q1), and third quartile (Q3) for the following data:
| Marks | Number of Students |
| 30-35 | 14 |
| 35-40 | 16 |
| 40-45 | 18 |
| 45-50 | 23 |
| 50-55 | 18 |
| 55-60 | 8 |
| 60-65 | 3 |
Answer:
| Marks | Number of Students (f) | Cumulative Frequency (c.f.) |
| 30 – 35 | 14 | 14 |
| 35 – 40 | 16 | 30 |
| 40 – 45 | 18 | 48 |
| 45 – 50 | 23 | 71 |
| 50 – 55 | 18 | 89 |
| 55 – 60 | 8 | 97 |
| 60 – 65 | 3 | 100 |
Median = M = Size of \(\left(\frac{N}{2}\right)^{\text {th }}\) item
= Size of \(\left(\frac{100}{2}\right)^{\text {th }}\) item
= Size of 50th item
which lies in 45-50 group
By Interpolation:
M = l1 + \(\frac{l_2-l_1}{f}\)(m -c)
M = 45 + \(\frac{50-45}{23}\)(50-48)
M = 45 + \(\frac{5}{23}\)(2)
M = 45 + \(\frac{10}{23}(\)
M = 45 + 0.43
M = 45.43
Lower Quartile = Q1 = Size of \(\left(\frac{N}{4}\right)^{\text {th }}\) item
= Size of \(\left(\frac{100}{4}\right)^{\text {th }}\) item
= Size of 25th item
which lies in 35-40 group
By Interpolation
Q1 = l1 + \(\frac{l_2-l_1}{f}\) (q1 – c)
= 35 + \(\frac{40-35}{16}\)(25 – 14)
= 35 + \(\frac{5}{16}\)(11)
= 35 + 3.44 = 38.44
Upper Quartile = Q3 = Size of 3\(\left(\frac{N}{4}\right)^{\text {th }}\) item
= Size of 3\(\left(\frac{100}{4}\right)^{\text {th }}\) item
= Size of 75th item
which lies in 50-55 group
By Interpolation
Q3 = l1 + \(\frac{l_2-l_1}{f}\)(q1 – c)
= 50 + \(\frac{55-50}{18}\) (75 – 71)
= 50 + \(\frac{5}{18}\)(4)
= 50 + \(\frac{20}{18}\)
= 50 + 1.1 = 51.1
Question 17.
Five students have been assigned ranks on the basis of their ability:
Calculate rank Correlation Coefficient.
OR
Calculate Mean from the following data:
| Size | Frequency |
| 5 | 185 |
| 15 | 77 |
| 25 | 34 |
| 35 | 180 |
| 45 | 136 |
| 55 | 23 |
| 65 | 50 |
Answer:
OR
Section – B
Question 18.
According to the Law of Diminishing Marginal Utility, satisfaction obtained from consumption of each successive unit [1]
(A) Increases
(B) Decreases
(C) Remains same
(D) Either increases or decreases
OR
Which of the following influences price elasticity of demand: [1]
(A) Nature of the commodity
(B) Income level
(C) Availability of substitutes
(D) All of these
Answer:
Option (B) is correct.
OR
Option (D) is correct.
Question 19.
Which of the following is the reason for leftward shift of demand curve: [1]
(A) Rise in the price of the commodity
(B) Fall in the price of the commodity
(C) Fall in the price of substitutes
(D) Fall in the price of complements
Answer:
Option (D) is correct.
Explanation:
When the prices of the complements fall the goods become relatively cheaper and thus at the same price level more quantity will be demanded.
Question 20.
Which of these is variable cost for a firm: [1]
(A) Interest on loan
(B) Monthly rent
(C) Insurance premium
(D) Wages to employees
Answer:
Option (D) is correct.
Explanation:
Interest on loan, Monthly rent and Insurance Premium has to be paid even at 0 level of output, so they are fixed cost. Wages to employees is paid only when the firm starts the production process making it a variable cost.
Question 21.
Read the following Assertion (A) and Reason (R) and choose the correct alternative: [1]
Assertion (A): Demand for refrigerator is unitary elastic.
Reason (R): The unitary elastic demand have elasticity equal to one.
Alternatives:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Reason (R).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.
Answer:
Option (D) is correct.
Explanation:
Demand for refrigerators is relatively elastic as the fall in price will lead to a lot increase in the quantity demanded.
Question 22.
Read the following Assertion (A) and Reason (R) and choose the correct alternative: [1]
Assertion (A): The fashion prevailing in the market determines the demand for clothes.
