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TN State Board 11th Economics Model Question Paper 4 English Medium

Instructions:

  1.  The question paper comprises of four parts.
  2.  You are to attempt all the parts. An internal choice of questions is provided wherever applicable.
  3. questions of Part I, II. III and IV are to be attempted separately
  4. Question numbers 1 to 20 in Part I are objective type questions of one -mark each. These are to be answered by choosing the most suitable answer from the given four alternatives and writing the option code and the corresponding answer
  5. Question numbers 21 to 30 in Part II are two-marks questions. These are to be answered in about one or two sentences.
  6. Question numbers 31 to 40 in Parr III are three-marks questions, These are to be answered in about three to five short sentences.
  7. Question numbers 41 to 47 in Part IV are five-marks questions. These are to be answered) in detail. Draw diagrams wherever necessary.

Time: 3 Hours
Maximum Marks: 90

Part – I

Choose the correct answer. Answer all the questions: [20 × 1 = 20]

Question 1.
The first person used the mathematics in economics is ………………..
(a) Sir William Petty
(b) Giovanni Ceva
(c) Adam Smith
(d) Irving Fisher
Answer:
(a) Sir William Petty

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 2.
Countries today are to be ……………….. for their growth.
(a) Dependent
(b) Interdependent
(c) Free trade
(d) Capitalist
Answer:
(b) Interdependent

Question 3.
Abstinence Theory of Interest was propounded by …………………
(a) Alfred Marshall
(b) N W Senior
(c) Bohm – Bawerk
(d) Knut Wicksell
Answer:
(b) N W Senior

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 4.
The main aim of the firm as ………………..
(a) Product maximisation
(b) Profit maximisation
(c) Saving maximisation
(d) Investment maximisation
Answer:
(b) Profit maximisation

Question 5.
First world war started in the year ………………..
(a) 1914
(b) 1814
(c) 1941
(d) 1841
Answer:
(a) 1914

Question 6.
In 1614, Sir Thomas Roe was successful in getting permission from ………………..
(a) Akbar
(b) Shajakhan
(c) Jahangir
(d) Noorjakhan
Answer:
(c) Jahangir

Question 7.
The PQLI was developed by ………………..
(a) Planning commission
(b) Nehru
(c) Morris
(d) Biswajeet
Answer:
(c) Morris

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 8.
The process of improving the rural areas, rural people and rural living is defined as . ………………..
(a) Rural economy
(b) Rural economics
(c) Rural employment
(d) Rural development
Answer:
(d) Rural development

Question 9.
Who among the following propagated Gandhian Economic thinkings?
(a) Jawaharlal Nehru
(b) V.K.R.V. Rao
(c) J.C. Kumarappa
(d) A.K. Sen
Answer:
(c) J.C. Kumarappa

Question 10.
The New Foreign Trade Policy was announced in the year ………………..
(a)2000
(b) 2002
(c) 2010
(d) 2015
Answer:
(d) 2015

Question 11.
“An Indian farmer is bom in debt; lives in debt, dies in debt and bequeaths debt” – who said this?
(a) Adam Smith
(b) Gandhi
(c) Amartya Sen
(d) Sir Malcolm Darling
Answer:
(d) Sir Malcolm Darling

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 12.
Which of the following is a feature of monopolistic competition?
(a) One seller
(b) Few sellers
(c) Product differentiation
(d) No entry
Answer:
(c) Product differentiation

Question 13.
The main source of irrigation in Tamil Nadu is ………………..
(a) River
(b) Tank
(c) Well
(d) Canals
Answer:
(c) Well

Question 14.
What is the term used to denote the co – existence of two different features in an economy?
(a) Technology
(b) Dependency
(c) Dualism
(d) Inequality
Answer:
(c) Dualism

Question 15.
A statement of equality between two quantities is called ………………..
(a) Inequality
(b) Equality
(c) Equations
(d) Functions
Answer:
(c) Equations

Question 16.
In health Index, Tamil Nadu is ahead of ………………..
(a) Kerala
(b) Punjab
(c) Gujarat
(d) All the above
Answer:
(c) Gujarat

Question 17.
The first differentiation of Total Revenue function gives ………………..
(a) average revenue
(b) profit
(c) marginal revenue
(d) zero
Answer:
(c) marginal revenue

