{"id":6410,"date":"2023-11-29T05:15:15","date_gmt":"2023-11-28T23:45:15","guid":{"rendered":"https:\/\/icsesolutions.com\/?p=6410"},"modified":"2023-11-30T09:46:46","modified_gmt":"2023-11-30T04:16:46","slug":"icse-previous-papers-solutions-class-10-economic-applications-2011","status":"publish","type":"post","link":"https:\/\/icsesolutions.com\/icse-previous-papers-solutions-class-10-economic-applications-2011\/","title":{"rendered":"ICSE Economic Applications Question Paper 2011 Solved for Class 10"},"content":{"rendered":"
ICSE Paper 2011<\/strong><\/span> (Two Hours)<\/strong><\/em> SECTION-I \u00a0(40 Marks)<\/span><\/strong> Question 1:<\/strong> Answer:<\/strong> (b)<\/strong> Dividing the work according to the capability of a person is known as division of labour to accomplish the work successfully, the complicated work is divided into smaller simple segments and accordingly the labour is engaged to perform the task relating to each segment. Thus, a worker is required to perform only one specific type of work and its regular repetition improves his skill and efficiency as a result the cost of production per unit reduces.<\/p>\n (c)<\/strong> A sustained rising trend in general price level is known as inflation and if there is a sustained rise in price over time at a mild or moderate rate say round 1 to 2 percent per year it is desirable for the development of an economy because if price will increase, profit will increase, more profit will lead to higher production of goods and services, which increases national income and enhance economic develops.<\/p>\n (d)<\/strong> Complementary goods are those goods which are used jointly and consumed together like tennis ball and a racket, petrol and car. The relationship between the price of a product and the quantity demanded of another is inverse. For example if the price of cars were to rise, less people would choose to buy and use cars, switching perhaps to public transport trains. It follows that under these circumstances the demand for the complementary good petrol would also decrease.<\/p>\n (e) Personal saving:<\/strong> The main factor that determines capital formation in a country is personal saving. By personal saving we mean the difference between personal income and personal consumption. The difference can be utilised for capital formation.<\/p>\n Question 2:<\/strong> Answer:<\/strong>
\nECONOMIC APPLICATIONS<\/span><\/p>\n
\nAnswers to this Paper must be written on the paper provided separately.<\/em>
\nYou will not<\/strong> be allowed to write during the first 15<\/strong> minutes.<\/em>
\nThis time is to be spent in reading the Question Paper.<\/em>
\nThe time given at the head of this Paper is the time allowed for writing the answers.<\/em>
\nSection I<\/strong> is compulsory. Attempt any four<\/strong> questions from Section II<\/strong>.<\/em>
\nThe intended marks for questions or parts of questions are given in brackets [ ].<\/em><\/p>\n
\n(Attempt all<\/strong> questions from this Section)<\/em><\/p>\n
\n(a)\u00a0<\/strong>Mention two assumptions of the law of demand. [2]<\/strong>
\n(b)<\/strong> Briefly explain the impact of division of labour on cost of production by a firm. [2]<\/strong>
\n(c)<\/strong> A moderate dose of inflation is necessary for the development of an economy. Briefly explain. [2]<\/strong>
\n(d)<\/strong> With the help of suitable example explain the effect of a rise in price on the demand for complementary goods. [2]<\/strong>
\n(e)<\/strong> Explain in brief the first stage of capital formation. [2]<\/strong><\/p>\n
\n(a)<\/strong> Two Assumptions of Law of Demand:<\/strong><\/p>\n\n
\nState whether the following statements are true or false. Give reasons for each of the following:
\n(a)<\/strong> Commercial Banks act as the lender of the last resort. [2]<\/strong>
\n(b)<\/strong> The privatisation of PSUs do not guarantee social welfare. [2]<\/strong>
\n(c)<\/strong> Producers in a perfect market are price takers. [2]<\/strong>
\n(d)<\/strong> There is an inverse relationship between quantity supplied and price of a commodity. [2]<\/strong>
\n(e)<\/strong> A rise in income leads to a fall in demand for normal goods. [2]<\/strong><\/p>\n
\n(a) False:<\/strong> Commercial bank do not act as the lender of the last resort. It is the Central Bank who provides financial help to the Commercial Banks in the time of emergency that is why \u2018central bank\u2019 of the country acts as a \u2018lender of last resort\u2019 for the commercial bank. Commercial banks are the unique financial institutions in modem economies which are able to create money in the form of deposit money.
\n(b) True:<\/strong> The privatisation of public sector units do not guarantee social welfare because if the major industries are left in the hands of the private sector, they can make them the tools of exploitation of masses and endanger the safety of the country. Private entrepreneurs work with profit motives. The ownership of industries will entail them the right to exploit the consumers and wage earners on the one hand and suppliers of raw materials and finished products on the other.
\n(c) True:<\/strong> Producers in a perfect market are price takers because no single firm or single consumer can influence the price because of its negligible share in total supply. As product offered by producer is homogeneous. However, price is determined by the collective actions of all the consumers.
\n(d) False:<\/strong> Price of a commodity and quantity supplied have direct relationship not inverse. Supply comes from producer side and it is natural for the seller to offer more of a commodity as price ascends and less of a commodity as price decreases because as price increases his profit also increases and vice-versa.
\n(e) False:<\/strong> A rise in income level does not lead to a fall in demand for normal good rather with a rise in income, the purchasing power of people also increases, which in turn encourages the people to demand more of luxuries and comforts.<\/p>\n