Maharashtra HSC Board Exam 2024
ECONOMICS (49)
Notes:
- All questions are compulsory.
- Draw neat tables / diagrams wherever necessary.
- Figures to the right indicate full marks.
- Write answers to all main questions on new pages.
(i) Method adopted in micro economic analysis
Options: (1) a, c, d (2) b, c, d (3) Only c (4) Only a
(ii) Factors which are working in unorganised money market.
Options: (1) a, b, c (2) b, c (3) b, d (4) a, c, d
(iii) Optional functions of Government.
Options: (1) b, c (2) a, b, c (3) b, c, d (4) All of the above
(iv) Statements that highlight the significance of index numbers.
Options: (1) b, c, d (2) a, b, c (3) a, b, d (4) a, c, d
(v) Blood bank is an example of _____.
Options: (1) a, b, c (2) b, c, d (3) a, b, d (4) Only d
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(i) Types of demand: Direct demand, Indirect demand, Composite demand, Market demand.
(ii) Features of National Income: Financial year, Money value, Static concept, Flow concept.
(iii) Types of budget: Deficit budget, Zero budget, Balanced budget, Surplus budget.
(iv) Legal monopoly: Patent, OPEC, Copyright, Trade mark.
(v) Financial Assets: Bonds, Land, Govt. Securities, Derivatives.
(i) More quantity is demanded due to changes in the favourable factors determining demand other than price.
(ii) Deposits that are withdrawable on demand.
(iii) Charging different prices to different consumers for the same product or services.
(iv) Net addition made to total cost by producing one more unit of output.
(v) Degree of responsiveness of quantity demanded to change in income only.
(i) General equilibrium : Macro Economics : : _________ : Micro Economics
(ii) Output method : _________ : : Income method : Factor cost method
(iii) Form utility : Furniture : : _________ : Doctor
(iv) Perfectly elastic demand : Ed = ∞ : : _________ : Ed = 0
(v) _________ : Change in supply : : Other factors constant : Variation of supply
(i) Manisha satisfied her want of writing an essay by using pen and notebook.
Concept: Utility (Specifically Form Utility).
Explanation: Utility is the capacity of a commodity to satisfy human wants. Here, the pen and notebook possess the utility to satisfy the want of writing an essay.
(ii) Raghu’s father invested his money in a market for long term funds both equity and debt raised within and outside the country.
Concept: Capital Market.
Explanation: Capital market is a market for long term funds represented by equity and debt. It deals with financial assets having a maturity period of more than one year.
(iii) Due to mandatory use of masks during corona epidemic the demand for mask producing labour has increased.
Concept: Derived Demand (or Indirect Demand).
Explanation: Derived demand refers to demand for goods which are needed for further production. Factors of production like labour have derived demand because they are demanded to produce final goods (masks).
(iv) Maharashtra purchased wheat from Punjab.
Concept: Internal Trade (Domestic Trade).
Explanation: Internal trade refers to buying and selling of goods and services within the political boundaries of a country. Trade between two states of the same country is internal trade.
(v) Jagruti receives monthly pension of ₹ 5,000 from the state government.
Concept: Transfer Payment.
Explanation: Transfer payments are payments made by the government to individuals without any corresponding production of goods or services in return, such as pensions, unemployment allowances, etc.
(i) Recurring deposits and Fixed deposits
- Nature: Recurring deposits require regular monthly savings for a fixed period. Fixed deposits involve a lump sum amount deposited for a fixed period.
- Objective: RD encourages regular savings habit among low/middle income groups. FD allows parking surplus funds for higher interest.
(ii) Total utility and Marginal utility
- Meaning: Total utility (TU) is the aggregate of utility derived from all units consumed. Marginal utility (MU) is the additional utility derived from the consumption of an additional unit.
- Trend: TU increases at a diminishing rate. MU goes on diminishing with every successive unit consumed.
(iii) Perfectly elastic demand and Perfectly inelastic demand
- Meaning: Perfectly elastic demand is when a slight change in price leads to an infinite change in quantity demanded. Perfectly inelastic demand is when quantity demanded remains constant regardless of price change.
