Students must start practicing the questions from CBSE Sample Papers for Class 11 Economics with Solutions Set 9 are designed as per the revised syllabus.

## CBSE Sample Papers for Class 11 Economics Set 9 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.

____________ economics deals with the functioning of an economy as a whole. [1]

(A) Microeconomics

(B) Macroeconomics

(C) Welfare Economics

(D) Growth Economics

Answer:

(B) Macroeconomics

Question 2.

Statistics implies: [1]

(A) Data

(B) Statistical methods

(C) Both (A) and (B)

(D) Neither (A) nor (B)

OR

The data collected by the investigator is called:

(A) Primary data

(B) Secondary data

(C) Both (A) and (B)

(D) Neither (A) nor (B)

Answer:

(C) Both (A) and (B)

Explanation:

Statistics has data and also uses some statistical tools and methods to analyse them.

OR

(A) Primary data

Explanation:

Primary data are those data which are collected for the first time. They are original in character.

Question 3.

Identify the correct pair of terms and definitions from the following Columns I and II:

Column I | Column II |

A. Good questionnaire | 1. Minimum and concise questions |

B. NSSO | 2. National Service Survey Organisation |

C. Primary data | 3. Government publications |

D. Sample Investigation | 4. Each and every unit of universe is studied |

(A) A – 1

(B) B – 2

(C) C – 3

(D) D – 4

Answer:

(A) A – 1

Question 4.

When selected units of the universe are studied, then it is called: [1]

(A) Practical Investigation

(B) Sample Investigation

(C) Census Investigation

(D) None of the above

Answer:

Option (B) is correct.

Explanation:

As the investigation is being done of the data collected from a particular sample, it is called Sample Investigation.

Question 5.

As far as possible, construction of continuous frequency distribution should be based on following class interval: [1]

(A) Equal class interval

(B) Unequal class interval

(C) Open end class interval

(D) None of the above

Answer:

(A) Equal class interval

Explanation:

Equal class intervals is the basis for the continuous frequency distribution as it helps in the proper evaluation of the data.

Question 6.

Arithmetic Mean is: [1]

(A) Average of Position

(B) Average of Location

(C) Measure of Density

(D) Mathematical Averages

Answer:

Option (D) is correct.

Explanation:

Average of Position is Median and Mode. There is nothing called average of location and density.

Read the following extract and answer questions 7 to 10 on the basis of the same:

Correlation coefficients are indicators of strength of the linear relationship between two different variables, x and y. A linear correlation coefficient that is greater than zero indicates a positive relationship. A value that is less than zero signifies a negative relationship. Finally, a value of zero indicates no relationship between the two variables x and y.

This article explains the significance of linear correlation coefficients for investors, how to calculate covariance for stocks, and how investors can use correlation to predict the market.

Correlation coefficients are used to measure the strength of the linear relationship between two variables.

A correlation coefficient greater than zero indicates a positive relationship while a value less than zero signifies a negative relationship.

A value of zero indicates no relationship between the two variables being compared.

A negative correlation, or inverse correlation, is a key concept in the creation of diversified portfolios that can better withstand portfolio volatility.

Calculating the correlation coefficient is time-consuming, so data are often plugged into a calculator, computer, or statistics program to find the coefficient.

Understanding Correlation

The correlation coefficient (p) is a measure that determines the degree to which the movement of two different variables is associated. The most common correlation coefficient, generated by the Pearson product-moment correlation, is used to measure the linear relationship between two variables. However, in a non-linear relationship, this correlation coefficient may not always be a suitable measure of dependence.

The possible range of values for the correlation coefficient is -1.0 to 1.0. In other words, the values cannot exceed 1.0 or be less than -1.0. A correlation of -1.0 indicates a perfect negative correlation, and a correlation of 1.0 indicates a perfect positive correlation. If the correlation coefficient is greater than zero, it is a positive relationship. Conversely, if the value is less than zero, it is a negative relationship. A value of zero indicates that there is no relationship between the two variables.

Question 7.

What relation is shown by correlation? [1]

(A) Linear

(B) Quadratic

(C) Cubic

(D) Exponential

Answer:

(A) Linear

Explanation:

As in the article, “Correlation coefficients are indicators of the strength of the linear relationship between two different variables, x and y. A linear correlation coefficient that is greater than zero indicates a positive relationship. A value that is less than zero signifies a negative relationship. Finally, a value of zero indicates no relationship between the two variables x and y”

Question 8.

If value of r = ±1 than correlation is said to be: [1]

(A) Perfect

(B) Incomplete

(C) Undecided

(D) All of the above

Answer:

(A) Perfect

Explanation:

When the correlation between two variables is +1 or -1, they are said to be positively correlated

Question 9.

