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					                           DRUKGYEL HIGHER SECONDARY SCHOOL
                                   Trial Examnation-2011
                                    ECONOMICS (XII)
                                          (Three hours and a quarter)
  (The first 15 minutes are for reading the paper only. Candidates must NOT start writing during this time).
             Answer Question 19 Compulsory) from Part I and any SEVEN questions from Part II.
                                  The intended marks are given in brackets [ ].

                        PART I- Compulsory [30 marks-2 x 15=30 marks]
Question 1
  i. What do you understand by the term „Micro Economics‟?     [2]
   ii. Explain any two determinants of supply other than the “price of the commodity”. [2]
   iii. “VMP is equal to MRP under perfect competition “. Is this also true in case of imperfect
       competition? Why?                                             [2]
   iv. What do you understand by “Law of Demand”? Illustrate it with a labeled diagram.[2]
   v. Define Oligopoly .Explain one of its characteristics.                         [2]
   vi. How can we avoid „double counting‟ in the calculation of national income? Write two methods.[2]
   vii. Write two differences between the final goods and the intermediate goods.           [2]
   viii. Which of the national income aggregates is technically known as national income? Define it.      [2]
   ix. Is current account same as balance of trade? Give one reason to validate your answer.              [2]
   x. How is balance of trade different from balance of payment?             [2]
   xi. Differentiate between rolling budget and supplementary budget in the context of the Bhutanese
       economy.                                               [2]
   xii. Give one difference between expenditure on urbanization and expenditure on administrative
       machinery.                                   [2]
   xiii. Distinguish between incidence and impact of taxation.               [2]
   xiv. Some of the objectives are seen to be similar in the both Seven Five Year Plan and Eight Five Year
       Plan of our country. Mention two such objectives.                     [2]
   xv. State any two important needs of planning in Bhutan.                         [2]

                                              PART II
                               (Answer any SEVEN questions)[70 Marks]
Question 2
  a. Describe marginal productivity Theory of Distribution using an appropriate diagram.                  [5]
   b. Briefly explain how national income is calculated using income method.                              [5]

Question3
   a. With the help of labelled diagrams, explain what would happen to the equilibrium price and quantity
       if:
       i.     Demand and supply increases by the same proportion, and
       ii.    Demand increases in larger proportion than the increase in supply.[5]

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   b. Describe the Theory of Absolute Cost as a basis for international trade.                            [5]

Question 4
   a. Define and explain the law of variable proportions using an appropriate diagram.                    [5]
   b. If you are entrusted with the responsibility of correcting the    unfavorable balance of payments
       situation in our economy, mention five methods you would adopt.                           [5]

Question 5
   a. With the help of a diagram, explain the short-run equilibrium of a firm under perfect competition
       earning super-normal profit.                  [5]
   b. How can fiscal policy bring about economic growth and equal distribution of wealth and income in
       an economy?                           [5]

Question 6
   a. State five differences between Utility Approach and Indifference Curve Analysis.                    [5]
   b. Explain circular flow of income and expenditure in the Three sector Model using a diagram.          [5]

Question 7
   a. Public Debt (Public borrowing) and deficit Financing are the two methods of meeting financial needs
       of a country. Briefly explain two positive effects and two negative effects of each.               [5]
   b. From the First five year Plan to Fifth Five Year Plan, identify one most important priority opted by
       the Government from each plan and give reasons for each priority.                                  [5]

Question 8
   a. Write three merits and two demerits of indirect taxes.                       [5]
   b. What are the differences between international trade and internal trade? Write five differences.    [5]

Question 9
   a. Critically examine the Ricardian Theory of Rent.                             [5]
   b. “GNH is a better measure than GDP in promoting the happiness of the people”. Do you agree? Five
       reasons and explain them.                     [5]

Question 10
   a. Discuss the reasons as to why does demand curve slope from left to right upwards.                   [5]
   b. Explain five methods of redemption of public debt.                    [5]




DHSS/Trial/12Eco/2011                     Page 2                   There are 2 printed pages

				
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