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 18.
The arguments against LPG is ………………..
(a) economic growth
(b) more investment
(c) disparities among people and regions
(d) modernizations
Answer:
(c) disparities among people and regions

Question 19.
Suppose D = 50 – 5P. When D is zero then ………………..
(a) Pis 10
(b) P is 20
(c) Pis5
(d) P is – 10
Answer:
(a) Pis 10

Question 20.
In which market form does absence of competition prevail?
(a) Perfect competition
(b) Monopoly
(c) Duopoly
(d) Oligopoly
Answer:
(b) Monopoly

Part – II

Answer any seven questions in which Question No. 30 is compulsory. [7 × 2 = 14]

Question 21.
State the various components of central sector schemes under post-harvest measures.
Answer:

  • Mega food parks, Integrated cold chain, Value Addition Preservation, Infrastructure and modernization of slaughter house.
  • Scheme for quality Assurance, Codex Standards Research and Development and other promotional activities.

Question 22.
Define “ Excess capacity”.
Answer:

  • Excess capacity is the difference between the optimum output that can be produced and the actual output produced by the firm.
  • In the long run, a monopolistic firm produces delibourately output which is less than the optimum output that is the output corresponding to the minimum average cost.
  • This leads to excess capacity which is actually a waste in monopolistic competition.

Question 23.
Name out the different types of land tenure existed in India before independence.
Answer:
The three different types of land tenure existed in India before independence. They were:

  • Zamindari System (or) Landlord – Tenant System
  • Mahalwari System (or) Communal System of farming
  • Ryotwari System (or) the owner Cultivator System

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 24.
What are the renewable sources of power in Tamil Nadu?
Answer:

  • Tamil Nadu tops in power generation among the southern States as seen in following table.
  • Installed capacity of power utilities in States in southern region.
  • Tamil Nadu is in the forefront of all other Indian States in installed capacity.
  • Muppandal wind farm is a renewable energy source, supplying the villagers with electricity for work.
  • Wind farms were built in Nagercoil and Tuticorin apart from already existing ones around Coimbatore, Pollachi, Dharapuram and Udumalaipettai.
  • These areas generate about half of India’s 2,000 megawatts of wind energy or two percent of the total power output of India.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 1

Thermal Power:

  • In Tamil Nadu the share of thermal power in total energy sources is very high and the thermal power plants are at Athippattu [North Chennai] Ennore, Mettur, Neyveli and Thoothukudi.
  • The generation of power under various sources is given below.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 2

Hydel Energy:

  • There are about 20 hydro-electric units in Tamil Nadu.
  • The prominent units are Hundah, Mettur, Periyar, Maravakandy, Parson Valley etc.

Solar Energy:
Tamil Nadu tops in solar power generation in India as seen in following table:
Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 3

Southern Tamil Nadu is considered as one of the most suitable regions in the country for
developing solar power projects.

Wind Energy:

  • Tamil Nadu has the highest installed wind energy capacity in India.
  • The State has very high quality of offshore wind energy potential off the Tirunelveli coast
    and southern Thoothukudi and Rameswaram coast.

Question 25.
Write a short note on village sarvodhaya.
Answer:

  • According to Gandhi, “Real India was to be found in village and not is towns or cities”.
  • So he suggested the development of self-sufficient self-dependent villages.

Question 26.
State the production Function.
Answer”
Production function refers to the relationship among units of the factors of production [in puts] and the resultant quantity of a good produced [out put].
According to George J. Stigler,” Production function is the relationship between inputs of productive services per unit of time and outputs of product per unit of time.

Question 27.
What is profit?
Answer:

  • The entrepreneur coordinates all the other three factors (land, labour and capital) of production.
  • Entrepreneur is rewarded for his services in the form of profit.
  • Profit is a return to the entrepreneur for the use of his entrepreneurial ability.
  • It is the net income of the organizer.
  • Profit is the amount left with the entrepreneur after he has payments made for all the other factors (land, labour and capital) used by him in the production process.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 28.
Mention the indicators which are used to calculate HDI.
Answer:
HDI is based on the following three indicators:

  • Longevity is measured by life expectancy at birth.
  • Educational attainments.
  • Standard of living is measured by real GDP per Capita [PPP $].

Question 29.
What are Giffen goods? why?
Answer:
Giffen Paradox: The Giffen good or inferior good is an exception to the law of demand. When the price of an inferior goods, falls, the poor will buy less and vice versa.