Coefficient of Correlation: [3]

(A) Can never be negative

(B) Can never be positive

(C) May be positive or negative

(D) Always positive

Answer:

Option (C) is correct.

Explanation:

When there is a direct relation between two variables, there is a positive correlation. When there is an inverse relation between the two variables the correlation is negative.

Question 10.

Value of coefficient of correlation will have positive signs when: [1]

(A) X is increasing Y is decreasing

(B) Both X and Y are increasing

(C) X is decreasing Y is increasing

(D) None of the above

Answer:

(B) Both X and Y are increasing

Question 11.

Mr. Ashok was getting ₹ 400 in the base year and ₹ 800 in the current year. If Consumer Price Index is 350, then what extra amount is required for maintaining the earlier standard of living? [3]

Answer:

For former standard of living, Ashok should get

= ₹ \(\frac{400 \times 350}{100}\) = ₹ 1,400

∴ Amount required for maintaining the same standard of living = ₹ 1,400 – ₹ 800 = ₹ 600

Question 12.

Mode is the best representative value of all items of the series because it is that value which occurs most frequently in the series. State three advantages of Mode in the context of above statement. [3]

OR

Read the following table carefully and give your comments: [3]

Answer:

Mode is the best representative value of all items of the series because:

- It is easy to calculate and can be easily understood. It can be located by inspection only.
- It is not affected by the extreme values in a series.
- It can be calculated even in case of open-end classes.

OR

The following conclusions can be made by analysing the above table:

- Manufacturing Industry has the highest weight of 79.58% as compared to the Mining and Quarrying and Electricity Industries that accounts for 10.73% and 10.69% respectively.
- The production of Manufacturing Industry is higher than that of the Mining and Quarrying and Electricity Industries in both the years 1996-97 and 2003-04.
- Mining and Quarrying has the least growth performance while that of the Manufacturing Industry is the highest.
- The General Index is comparatively higher in the year 2003-04 than 1996-97.

Question 13.

Wages of 50 workers are given. Present them in the form of exclusive frequency distribution with class interval as 45-55, 55-65, etc.:

95, 92, 91, 90, 88, 82, 86, 87, 87, 88, 70, 72, 76, 77, 77, 79, 79, 79, 78, 78, 68, 67, 67,66, 65, 63, 63, 63, 63, 64, 58, 59, 60, 60, 60, 60, 61, 62, 62, 62, 55, 55, 55, 56, 57, 54, 53, 52, 52, 50. [4]

OR

Represent the following data by a pie diagram:

Items | Percent |

Agriculture | 40 |

Industry | 21 |

Transport | 19 |

Administration | 13 |

Banking | 07 |

Answer:

As in the question, wages of 50 workers are given in the form of individual series. For converting individual series into frequency distribution, tally bar should be prepared.

The exclusive frequency distribution of given data is shown below:

OR

Items | Percent % | Degrees |

Agriculture | 40 | 144° |

Industry | 21 | 75.6° |

Transports | 19 | 68.4° |

Administration | 13 | 46.8° |

Banking | 07 | 25.2° |

360.0 |

Pie-Diagram

Question 14.

Find out the missing item x of the following, where Arithmetic Mean (X) is 11.37. [4]

X | Frequency (f) |

5 | 2 |

7 | 4 |

X | 29 |

11 | 54 |

13 | 11 |

16 | 8 |

20 | 4 |

Answer:

X | Frequency (f) | f(x) |

5 | 2 | 10 |

7 | 4 | 28 |

x | 29 | 29 (x) |

11 | 54 | 594 |

13 | 11 | 143 |

16 | 8 | 128 |

20 | 4 | 80 |

Σf = 112 | ΣfX = 983 + 29x |

∴ X̄ = Σf x /Σf

⇒ 11.37 = \(\frac{983+29 x}{112}\)

⇒ 1273.44 = 983 + 29x

⇒ x = 10.01 = 10

Hence, the missing value is 10.

Question 15.

Calculate the median and upper quartile (Q_{3}) of the following distribution: [4]

Salary (in ₹) | Number of Labour |

40 | 5 |

45 | 7 |

48 | 6 |

50 | 10 |

55 | 5 |

60 | 8 |

Answer:

Salary (in ₹) | Number of Labour(f) | Cumulative Frequency (cf) |

40 | 5 | 5 |

45 | 7 | 12 |

48 | 6 | 18 |

50 | 10 | 28 |

55 | 5 | 33 |

60 | 8 | 41 |

N = 41 |

Question 16.