Reason (R): Change in taste and preference is an important determinant of demand. [U]
Alternatives:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, and Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.
Answer:
Option (A) is correct.
Explanation:
Demand of clothes changes as per the change in fashion, as the change in fashion implies that there is a change in the taste of the consumer regarding that particular type of cloth irrespective of the price of the commodity.
Question 23.
Read the following Assertion (A) and Reason (R) and choose the correct option: [1]
Assertion (A): When one moves on the higher indifference curve, the satisfaction increases.
Reason (R): Higher is the indifference curve, higher is the level of satisfaction.
Alternatives:
(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, and Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true, but Reason (R) is false.
(D) Assertion (A) is false, but Reason (R) is true.
Answer:
Option (B) is correct.
Explanation:
Higher is the indifference curve, higher is the level of satisfaction, that is, when one moves to a higher indifference curve, the level of satisfaction increases. This is based on the assumption of monotonic preferences which means that greater consumption of a commodity by the consumer gives higher level of satisfaction.
Read the following passage and answer Questions 24 to 27 on the basis of the same: [1]
The responsiveness of change of the quantity supplied with respect to its price is called elasticity of supply. Elasticity can be categorised into various types with respect to the degree of elasticity. When the quantity is less responsive to the price change it is termed as inelastic and when a little change in the price changes the quantity supplied many folds, it is termed as elastic supply. If there is no change in the price with the change in the quantity supplied, it is termed as perfectly elastic supply and if the price changes irrespective of the change in supply, it is termed as perfectly inelastic supply. In case if the price and quantity supplied of the product is equal then it is unitary elastic. Thus, elasticity measures the responsiveness of the quantity and price with respect to the change in one of the factors.
Question 24.
Elasticity of ___________ (demand/supply) is the responsiveness of the change in quantity supplied to the change in price of the commodity. [1]
Answer:
Supply
Question 25.
Elasticity can be categorised into various types with respect to the ___________ (degrees/percentage) of elasticity.
Answer:
degrees
Question 26.
When the supply of the commodity is not responsive to the change in its price, it is ___________ (unitary elastic supply/perfect inelastic supply/inelastic supply).
Answer:
perfectly inelastic supply.
Question 27.
In perfectly elastic supply ___________ is not responsive to the change in ___________
(A) Supply, price
(B) Price, supply
(C) Price, cost
(D) Cost supply
Answer:
Option (B) is correct.
Question 28.
Explain the chain effects, if the prevailing market price is below the equilibrium price.
OR
(i) Why can a firm not earn abnormal profits under perfect competition in the long run? Explain.
(ii) Under which market form a firm is called a ‘price taker’ and why? [3]
Answer:
When market price is less than the equilibrium price excess demand is created, i.e., quantity demanded is more than the quantity supplied at the prevailing market price. If the prevailing market price, say OP1 is less than equilibrium price OP, then market demand of OP1 will be greater than market supply of OP2.
(i) The excess demand of Q1Q2 results in competition amongst the buyers as each buyer wants to have the commodity. It leads to increase in market price.
(ii) Increase in price results in contraction along the demand curve and expansion along the supply curve.
(iii) The market price will continue to rise till excess demand is wiped out.
Conclusion:
Eventually price will increase to a level where market demand is equal to market supply at OQ and equilibrium price of OP will be attained.
OR
(i) Under perfect competition, there is freedom of entry to firms into industry. When there are abnormal profits, new firms will enter. This will increase supply and price will fall. This process will continue till abnormal profits are wiped out.
(ii) A firm is said to be a price taker when it has no option but to accept the market determined price. It happens in a perfectly competitive market. The price in the market is determined by the industry and no individual firm has significant share in the market as to influence the price.
Question 29.
Under perfect competition, the seller is price taker, under monopoly he is the price maker. Explain. [3]
Answer:
Under perfect competition, the price is determined by the industry. It is due to the fact that there are large number of buyers and sellers of homogeneous products under perfect competition. No single seller by changing his supply can influence the price. A monopolist is the only seller and himself determines price of his product. He is a price maker. There is no challenge to his price decisions as there are no competitive firms in the market and there are no close substitutes of his product. Barriers to the entry of new firms further strengthens his position as a price maker.
Question 30.
When the price of a commodity falls by 20 percent, its demand rises from 400 to 500 units. Calculate its price elasticity of demand. [4]
Answer:
Question 31.
Calculate Marginal Cost at each level of output: [4]
| Output (Units) | Average Variable Cost (?) |
| 1 | 26 |
| 2 | 22 |
| 3 | 20 |
| 4 | 20 |
| 5 | 22 |
| 6 | 24 |
Answer:
Question 32.