Question 30.
Rural poverty – Define.
Answer:

  • Rural poverty refers to the existence of poverty in rural areas.
  • Poverty in India has been defined as the situation in which an individual fails to earn sufficient income to buy the basic minimum of subsistence.
  • On the basis of recommended nutritional intake, persons consuming less than 2400 calories per day in rural areas are treated as they are under rural poverty.

Part – III

Answer any seven questions in which Question No. 40 is compulsory. [7 × 3 = 21]

Question 31.
Explain the scarcity definition of Economics and assess it.
Answer:

  • Lionel Robbins published a book “An Essay on the Nature and Significance of Economic Science” in 1932.
  • According to him, “Economics is a science which studies human behaviour as a relationship between ends and scarce means which .have alternative uses.”

The major features of Robbins’ definition:

  • Ends refer to human wants.
  • Human beings have unlimited number of wants.
  • Resources or means that go to satisfy the unlimited human wants are limited or scarce in supply.
  • The scarcity of a commodity is to be considered only in relation to its demand.
  • Further the scarce means are capable of having alternative uses.
  • An individual grades his wants and satisfies first his most urgent want.
  • Economics, according to Robbins, is a science of choice.

Criticism:

  • Robbins does not make any distinction between goods conductive to human welfare and goods that are not.
  • Economics deals not only with the micro-economic aspects of resource-allocation and the determination of the price of a commodity.
  • Robbins’ definition does not cover the theory of economic growth and development.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 32.
Distinguish between explicit cost and Implicit cost.
Explicit Cost :

  1. Payment made to others for the purchase of factors of production is known as Explicit Costs.
  2. It refers to the actual expenditures of the firm to purchase or hire the inputs the firm needs.
  3. Explicit cost includes wages, payment of raw materials, rent for the building, interest for capital invested, expenditure on transport and advertisement, other expenses like licence fee, depreciation and insurance charges.

Implicit Cost :

  1. Payment made to the use of resources that the firm already owns, is known as Implicit Cost.
  2. Implicit Cost refers to the imputed cost of a firm’s self-owned and self employed resources.
  3. A firm or producer may use his own land, building, machinery, car and other factors in the process of production.

Question 33.
What are the crucial decisions involving ‘What is produced’?
Answer:
Every society much decide on what goods it will produce and how much of these it will produce.
In this process, the crucial decisions include:

  • Whether to produce more of food, clothing and housing or to have more luxury goods.
  • Whether to have more agricultural goods or to have industrial goods and services.
  • Whether to use more resources in education and health or to use more resources in military services.
  • Whether to have more consumption goods or to have investment goods.
  • Whether to spend more on basic education or higher education.

Question 34.
Enumerate the remedial measures to rural poverty. ,
Answer:

  • Since rural unemployment and rural poyerty are interrelated, creation of employment opportunities would support elimination of poverty.
  • Poverty alleviation schemes and programmes have been implemented, modified, consolidated, expanded and improved over time.
  • However, unemployment, begging, rag-picking and slumming continues.
  • Unless employment is given to all the people poverty cannot be eliminated.

Question 35.
Write a note on Foreign Investment Policy.
Answer:

  • Foreign Investment Policy measure has enhanced the Industrial competition and improved . business environment in the country.
  • Foreign Investment including FDI and FPI were allowed.
  • The government announced a specified list of high technology and high investment priority industries.
  • Automatic permission was granted for Foreign Direct Investment [FDI] upto 51% foreign equity.
  • The limit was raised to 74% and subsequently to 100% for many of these industries.
  • Foreign Investment Promotion Board [FIPB] has been set up to negotiate with international firms and approve foreign direct investment.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 36.
State any two districts with favourable sex ratio. Indicate the ratios.
Answer:
Population Growth in Tamil Nadu Districts at a (2011 census) Sex Ratio highest and lowest:
Sex Ratio (per 1000 males) District with highest
Tire Nilgiris (1041 females), Thanjavur (1031 females), Nagapattinam (1025 females)
Sex Ratio (per 1000 males) District with Lowest
Theni (900 females), Dharmapuri (946 females)

Question 37.
Write a note on Foreign Investment Policy.
Answer:

  • Foreign Investment Policy measure has enhanced the Industrial competition and improved business environment in the country.
  • Foreign Investment including FDI and FPI were allowed.
  • The government announced a specified list of high technology and high investment priority industries.
  • Automatic permission was granted for Foreign Direct Investment [FDI] upto 51% foreign equity.
  • The limit was raised to 74% and subsequently to 100% for many of these industries.
  • Foreign Investment Promotion Board [FIPB] has been set up to negotiate with international firms and approve foreign direct investment.

