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Class 12 Economics Question Paper 2080 Solution

Class 12 Economics Question Paper 2080 Solution

Class 12 Economics Question Paper 2080 Solution


Sub. code: 3041

NEB-GRADE- XII 2079 (2023) 
Model Question
Solution
Economics

The candidates are required to give their answers in their own words as far as practicable. The figures is the margin indicate full mark. 
Time: 3 Hrs.                                                                                                             Full Marks: 75 
Attempt All Questions:

Group: A

Very Short Answer Type Questions; [11 x 1=11] 

1. Write any two advantages of division of labour. 
Answer: Two advantages of Division of labour are;
  • Right Person at the right place,
  • Improvement in skills.
2. A seller earns Rs. 700 from the sale of 10 units of a good. If s/he sells 1 more units, her/his total revenue becomes Rs. 750, then find marginal revenue by using formula.
Answer:
                Initial Total revenue earned by selling 10 units (TR1)= 700
                New initial Total revenue earned by selling 1 more unit (TR2)= 750
We know that,
                Marginal revenue (MR) = TR2 - TR1 
                 Marginal Revenue (MR)= 750-700 
                Marginal Revenue (MR)= Rs. 50

3. What is the policy applied by central bank to control the money supply and credit called?
Answer:
Central Bank applied Monetary Policy to control the money supply and credit.

4. Write any one different fixed exchange rate and flexible exchange rate. 
Answer: One difference between fixed exchange rate and flexible exchange rate are;
  •  A fixed Exchange Rate is set by the government of the central bank but a flexible exchange rate is determined by market forces of demand and supply.

5. What is "structural unemployment"? 
Answer: Unemployment that occurs as a result of changes in the structure of an economy, such as changes in globalization, technology, etc. is called structural unemployment.

6. When did Nepal become the member of WTO?
Answer: Nepal become a member of WTO on April 23, 2004 A.D.

7. Write down any policies aimed at reducing the size of population below poverty line in the current plan of Nepal. 
Answer: Nepal's current plan aims to reduce the size of the population below the poverty line by increasing access to basic services such as education, health services, drinking water, and sanitation policies.

8. There is gender inequality in your community. More priority is given to boys as compared to girls either at home or in school. In this regard, state any two roles that you can play to achieve the goal of gender equality in education by 2030 in Nepal. 
Answer: Two roles that I can play to achieve the goals of gender equality in education by 2030 in Nepal, 
  • Raising awareness about the importance of gender equality by organizing campaigns in our community.
  • Supporting girls' education by providing financial assistance, volunteering at school and encouraging parents to send their daughter to school.
9. Write any two pre-requisites of primary data. 
Answer: Two pre-requisites of primary data are;
  • Objectives of the enquiry
  • Scope of the enquiry 
10. The sources of primary data collection are books, newspapers, radio, etc, But there are various problems in data collection from such sources. In this regard, point out any two problems while using the data from secondary sources. 
Answer: Two problems while using the data from secondary sources are;
  • Some of the secondary sources' data can be unreal.
  • Required information may not be published in secondary data.
11. If the different and sum of first quartile (Q1) and third quartile (Q3) are 45 and 75 respectively. Find the coefficient of quartile deviation and interpret it.
Answer:
                 First Quartile (Q1) = 45,
                 Third Quartile (Q3) = 75
                 Coefficient of Q.D =?
We know that,
                 Coefficient of Q.D = Q3 - Q1 / Q3+ Q1
                 Coefficient of Q.D = 75 - 45 / 75 + 45
                 Coefficient of Q.D = 30/120
                 Coefficient of Q.D = 0.25

Group B

Short Answer Types Questions: [8 x 5 =40] 