Calculate the Weighted Average of price relative index for 2008 on the basis following data: [6]

Answer:

Question 17.

Calculate correlation coefficient by step deviation method: [6]

Calculate the Mode from the following data by step deviation method:

Marks | No. of Students |

0-10 | 4 |

10-20 | 3 |

20-30 | 6 |

30-40 | 4 |

40-50 | 2 |

Answer:

There is a perfectly negative correlation between price and quantity demanded.

OR

Mode (Z) = I_{1} \(\frac{f_1-f_0}{2 f_1-f_0-f_2}\)

= 20 + \(\frac{6-3}{2 \times 6-3-4}\)

= 20 + \(\frac{3}{5}\)

= 20 + 0.6 = 20.6

Section – B

Question 18.

AP can have:

(A) positive values only

(B) negative values only

(C) both positive and negative values

(D) neither positive nor negative values

OR

Which of the following statement is true: [1]

(A) Marginal Product refers to total output produced by a firm during a given period of time with given number of inputs.

(B) Average Product refers to total output produced by a firm during a given period of time with given number of inputs.

(C) Total Product refers to total output produced by a firm during a given period of time with given number of inputs.

(D) Total Product refers to total input produced by a firm during a given period of time with given number of outputs.

Answer:

(A) positive values only

Explanation:

As Average Product is found by dividing the total product by number of output, it can never be negative.

OR

(C) Total Product refers to total output produced by a firm during a given period of time with given number of inputs.

Explanation:

Option A is false as Marginal Product is the output produced with one extra unit of input. Option (B) is false as Average product is the output produced per unit of input.

Option (D) is false because Total Product is the total output produced by the firm during the given period of time with the given number of inputs.

Question 19.

If a firm produces zero output in the short period, then: gp! [1]

(A) TC will be zero

(B) VC will be positive

(C) FC will be positive

(D) MC will be zero

Answer:

(C) FC will be positive

Explanation:

When the firm produces zero output, it will still incur the fixed cost but no variable cost will be incurred by it. Thus, the Total Cost cannot be zero as it includes the Fixed Cost. Variable Cost cannot be positive as it will be zero and neither MC will be zero, so only FC will be positive.

Question 20.

If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in it price, then elasticity of demand is: [1]

(A) >1

(B) = 1

(C) < 1

(D) = 0

Answer:

(C) < 1

Explanation:

As the elasticity is the responsiveness of quantity demanded with respect to the change in price and in this case the increase in the quantity demanded is less than the fall in price leading to the elasticity to be less than 1.

Question 21.

Read the following Assertion (A) and Reason (R) and choose the correct alternatives:

Assertion (A): A firm is able to sell more quantity of a good only by lowering the price.

Reason (R): The firm’s Marginal Revenue, as he goes on selling, would be less than Average revenue. Alternatives:

(A) Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

(C) Assertion (A) is true, but Reason (R) is false.

(D) Assertion (A) is false, but Reason (R) is true.

Answer:

(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

Explanation:

A firm is able to sell more quantity of a good only by lowering the prices as the goods will become more competitive and so the sales will increase.

Question 22.

Read the following Assertion (A) and Reason (R) and choose the correct alternatives: [1]

Assertion (A): Profit is maximised when MC = MR

Reason (R): Along with MC = MR, another necessary condition is that MC should be rising.

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 Assertion (A).

(C) Assertion (A) is true, but Reason (R) is false.

(D) Assertion (A) is false, but Reason (R) is true.

Answer:

(D) Assertion (A) is false, but Reason (R) is true.

Explanation:

Profit is maximise not only when MC = MR but also when the MC cuts the MR curve from below.

Question 23.

Which one of the following is not a determinant of individual supply? [1]

(A) Price of the given commodity

(B) Taxation policy

(C) State of technology

(D) Number of firms

Answer:

(D) Number of firms

Explanation:

Number of firms in the market will affect the market supply and not the supply of an individual firm.

Read the following passage and answer questions 24 to 27 that follows: [1]

Our aim here is to grasp some specific aspects of demand theory in relation to indifference curves, as they have been dealt with from Pareto onward and as they were understood in America in the late 1920s and early 1930s. Before entering into this story, it seems necessary to say a word about the ordinalist revolution and about the English contributions to ordinalism. The ordinalist revolution originates in the criticism of the psychological foundations of the theory of demand, namely, the principle of decreasing marginal utility as Alfred Marshall ([1890] 1898) used it. The rejection of hedonist hypotheses led Irving Fisher (1892) and Pareto (1896-97,1900,1909) to favour an objective or “positive” approach to economic concepts. The “ordinalist revolution” (Omarzabal 1995, 116) is grounded in a methodological transformation of economics that put the facts of objective experience as a foundation of economics and provided a research program for the ensuing years (Green and Moss 1993; Lewin 1996). Mathematically, ordinalism is entirely based upon the idea that one can dispense with the use of a specific utility function and that no meaning shall be attached to utility measurement, except as an ordinal principle.

