CBSE CLASS 11 ECONOMICS SAMPLE PAPER SET- 3

(ANSWERS)

SET - 3

Economics
Time allowed: 3 hours Maximum Marks: 80

General Instructions:
1. This question paper contains two parts:
Part A - Statistics (40 marks)
Part B - Micro Economic (40 marks)
2. Marks for questions are indicated against each question.
3. Question No. 1-7 and Question No. 16 – 22 are 1 mark questions and are to be answered in one
word/sentence.
4. Question No. 8-10 and Question No. 23 – 25 are 3 marks questions and are to be answered in 60
- 80 words each.
5. Question No. 11-13 and Question No. 26 – 28 are 4 marks questions and are to be answered in
80-100 words each.
6. Question No. 14-15 and Question No. 29 – 30 are 6 marks questions and are to be answered in
100-150 words each.
7. Answers should be brief and to the point and the above word limit be adhered to as far as
possible.

Solution
Q PART - A (STATISTICS) Marks

1 Absolute measures 1

2 Non-Economic 1

3 Title 1

4 Wholesale price index 1

5 c. (i) (c) 1
(ii) (a)
(iii) (b)

6 True 1

7 All of the above 1

 CBSE CLASS 11 ECONOMICS SAMPLE PAPER SET- 3
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8 3
(a) Easy to understand: It should be easy to understand so that a layman can
use it.
(b) Based on all observations: Average should be calculated by taking into
consideration each and every item of the series.
(c) Not affected much by extreme values: The value of an average should not be
affected much by extreme values. One or two very small or very large values,
should not reduce or increase the value of the average.

9 Mode: Mode is that value which occurs most frequently in a distribution. It is the 3
most common value found in a series. It is that value of the variable
which has the highest frequency.

Merits of mode:
(a) No need of complete data: We can find mode even in case of open-ended
frequency distribution. We basically need the point of maximum concentration
of frequencies, it is not necessary to know all the values.

(b) Useful for both quantitative & qualitative data: It can be used to describe
quantitative as well as qualitative data. For example: In the surveys it is used
to measure taste and preferences of people for a particular brand of the
commodity.
OR

Marks (X) Number of Students

10 10 100

20 30 600

30 40 1200

40 35 1400

50 25 1,250

Average mark of students is 32.5.

 CBSE CLASS 11 ECONOMICS SAMPLE PAPER SET- 3
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10 3
X X

40 16 640

20 20

80 12 960

100 8 800

120 4 480

Applying formula,

11 4
size of land holding (in No. of families (f) cf
cases)

0 - 100 80 80

100 - 200 178 258

200 - 300 296 554

300 - 400 128 682

400 - 500 78 760

 CBSE CLASS 11 ECONOMICS SAMPLE PAPER SET- 3
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Median lies in the group 200 - 300. Applying the formula, we get
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12 The total of the percentages is 100. Hence the total angle 360° represents 100. To find the 4
proportionate angles, multiply each percentage by = 3.6°.
These proportionate values are shown ahead:

Items of Percentage (%) Proportionate

Expenditure Expenditure Angles

Food 60% 60 x 3.6 = 216

Clothing 15% 15 x 3.6 = 54

Housing 10% 10 x 3.6 = 36

Fuel and Lighting 12% 12 x 3.6 = 43.2

Miscellaneous 3% 3 x 3.6 = 10.8

100% 360°

The circle is divided into 5 parts according to the degrees of angles at the centre.

OR
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(a)Simple bar diagram: Simple Bar diagram comprises a group of rectangular bars of equal
width for each class or category of data. It is the simplest form of bar diagram.
In this type of diagram, one bar represents only one figure. There will be as many bars as the
number of figures. The distance between the bars should be equal.

(b)Multiple bar diagram: This diagram is used when we have to make a comparison between
two or more variables like income and expenditure, import and export for different years, marks
obtained in different subjects in different classes, etc.
The method of preparation of multiple bar diagrams is the same as that of simple bar diagrams.
It is also known as “Compound Bar Diagram”.