12. What is the meaning of allocation of resources? Identify and describe the three major issues that may rise while allocating resources. 
Or, 
What is Market Economy? Explain any four features of the market economy.  
Answer: 
               A market economy is the type of economy in which all credit goes to people's views and decisions without any control of government and state. The market economy is also known as a free-market economy or capitalist economy. The market economy resolves the problem of consumers through the interaction between demand and supply. In a market economy, there is a division of labor to produce quality goods and services.  In the market, most industries, and firms are handled by private owners or organizations to make profit and profit motives.
The main features of the Capitalist economic system are mentioned below; 
i. Private property: The main feature of the capitalist economic system is private poverty. All the productive resources such as land, factories, mines, etc. have come under private ownership. The owner has the right to, control, and dispose of the means of production. 
ii. Economic freedom: As you know that in a capitalist economy, there is no control of the government, which means that all the producers, consumers, and suppliers have free to produce goods and services according to the demand. 
iii. Limited role of government: Since the capitalist economic means of private ownership. There is a high role of private ownership and a limited role of government to maintain the law and order and to develop infrastructure to encourage the private sector. 
iv. Profit motive: In the capitalist economy, all the private owners desire to earn profit and it is the most important to all the ownership. The producers produce those goods or services to make a higher profit. In profit motives, how to produce and for whom to produce are taken on the basis of profit and not on the basis of social welfare is the main aim of the producer.

13. Define Uncertainty Bearing Theory of profit. Point out its any four weaknesses. 
Answer: The Uncertainty Bearing Theory of profit was developed by the American economist, Prof. Frank Hyneman Knight in his book entitled "Risk Uncertainty and Profit"  in 1921. The Uncertainty-bearing Theory of Profit is an improvement and refinement of Hawley's Risk Theory of Profit. 
Knight distinguishes between risk and uncertainty. risk refers to situations in which the statistical probability of an outcome can be determined, and therefore the outcome can be reduced to naughty (nil) by insuring., uncertainty refers to situations whose probability of an event cannot be known.
Four weaknesses of Uncertainty Bearing Theory of Profit are;
a. Lack of quantitative analysis: The Uncertainty Bearing theory is qualitative and difficult to apply in practice due to the lack of a quantitative framework for measuring uncertainty and risk.
b. Limited explanation of profit: Uncertainty-bearing theory only accounts for one aspect of profit and overlooks other factors such as market conditions, supply and demand, and economies of scale.
c. High emphasis on the role of the entrepreneur: The Uncertainty bearing theory gives too much emphasis on the role of the entrepreneur and ignores other factors such as organizational structure, management, and access to resources.
d. Incomplete theory: Profit is not rewarded only for bearing uncertainty. There are also many causes of profit such as initiating, coordinating, barging, etc.

14. Give the answer of following questions on the basis of given table.
Output 1 2 3 4 5 6
TC
AC 
MC
8
-
-
14
7
-
18
-
-
28
-
10
45
9
-
72
-
27
1. Complete the above table 
Answer:

    Output

    TC

    AC

    MC

    1

    2

    3

    4

    5

    6

    8

    14

    18

    28

    45

    72

    8

    7

    6

    7

    9

    12

     -

    6

    4

    10

    17

    27

2. Draw AC & MC curves from the completed table. 

15. 'A monopoly firm can sell as many goods as it wants to sell by decreasing prices. Based on this information, prepare a table showing the firm's total revenue, average revenue, and marginal revenue. Draw the curves of average revenue and marginal revenue based on the table. 
Answer:

Price

Quantity

TR

AR

MR

12

10

8

6

4

2

0

1

2

3

4

5

0

10

16

18

16

10

-

10

8

6

4

2

-

10

6

2

-2

-6

The above schedule can be represented in the diagram as follows:

In the given figure, MR is the marginal revenue curve and AR is the average revenue curve. The average revenue curve is downward sloping. it means, to sell more quantity, the price should be reduced MR curve also slopes downward but lies below AR.