- Elasticity (Ed): Ed = ∞ (Infinity) vs Ed = 0 (Zero).
(iv) Price Index and Quantity Index
- Meaning: Price Index Number measures the general changes in the prices of goods. Quantity Index Number measures the changes in the level of output or physical volume of production.
- Variable: It considers price changes. It considers quantity/volume changes.
(v) Internal debt and External debt
- Source: Internal debt is raised from within the economy (citizens, banks). External debt is raised from outside the country (foreign govts, IMF).
- Currency: Internal debt is in domestic currency. External debt is in foreign currency.
(i) Explain any four types of demand.
- Direct Demand: Demand for goods that satisfy wants directly (e.g., Food, Clothes).
- Indirect (Derived) Demand: Demand for factors of production required to produce final goods (e.g., Demand for labour).
- Complementary (Joint) Demand: When two or more goods are demanded together to satisfy a single want (e.g., Car and Fuel).
- Composite Demand: Demand for a commodity that can be put to several uses (e.g., Electricity).
- Competitive Demand: Demand for substitutes (e.g., Tea and Coffee).
(ii) Explain any four problems of capital market in India.
- Financial Scams: Frequent financial scams have eroded investor confidence.
- Insider Trading: Illegal practice of trading with non-public information affects market integrity.
- Inadequate Debt Instruments: The market for debt instruments is not as developed as the equity market.
- Decline in Efficiency: Delays in settlement and other procedural issues reduce efficiency.
(iii) Explain any four features of utility.
- Relative Concept: Utility relates to time and place (e.g., Woolen clothes have utility in winter).
- Subjective Concept: It differs from person to person based on taste and preference.
- Ethically Neutral: Utility does not distinguish between good or bad (e.g., A knife has utility for a housewife and a killer).
- Differs from Usefulness: A commodity may have utility but not usefulness (e.g., Liquor).
(iv) Explain any four reasons for the growth of public expenditure.
- Increase in Government Activities: Modern states are welfare states, performing many functions beyond just defense.
- Rapid Increase in Population: More population requires more spending on education, health, and infrastructure.
- Growing Urbanization: Shift to cities creates need for water, roads, and transport systems.
- Defense Expenditure: War threats and modern warfare require huge spending on defense.
(v) Explain any four features of macro economics.
- Study of Aggregates: It deals with the whole economy (National Income, Total Employment).
- General Equilibrium Analysis: It deals with the behavior of large aggregates and their functional relationship.
- Lumping Method: It studies the forest rather than the trees (whole economy).
- Growth Models: It studies factors of economic growth and development.
(i) Over the last 75 years, India’s foreign trade has undergone a complete change in terms of composition and direction.
Agree.
Reasons: 1. Before independence, India exported raw materials and imported finished goods. Now, India exports manufactured goods, software, and engineering products. 2. The direction has shifted from being dependent on UK/USA to a diversified trade with UAE, China, Germany, and other Asian countries. 3. Volume and value of trade have increased manifold.
(ii) Macro economics is different from micro economics.
Agree.
Reasons: 1. Micro economics studies individual units (tree), while Macro economics studies the whole economy (forest). 2. Micro uses Slicing method; Macro uses Lumping method. 3. Micro deals with Partial Equilibrium; Macro deals with General Equilibrium. 4. Micro focuses on Price Theory; Macro focuses on Income and Employment Theory.
(iii) Price maker is the only feature of monopoly market.
Disagree.
Reasons: 1. While 'Price Maker' is a key feature, it is not the *only* feature. 2. Other features include Single Seller, No Close Substitutes, Barriers to Entry, and Price Discrimination. 3. A monopolist also has complete control over market supply.
(iv) There are many sources of non-tax revenue.
Agree.
Reasons: 1. Besides taxes, the government earns from Fees (e.g., Education fees, Registration fees). 2. Prices of public goods and services (e.g., Railway fares). 3. Special Assessments (Betterment levy). 4. Fines and Penalties. 5. Grants and Gifts from foreign governments or institutions.