13 Solution: 4

(ii)
 CBSE CLASS 11 ECONOMICS SAMPLE PAPER SET- 3
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14 6

OR
Let the missing frequency be

Class Interval Frequency (f) Mid -values (m) fm

0 - 10 10 5 50

10 - 20 15 15

20 - 30 24 25 600

30 - 40 36 35 1,260

40 - 50 10 45 450

50 - 60 6 55 330

Applying formula,
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15 Calculation of Mean and Standard Deviation 6

Marks No. of Mid-point fm

X Students (m)
(f)

0-4 8 2 16 -4 16 128

4-8 16 6 96 0 0 0

8 - 12 4 10 40 +4 16 64

12 - 16 2 14 28 +8 64 128

N = 30

Mean:

Here,
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Standard Deviation:

Standard deviation = 3.266 marks

Microeconomics

16 All of the above 1

17 Perfect competition 1

18 Law of diminishing marginal utility 1

OR
Indifference map

19 False, Budget set refers to a set of attainable combinations of two goods, given 1
market price of goods and income of the consumer. It includes all the combinations on
the budget line as well as inside the budget line.

20 Oligopoly 1

21 Price and MR curves are the same for a competitive firm, as price remains same at all the levels 1
of output.

22 Demand Curve is negatively sloped showing the inverse relationship between price and 1
quantity demanded of the commodity.
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23 3
Basis Microeconomics Macroeconomics

(a) Meaning It is the branch of economics It is the branch of economics

that studies the behavior of that studies the behavior of
individual units of an macro aggregates of the
economy like an individual economy as a whole or in
household, a firm or an totality.
industry.

(a) Deals with Microeconomics deals with Macroeconomics deals with

various issues like demand, various issues like national
supply, factor pricing, income, distribution,
product pricing, economic employment, general price
welfare, production, level, money, etc.
consumption, etc.

(c) Significance Useful in regulating the Perpetuates firmness in the

prices of a product alongside broad price level and solves
the prices of factors of the major issues of the
production economy like deflation,
inflation, rising prices

(d) Examples Demand for commodity, National Income, Aggregate

price of a commodity, film output, Aggregate Demand,
industry, car industry, supply Unemployment, Inflation etc.
of Capital Goods,
Consumer’s equilibrium etc.
OR

Meaning: Marginal Rate of Transformation (MRT) is the rate at which quantity of a

commodity is sacrificed to produce one more unit of the other good.

Formula:
MRT = Units of commodity 1 sacrificed (Loss)_______
Additional units of commodity 2 obtained (Gain)

Example:
Suppose, an economy produces two goods P and Q.
If we apply all the resources fully and efficiently, we can produce 1P+12Q.
If we want to produce 2P then we have to cut down production of Q by 2 units. Here
2 units of Q are the opportunity cost of producing 1 unit of P.
Thus 2Q:1P is the MRT.

24 Following are the properties of indifference curve 3

(a) Indifference curve always slopes downwards from left to right:
An indifference curve has a negative slope, i.e. it slopes downward from left to right.
If a consumer decides to have one more unit of a commodity
(say apples), the quantity of another good (say oranges) must fall so that the total
satisfaction (utility) remains the same.
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(b) Indifference curve is always convex to the origin:

IC is strictly Convex to origin i.e. MRSxy is always diminishing
Due to the law of diminishing marginal utility a consumer is always willing to sacrifice
lesser units of a commodity for every additional unit of another good.

(c) Higher indifference curve represents higher level of satisfaction:

Higher indifference curve represents larger bundles of goods i.e. bundles which
contain more of both or more of at least one.
It is assumed that consumer’s preferences are monotonic i.e. he always prefers larger
bundles as it gives him higher satisfaction.

(d) Indifference curves can never intersect each other:

As two indifference curve cannot give the same level of satisfaction, they cannot
intersect each other. It means only one indifference curve will pass through a given
point on an indifference curve.