Clearly, the development of ordinalism must be separated from the introduction of the concept of the indifference curve. Ordinalism was first advocated in Fisher’s “Mathematical Investigations” (1892) and Pareto’s Sunto (1900) and Manual ([1909] 1971), while the indifference curve had appeared in F. Y. Edgeworth’s Mathematical Psychics (1881). It was thus only through Fisher’s and Pareto’s recasting that the concept of the indifference curve became irreversibly associated with the promotion of ordinalism. Along the way, the recasting of the theory of choice along ordinalist lines raised a number of issues (about integrability, measurability, and complementarity) that would be progressively settled. A reasonable closing date for the ordinalist revolution is 1950, after Houthakker’s (1950) and Samuelson’s (1950) contributions.

From the late 1920s, the Paretian school was progressively gaining a larger audience while the use of the concept of marginal utility and other derivative concepts was challenged. Consequently, demand theory was recast along the principles of individual preferences and ordinal utility functions. Nevertheless, English authors proved very silent about the meaning of indifference curves. Most if not all of the reflections after 1920 about the nature of indifference curves took place in America, mainly under the impulse of Henry Schultz at Chicago. This is an American story.

Question 24.

Which of the following is not the way of studying Utility? [1]

(A) Cardinal Approach.

(B) Ordinal Approach

(C) Both (A) and (B)

(D) Neither (A) nor (B)

Answer:

(D) Neither (A) nor (B)

Explanation:

Utility can be studied with the help of both ordinal approach, that is through Marginal Utility, and Cardinal Approach, that is through Indifference Curve Approach.

Question 25.

How is utility measured in Ordinal utility theory? [1]

(A) In Utils.

(B) Through indifference curves.

(C) In meters.

(D) All of the above.

Answer:

(B) Through indifference curves.

Explanation:

Utils is used to measure utility in Cardinal Utility Theory. Indifference Curves are used to measure utility in Ordinal Utility Theory and Meters are used to measure lengths and distances.

Question 26.

How is utility measured in Cardinal utility approach? [1]

(A) In Utils.

(B) Through indifference curves.

(C) In meters.

(D) All of the above.

Answer:

(A) In Utils.

Explanation:

Utils is used to measure utility in Cardinal Utility Theory. Indifference Curves are used to measure utility in Ordinal Utility Theory and Meters are used to measure lengths and distances.

Question 27.

______________ is a curve showing different combination of two goods, each combination offering the same level of satisfaction to the consumer. [1]

(A) Marginal Utility Curve

(B) Total Utility Curve

(C) Indifference Curve

(D) All of the Above

Answer:

(C) Indifference Curve

Explanation:

Marginal Utility Curve is the curve showing the locus of all the points indicating the utility derived from the consumption of one extra unit of a commodity. Total Utility Curve is the curve showing the locus of all the points indicating the utility derived from the consumption of the commodity. Indifference Curve shows the different combination of two goods that the consumer purchases having the same utility.

Question 28.

What difference does it make to the market when we say that there are large number of sellers in a perfectly competitive market? Explain. [4]

OR

What conditions must hold if a profit-maximizing firm produces positive output in a competitive market? [3]

Answer:

The number of sellers is so large that no individual firm can influence the market price on its own. The proportion of output produced by an individual firm is insignificant. Therefore, an individual firm, whether raises output or reduces output, it has no effect on market price of the goods.

OR

The following three conditions must hold if a profit- maximising firm produces positive level of output (say equilibrium output Q*) in a competitive market:

- MR must be equal to MC at Q*
- MC should be upward sloping or rising at Q*.
- In short-run – Price must be greater than or equal to AVC.

In long-run – Price must be greater than or equal to LAC.

Question 29.

Explain the concept of ‘Buffer stock’ as a tool of price floor. [3]

Answer:

Buffer stock is an important tool in the hands of government to ensure price floor/minimum support price. If in case, the market price is lower than what the government feels should be given to the farmers/ producers it would purchase the commodity at higher price from the farmers/producers so as to maintain stock of the commodity with itself to be released in case of shortage of the commodity in future.

Question 30.