(v) There are many types of index numbers.
Agree.
Reasons: 1. Price Index Number (measures price changes). 2. Quantity Index Number (measures output changes). 3. Value Index Number (combines price and quantity). 4. Special Purpose Index Numbers (e.g., Import-Export Index, Share Price Index).
(i) Observe the following table and answer the questions given below it:
| Commodities | Prices in 2006 (Base Year) | Prices in 2019 (Current Year) |
|---|---|---|
| \(P_0\) (in ₹) | \(P_1\) (in ₹) | |
| A | 20 | 30 |
| B | 30 | 45 |
| C | 40 | 60 |
| D | 50 | 75 |
| E | 60 | 90 |
Questions:
(1) Write the formula for calculation of price index.
(2) Find the value of \(\sum P_0\) and \(\sum P_1\).
\(\sum P_1 = 30+45+60+75+90 = 300\)
(3) Find the price index \(P_{01}\).
\(P_{01} = 1.5 \times 100 = 150\)
(ii) Observe the given diagram (Page 5) and answer the following questions:
(Diagram analysis: The diagram shows shifts in demand curve from D to D1 and D to D2 while price remains constant at P)
Questions:
(1) Rightward shift in demand curve ..........
(2) Leftward shift in demand curve ...........
(3) Price remains ........
(4) Increase and decrease in demand comes under........
(iii) Read the given passage and answer the questions:
(Passage discusses Market concept, types including perfect and imperfect competition, and Monopolistic competition features like selling cost.)
Questions:
(1) Explain the concept of Market from Economic sense.
(2) Write the classification of Market.
(3) Write your own opinion about selling cost.
(i) Explain the concept of price elasticity with its types.
Meaning: Price elasticity of demand refers to the degree of responsiveness of quantity demanded to a change in price only.
Types:
- Perfectly Elastic Demand (Ed = ∞): Slight change in price causes infinite change in demand. Curve is horizontal parallel to X-axis.
- Perfectly Inelastic Demand (Ed = 0): Change in price causes no change in demand. Curve is vertical parallel to Y-axis.
- Unitary Elastic Demand (Ed = 1): Percentage change in demand is equal to percentage change in price. Curve is a rectangular hyperbola.
- Relatively Elastic Demand (Ed > 1): Percentage change in demand is greater than percentage change in price. Curve is flatter.
- Relatively Inelastic Demand (Ed < 1): Percentage change in demand is less than percentage change in price. Curve is steeper.
(ii) Explain the concept of National income and explain the practical difficulties involved in the measurement of National income.
Concept: National Income is the total money value of all final goods and services produced in a country during a financial year.
Practical Difficulties:
- Problem of Double Counting: Difficulty in distinguishing between intermediate and final goods leads to counting the same value multiple times.
- Non-Monetized Sector: In India, much production (especially agriculture for self-consumption) is not exchanged for money, so it is excluded.
- Inadequate and Unreliable Data: Data regarding small scale industries, unorganized sector is often unavailable or inaccurate.
- Depreciation: Calculating exact depreciation of capital assets is difficult due to varying rates and methods.
- Capital Gains/Losses: Increase in value of assets due to inflation is not real production but complicates calculation.
- Illiteracy and Ignorance: Small producers do not maintain accounts, making assessment difficult.
(iii) State and explain the law of supply with assumptions.
Statement: "Other things remaining constant, higher the price of a commodity, more is the quantity supplied and lower the price of a commodity, less is the quantity supplied."
Formula: \(Sx = f(Px)\) (Direct relationship).
Assumptions:
- Constant Cost of Production: If costs increase, supply may not increase even if price rises.
- Constant Technique of Production: Technology should not change.
- Constant Government Policy: Tax and trade policies should remain unchanged.
- No Change in Weather Conditions: Especially for agricultural goods.
- No Change in Transport Cost: Transport facilities and costs remain static.
- Prices of Other Goods Constant: Producers should not shift to other goods.
- No Future Expectations: Sellers should not expect further price changes.