25 3
Original Quantity (Q) = 200 units Original Price = ₹8

New Quantity (Q1) = 150 units New Price =?

Change in quantity = -50 units Change in Price =

Elasticity of Demand = (-) 1

As the quantity demanded is decreasing, price will increase. It means,

New price = Original price (P) + Change in price ( = 8 + 2 = ₹10
New price = ₹10

26 4
Solution:
Law of demand: This law states that, other things being constant, quantity demanded of a
commodity rises/expands with fall in price and falls/contracts with rise in price i.e. there is an
inverse relation between price and quantity demanded.
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Hypothetical demand schedule and curve:

Demand Schedule
Price Quantity Demanded
(in Rs.) (in units)

5 10

4 20

3 30

2 40

1 50

In the above schedule and diagram, we can observe that at a price of Rs.2 quantity
demanded is 40 units. When prices rise to Rs.3 quantity demanded falls to 30 units and when
it falls to Re.1, quantity demanded rises to 50 units. Thus, it establishes the inverse relation
between price and quantity demanded.
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27 4
(a) Increase in the income of ● If the income of the household increases, it will
the household (in case of enable him to buy more.
normal goods) ● Price of the goods is the same and income has
increased, so demand by a household will also
increase.

(b) Increase in the price of If the price of substitute good rises, demand for the
substitute goods given commodity will also rise, as the given commodity
will become relatively cheaper and consumers will
substitute the costly good with the cheaper one.

(c) Decrease in the price of If the price of complementary good falls then demand
complementary goods for that commodity as well as the main commodity will
rise because both the things are used together.

(d) Favorable change in taste If there is a favorable change in the taste and preferences
and preferences of the of a household for a particular commodity or service, then
household for the given demand for it will rise.
commodity E.g. Due to more health consciousness demand for
GYM membership has increased.

28 4
Output(units) AR (Rs.) MR (Rs.) TR (Rs.)

5 10 - 50

10 20 30 200

15 30 50 450

20 40 70 800

25 50 90 1,250
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29 (a) Schedule 6

Output TC AC MC
(in Units) (in Rs.) (in Rs.) (in Rs.)

1 12 - - AC fall
(Because, MC<AC)

2 18 18 6

3 22 11 4

4 27 9 5 AC is minimum and constant

(Because, MC=AC)

5 36 9 9 AC rises
(Because, MC>AC)

(b) Explanation

● Both AC and MC are derived from Total cost (TC) as shown in the above
schedule.
● Both MC and AC initially decline but after reaching their minimum point
they rise due to the Law of variable proportions.
● Up to 3rd level of output, AC falls because MC < AC;
At 4th level of output AC is minimum and constant because MC
= AC;
After 4th level of output AC rises because MC > AC.
● AC refers to per unit cost of output and MC refers to net addition to TC
when one more unit of output is produced

30 (a) Total revenue is the total amount received by selling a given level of output. It can be 6
computed by multiplying the total quantity sold by the selling price.
Formula: Total Revenue = Price x Units sold
Example:
Suppose, a firm sold 100 mobile phones at a price of Rs.5,000 then Total Revenue
will be Rs.5,00,000.
TR = Price x Units sold or 5,000 x 100 = Rs.5,00,000

(b) Explicit cost is the actual money expenditure on inputs or payment made to outsiders
for hiring their factor services. E.g., Wages paid to employees.

Implicit Cost is the cost of self-supplied factors. It is the estimated value of the inputs
supplied by the owners including normal profit. E.g., Interest of own capital, rent of
own land, etc.
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(c) (i) Poor coordination between variable factor and fixed factor
● Increase in units of variable factor beyond a certain limit leads to insufficiency
of fixed factors.
● It causes poor coordination between variable factor and fixed factor and thus
leads to mismanagement.
(ii) Decrease in efficiency of variable factor
● Due to overcrowding even workers get disturbed. As a result, total output
falls.
● Instead of rising, marginal products become negative.