CBSE Guess > Papers > Important Questions > Class XII > 2012 > Economics > Economics By Mrs. Kritika Bhola
Economics - CBSE CLASS XII
Q .54 istinguish between decrease in demand and contraction in demand.
Ans : Same as above
Q . 55. State 3 reasons for rightward shift in demand curve.
Ans : 1. When income of consumer increases.
2. when price of substitute good increases.
3. Increase in no. of consumers.
Q. 56 . State 3 reasons for leftward shift in the demand curve.
Ans: 1. When income of consumer falls.
2. When price of substitute good decreases.
3. Decrease in no. of consumers
Q 57 . Explain the geometric method of measuring price elasticity of demand.
Ans : Geometric method measures elasticity of demand at different points on the demand curve. It is also called ‘point method of measuring elasticity of demand
MN is a straight line demand curve sloping downward .It shows that when price is zero, qty. is ON and when price is OM, qty. is zero. P divides the demand curve in two segments – upper and lower
Q 58 . Explain 3/4 factors that affect elasticity of demand.
Ans : 1.Nature of commodity : Necessaries ( salt, sugar, etc.) and jointly demanded goods ( car and petrol) have inelastic demand as change in prices do not effect their demand. Luxuries have elastic demand
2 Availability of substitutes : Demand for goods which have substitutes is more elastic because when price of a commodity falls in relation to its substitute its demand rises.
3 Income of consumer : People whose income is very high or very low , their demand is inelastic as rise and fall in prices do not effect their demand.
Q 59. What will be the elasticity of demand in the following cases-
1 A rise in the price of the commodity increases the total expenditure on it.
Less than unitary elastic.
2 A rise in the price of the commodity reduces the total expenditure on it.
Greater than unitary elastic
3 A change in price of the commodity does not change the total expenditure on it.
Ans : Unitary elastic
Q 60 .How does the availability of substitutes affect the price elasticity of demand?
Ans : Demand for goods which have substitutes is more elastic because when price of a commodity falls in relation to its substitute its demand rises. The consumers will buy more of it in place of its substitute.Q 61. A dentist was charging Rs 300 for a standard cleaning job per month and used to generate Rs 30000. She had increased her price of dental cleaning to Rs 350. As a result of this the total revenue generated was Rs 33250. What can you conclude about elasticity of demand of her dental service?
Ans : Ed < 1 because as the price increases the demand also increases.
Q 62 : A consumer buys 1000 units at Rs 10 per unit. When the price falls he buys 1400 units. If the price elasticity is – 2, what is the new price?
Ans : 
-2=
; ΔP= -2
Price is Rs. (10 – 2) = Rs.
Q 63. The market price of good changes from Rs 5 to Rs 4. As a result the demand increases by 12 units. If the price elasticity is – 1.5, find the initial and final quantity demanded.
Ans : 
Q= 40 units
New Quantity demanded is 52 units.
Q 64. With the rise in the price by Rs 5, the quantity demanded changes from 100 to 95 units. The price elasticity of demand is – 1.2. Find out price before change.
Ans: 
Price is Rs 120/-
Q 65 Calculate price elasticity using Total Expenditure method
Price of commodity X |
Quantity Demanded of X |
8 |
100 |
10 |
90 |
Price of commodity Y |
Quantity Demanded of Y |
8 |
100 |
10 |
80 |
Total Expenditure in case of X is 800 and 900
Elasticity of demand for X is < 1 as in response to rise in price, expenditure has also increased though qty. demanded is reduced.
Total exp. For Y is 800 and 800
For Y it is = 1 as with increase in price, exp. is the same even though qty. demanded is reduced.
Q 66 . When the price of the commodity is Rs 20 per unit, quantity demanded is 800 units. When the price falls by 10%, quantity demanded rises to 1080 units. Calculate the price elasticity of demand.
Ans: 
Q 67 . Price elasticity of demand is -2. The consumer buys some quantity of the commodity is Rs 8 per unit. When the price falls he buys 50 % more of the quantity. What is the new price?
Ans : 
-2 = New price is 8 – 2= Rs. 6.
Q 68. Price elasticity of demand is -3. If the price rises from Rs 10 to 12 per unit, what is the percentage change in demand?
Ans : 
x = % change in demand = 60%
Q 69. Price elasticity of a commodity is -1. The consumer buys 50 units when price is Rs 2 per unit. How many units will the consumer buys if the price is Rs 4 per unit. Find out elasticity of demand using total expenditure method?
Ans : When he buys 50 units for Rs. 2 /unit , his total expenditure is Rs. 100.
Ed= 1, i.e, demand is unitary elastic so total expenditure will not change.
He will buy 25 units if the price is Rs. 4
Prepared By: Mrs. kritika bhola
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