Define Production Possibility Curve and explain its properties with the help of diagrams. [4]
OR
Giving reason and comment on the shape of Production Possibility Curve based on the following schedule:
Answer:
A Production Possibility Curve is the curve which shows various combinations of two goods that can be produced with the given amount of resources, assuming that technology is given and resources are efficiently and fully employed.
Characteristics:
(i) PPC slopes downwards: PPC shows all the maximum possible combinations of two goods, which can be produced with the available resources and technology. In such a case, more of one good can be produced only by taking resources away from the production of another good. As there exists an inverse relationship between changes in quantity of one commodity and change in quantity of the other commodity, PPC slopes downwards from left to right.
(ii) Production Possibility Curve is concave to origin: Production Possibility Curve is concave to the origin because to produce each additional unit of good X, more and more units of good Y are to be sacrificed. Opportunity cost of producing each additional unit of good tends to increase in terms of the loss of production of good Y. It is so because factors of production are not perfect substitute of each other.
OR
| Goods X (Units) | Goods Y (Units) |
| 0 | 30 |
| 1 | 27 |
| 2 | 21 |
| 3 | 12 |
| 4 | 0 |
It is concave in accordance with the pattern in the table. It shows that Marginal Opportunity Cost tends to rise. With every increase in the quantity of X we have to sacrifice more of Y, and Marginal Opportunity Cost tends to rise because of the Law of Diminishing Returns. Accordingly, the ratio:
\(\frac{\Delta \text { Loss of } Y}{\Delta \text { Gain of } X}\) tends to rise.
Commonly Made Error
Students are confused between PPC and Indifference curve because both are just opposite to each other.
Answering Tip
Basic concept of the curve should be clear before giving the answer.
Question 33.
Discuss the relationship between Average Product and Marginal Product with the help of a diagram. [6]
OR
‘If more variable factors are employed with fixed factors, the Total Product increases at an increasing rate and finally it falls.’ Explain the three stages of the law, with the help of TP, AP and MP curves. [6]
Answer:
The relationship between AP and MP can be explained with the help of the following diagram:
In the diagram:
(i) The AP increases when MP is greater than AP
(ii) The AP is at its maximum when both MP and AP are equal. This is shown at point E.
(iii) The AP decreases when MP in less than AP.
(iv) MP can be positive, zero or negative, but AP is always positive.
OR
Law of Variable Proportions states that as more and more of the variable factor is combined with the fixed factor, marginal product (MP) of the variable factor may initially increase and subsequently stabilise but must finally decrease.
Phase of changes in Total Product according to the Law of Variable Proportion are shown in following figure:
(i) Phase I-Increasing Returns: This stage is in between O to M on TP curve. In this stage, MP tends to rise till OM units of labour are used with the constant application of fixed factor. When MP is rising, TP tends to rise at an increasing rate. This occurs till point M on TP curve and MP curve. This is a situation of increasing returns to a factor.
(ii) Phase II-Diminishing Returns: This stage is between M to T on TP curve. Beyond OM units of labour, MP tends to decline and TP increases only at diminishing rate. This occurs between M and T on MP curve and TP curve. This is a situation of diminishing return to a factor.
(iii) Phase III-Negative Return: This stage is beyond T on TP curve. Beyond OT units of labour, MP becomes negative. Now, TP starts declining. This is a situation of negative returns to a factor.
Question 34.
A consumer, Mr. Aman is in state of equilibrium consuming two goods X and Y, with given prices Px and Py. Explain what will happen if:
(i) MUx/Px is greater than MUy/Py.
(ii) Py falls.
Answer:
(i) If MUx/ Px >MUy/ P , then it means that satisfaction of Mr. Aman derived from spending a rupee on goods X is greater than the satisfaction derived from spending a rupee on Goods Y. Mr. Aman will reallocate his income by substituting goods X for goods Y. As the consumption of goods X increases, the marginal utility derived from it goes on diminishing and reverse proposition occurs for goods Y. This process will continue till MUx/ Px becomes equal to MUy/ Py.
(ii) If Py falls, MUx/ Px < MUy/ Py, then it means that satisfaction derived from spending a rupee on goods X is lesser than the satisfaction derived from spending a rupee on goods Y. Mr. Aman will reallocate his income by substituting goods Y for goods X.
As the consumption of Goods Y increases, the marginal utility derived from it goes on diminishing and reverse proposition occurs for goods X. This process will continue till MUx/ Px becomes equal to MUy/Py.