The price elasticity of demand for a commodity is (-0.25). The demand of the commodity is 500 units at the unit price of ₹5. What will be the price if the demand for the commodity increases by 20% ? [4]

Answer:

E_{d} = \(\frac{\Delta Q}{\Delta P} \cdot \frac{P}{Q}\)

Q_{2} = 500 + 20% = 600

ΔQ = 600 – 500 = 100

Now E_{d} = \(\frac{\Delta Q}{\Delta P} \cdot \frac{P}{Q}\)

– 0.25 = \(\frac{125}{\Delta P} \times \frac{5}{500}\)

ΔP = – \(\frac{100 \times 5}{500 \times 0.25}\) × 4

The new price will be P+ ΔP = 5 + (- 4) = ₹1

Question 31.

Complete the following table: [4]

Answer:

Question 32.

(i) What does a Production Possibility Curve show? When will it shift to the right? [3]

(ii) What is Opportunity Cost? [1]

OR

What does Increasing Marginal Opportunity Cost along a PPC mean? [4]

Answer:

(i) Production Possibility Curve shows different possible combinations of two goods that can be produced with given resources and technology.

PPC shifts rightward when resources of an economy grow due to:

(a) Availability of new equipment,

(b) Increase in skilled and unskilled labour through population growth,

(c) Discovery of new natural resources, or

(d) Availability of new or better technology.

(ii) Opportunity cost is the next best alternative foregone in choosing a given alternative. Suppose an economy produces only two goods X and Y. Further, suppose that by employing these resources fully and efficiently, the economy produces 1X + 10Y If the economy decides to produce 2X, it has to cut down production of Y by 2 units. Then 2Y is the Opportunity Cost of producing 1X. [4]

OR

Increasing Marginal Opportunity Cost along a PPC means that loss of Y gain of X tends to increase as more and more of resources are shifted from Y to X. That is why PPC is concave to the origin. It occurs

because of the law of diminishing returns. Increasing application of resources in X would mean gain of additional output of X. And, increasing withdrawal of resources from Y would mean more and more of additional loss of output of Y.

Commonly Made Error:

Students did not write the ‘headings’ in the points thereby making the answer difficult to read.

Answering Tip:

While learning give special emphasis on the ‘headings’. Points should start from the headings.

Question 33.

Explain the condition of producer’s equilibrium with the help of a numerical example. Use Marginal Cost and Marginal Revenue approach. [6]

OR

Explain any three factors causing a shift of supply curve of a commodity. [6]

Answer:

Output (Units) | MR (₹) | MC (₹) |

1 | 10 | 12 |

2 | 10 | 10 |

3 | 10 | 9 |

4 | 10 | 10 |

5 | 10 | 13 |

Producer’s equilibrium refers to a situation, where a producer is producing that level of output at which its profits are maximum. In other words, it is a situation of profit maximisation.

Following are the two conditions of producer’s equilibrium:

(i) MR = MC

(ii) MC must be rising at the point of equilibrium or

MC curve must cut MR curve from below:

These conditions are satisfied when 4 units of output are produced in the given schedule.

OR

Change in supply means the shift of supply curve. With increase in supply, supply curve shifts to the right and with decrease in supply, the supply curve shifts to the left. The following factors cause a change in supply:

1. Technological Changes: When there is technological improvement, output is produced at lower cost. Lower cost of production increases the supply of the commodity. The supply curve shifts to the right.

2. Price of Other Goods: When price of a substitute good increases, the quantity supplied of the concerned good decreases and there is a backward shift of the supply curve. Supply curve shifts forward in case price of the substitute good decreases.

3. Price of Factors of Production: If factor price decreases, cost of production also decreases. Accordingly, supply increases and the supply curve shifts to the right. If factor price increases, supply tends to decline and there is a backward shift in supply curve.

4. Number of Firms: Increase in the number of firms implies increase in market supply and conversely, decrease in number of firms reduces the market supply of the commodity.

Question 34.

Explain the concept of Marginal Rate of Substitution with the help of numerical example. Also explain its behaviour along an indifference curve. [6]

Answer:

Marginal Rate of Substitution (MRS) means the rate at which a consumer is willing to sacrifice quantity of one good to obtain one more unit of the other good.

Let the two goods consumed be A and B. Suppose the following combinations of these two goods have the same utility level for him:

Goods A | Goods B | MRS |

1 | 8 | – |

2 | 4 | 4B:1A |

3 | 1 | 3B:1A |

The consumer is willing to sacrifice 4B to obtain second unit of A. For the third unit of A, he is willing to sacrifice less because marginal utility of A decreases as he consumes more of A.