16. Define money market and describe any four features of it. 
Answer:
                 
The market where short-term financial instructions are traded is said to be Money Market.
Treasury bills, certificates of deposit, and other commercial bills are financial instructions.
Features of Money Market are;
a. Maturity period: Maturity period is the period where the money market deal in the lending and borrowing of short-term finance.
b. Credit Instruction: The instruction of the money market are treasury bills, certificates of deposit, commercial bills, etc. which are of short-term nature.
c. Risk: In the money market, the degree of risk is small because the maturity period of credit instructions is one year or less.
d. Institutions: Central banks, commercial banks, bill brokers, non-bank financial institutions, etc. are important institutions operating in the money market. 
e. Linked with central Bank: Money market is directly linked with the central bank of the country, and it has a closed relationship with the central bank of the country.

17. Currently, increasing economic inequality in Nepal has adversely affect the social, political, and whole economic sectors of the country. Suggest any five measures to reduce this situation.
Answer:
              Inequality is defined as the situation in which income and wealth are distributed unevenly among the people of a country. It is also known as income inequality. 
Five measures to reduce inequality in Nepal are mentioned below; 
a. Creating employment opportunities: As in developing countries; Nepal, Bhutan, Pakistan, etc. There is a high rate of unemployment and underemployment. The unemployed have no income and the unemployed have very little income. It creates inequality in society. Government should take special initiatives to solve unemployment and unemployment problems. The government should promote commercial agriculture and small industries to reduce inequality in the nation.  
b. Control high population growth: High population growth leads to high inequality in a nation. Therefore, controlling high population growth is essential to reduce inequality. High population growth can be controlled by providing employment opportunities for women, educating women and men about population growth, and imparting family planning knowledge to couples. 
c. Infrastructure Development: The main way to reduce inequality in the nation is through infrastructure development. Development of infrastructure such as roads, highways, ports, communication, irrigation, financial institutions, etc. It can create employment opportunities for local or poor villagers and expand their local market. It increases the income of low-income groups and reduces inequality in society and the nation. 
d. Agricultural development: Most of people in developing countries are involved in agriculture. But they cannot adopt agriculture from a commercial point of view only for livelihood. The government should sensitize the farmers about the benefits of commercial agriculture and the methods of farming and how to increase the growth of agriculture. By increasing government investment in irrigation, the growth rate of agriculture can be accelerated by ensuring adequate access to credit for small farmers. This will reduce inequality. 
e. Equal access to education, health, training, and opportunities: Developing countries do not have equal access to education, health, training, and opportunities. Therefore, not all people get the same opportunity to improve their economic situation. People who can get better education and training can get better jobs with higher salaries. On the other hand, people born into poor families may not get good education and training, earn high wages, or remain unemployed. Also, it turns into inequality. It is therefore essential to provide equal access to education, health, training, and opportunities to reduce inequality. 


18. Nepal has a long history of formulation and implementation of development plans. But there is no sufficient development. In this regard, suggest the steps to formulate an effective development plan in Nepal. 
Answer:
                  I suggest some step to formulate an effective development plan in Nepal which is mentioned below; 

a. Study and estimate post-new plan plans: The first step in formulating the plan is to study the previous plan and existing plans that give a clear idea of the new plans. In this step, the planning process for studying various aspects of the economy should change deprivation while improving unsuccessful plans. 
b. Collecting and presenting a new draft proposal: this is the second step in formulating the plan in Nepal. Each project of the Provincial Development Commission in each of the country's provinces collected by the Planning Authority, the lower-level Government, also sent a proposal through its ministers. 
c. Goals: Another step in formulating the plan is to determine goals. The goals should be specific and clear and should be linkages to reduce poverty, inequality and increase employment opportunities. 
d. Targeting: The objective of the plan should be set for a decent development plan that guides public activities during the proposed plan period. When a target is enumerated, it is converted to the target. For example, the goals of plan fifteenth are to achieve sustainable and inclusive economic growth through poverty alleviation, and the aim is to increase economic growth from 6.8 percent to 10.3 percent by alleviating poverty from 18.7 percent to 9.5 percent. 
e. Determining the growth rate: This is the next step in the plan formulation process. The growth rate is determined by available resources such as natural resources, capital resources, human resources and the need of the national economy. There is no simple way to determine the growth rate of the economy because it is a function of society's ability and willingness to sacrifice for future development.

19. Find the standard deviation from the given data and interpret the result.

Wages Rs.

No. of labour

45

55

65

75

80

8

7

3

2

4

Or,

Find Price Index using Laspeyre’s formula and interpret the result.

Types of goods

Base year

Current year

Price

Quantity

Price

Quantity

Rice

Flour

Potato

Oil

Milk

70

40

30

200

30

15

5

10

7

5

80

45

35

250

35

20

7

12

5

4

Answer:






Group “C”
Long Answer Questions: [3x8= 24]
20. Illustrate the price and out determination process under perfect competition and show the situation of short-run equilibrium of the firm by MR-MC approach
Answer:
        Short run refers to a period of time that is so short that firms cannot change certain factors such as plant and machinery. Therefore, a firm cannot change its production process. Under best competition, firms accept prices set by the industry. More efficient firms can make abnormal profits by reducing their average costs, and inefficient firms can incur losses. Some firms make only abnormal profits. This indicates that in the short term, firms will make abnormal profits, normal profits, and even losses.
a. If AR >AC, the firms earn abnormal profit.
b. If AR=AC, the firms earn normal profit.
c. If AR A<C, the firms bear loss. 

Condition of Equilibrium
Market price should be equal to market demand.
MC=MR
MC must be interested MR from below.

Equilibrium the Industry  
        ln, the given figure 'I' represents the balance of the industry. In the figure, the X-axis represents the output and the Y-axis represents the value. The downward-sloping curve is the DD demand curve and the upper slope curve is the SS supply curve. These two curves intersect at point E, which is the point of equilibrium. Therefore, the equilibrium price and quantity determined by the industry are OP and OQ respectively. Since fully competitive firms charge a price, all firms must sell their products at OP.
a. Abnormal profit (Super normal profit/ Excess profit):  The figures show the firm's abnormal profits. The firm makes abnormal profits when it is larger than AR AC (AR > AC). In this figure. E is the equilibrium point because at this point MR and MC are equal and the MC curve intersects the MR curve from the bottom. Therefore, OQ is the equilibrium quantity of output determined by the firm. The firm has made abnormal profits equivalent to the shaded rectangle area AEPC because AR is larger than AC and the average cost of production is OC.
Total revenue (TR)=OQEP 
Total Cost (TC)= OQAC
Total profit (π) = TR-TC
Total profit=OQEP-OQAC =AEPC

b. Normal profit: In the given figure, firm E is in equilibrium at point E because at this point MC is intersecting MR from below. The equilibrium output determined by the firm is OQ. In this output, the firm has made only a modest profit because AR and AC are equal. Normal profit is the profit that is enough to run the business.

c. Loss:  In the given figure is in equilibrium at the point E because at this point both conditions of equilibrium are fulfilled. The equilibrium output determined by the firms is OQ. At this output, AC is greater than AR or the price (OP). Therefore, the firms s bearing loss equal to the shaded area EACP.
Total revenue (TR)= OQEP
Total cost (TC)= OQEP
Total profit (π)= TR-TC 
Total profit (π)= OQEP-OQAC= -AEPC

21. The comparative advantage theory of international trade s related to the need for international trade. Every country imports goods if their cost of production is high in country. Explain with suitable example.



22. Foreign employment is a way to solve the unemployment problem for developing countries like Nepal. However, from this, such countries will have to face various problem in future. Considering such possible problem, explain your ideas in four points for each.


Or, 
Prioritize and list out any four major SDGs of UN that directly relevant to Nepal. Why these aims should be prioritized in Nepalese context? Clarify.




Group C and Other incomplete Question answers soon be available 

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