Question 38.
Mention the relationship between Marginal utility and Total utility.
Answer:

Marginal utility :

  1. Marginal utility goes on diminishing.
  2. Marginal utility becomes zero.
  3. Marginal utility becomes negative.

Total utility :

  1. Total utility goes on Increasing.
  2. Total utility maximum.
  3. Total utility diminishes.

Question 39.
Bring out the Relationship among Total, Average and Marginal Products.
Answer:
Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 4

Question 40.
State and explain the elasticity of supply.
Answer:

  • Elasticity of supply may be defined as the degree of responsiveness of change in supply to change in price on the part of sellers.
  • It is Mathematically expressed as,
    Elasticity of supply = Proportionate change in supply / Proportionate change in price
    Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 5

Where Qs represents the supply, P represents price , A denotes a change.

Part – IV

Answer all the questions. [7 × 5 = 35]

Question 41.
(a) Explain the law of equi-marginal utility.
Answer:
The law of the Equi-marginal utility:

  • The law of diminishing marginal utility is applicable only to the want of a single commodity.
  • The law of equi – marginal utility explains the behavior of a consumer when he consumer more than one commodity.
  • Wants are unlimited but the income which is available are limited.
  • This law explains how the consumer spends his limited income on various commodities to get maximum satisfaction.
  • Law of Equi – Marginal Utility is also known as the law of substitution.
  • “The law of consumer’s equilibrium ”
  • “Gossen’s second law ” and “ The law of maximum satisfaction”.

Definition:

Marshall states the law as If a person has a thing which he can put to several uses, he will distribute it among these uses in such a way that it has the same marginal utility in all. For, if it had a greater marginal utility in one use than another he would gain by taking away some of it from the second use and applying it to first”.

Assumption:

  • The consumer is rational in the sense that he wants to get maximum satisfaction.
  • The utility of each commodity is measurable in cardinal numbers.
  • The marginal utility of money remains constant.
  • The income of the consumer is given.
  • There is perfect competition in the market.
  • The prices of the commodities are given.
  • The law of diminishing marginal utility operates.

Illustration:
This law can be illustrated with the help of table. Let us assume that the consumer has a given income of ₹11. He wants to spend this entire income [i.e.₹11 ] on Apple and Orange. The price of an Apple and the price of an orange is ₹1 each.
Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 6

If the consumer wants to attain maximum utility, he should buy 6 units of apples and 5 units of oranges, so that she can get [92 + 58] = 150 units. No other combination of Apple and Orange can give higher than 150 utilities .
Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 7

Diagrammatic Illustration:

  • fn the diagram, X – axis represents the amount of money spent and Y-axis represents the marginal utilities of Apple and Orange respectively.
  • If the consumer spends ₹ 6 on Apple and ₹ 5 on Orange, the marginal utilities of both are equal, i.e. AA1 — BB1 [4 = 4], Hence, he gets maximum utility:

Criticisms:

  • In practice, utility cannot be measured, only be felt.
  • This law cannot be applied to durable goods.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

[OR]

(b) Explain the Internal and External economies of scale.
Answer:
Internal Economics of Scale:

  • Internal Economies of scale refers to the advantages enjoyed by the production unit which causes a reduction in the cost of production of the commodity.
  • For example, a firm enjoying the advantage of an application of most modem machinery, generation of internal capital, an improvement in managerial skill etc. are sure to reduce the cost of production. They are of various types:

(a) Technical Economies:

  • When the size of the firm is large, large amount of capital can be used.
  • There is a possibility to introduce up-to-date technologies; this improves productivity of ‘ the firm.
  • Research and development strategies can be applied easily.

(b) Financial Economies:
Big firms can float shares in the market for capital expansion, while small firms cannot easily float shares in the market.

(c) Managerial Economies:
Large scale production facilitates specialization and delegation.

(d) Labour Economies:

  • Large scale production implies greater and minute division of labour.
  • This leads to specialization which enhances the quality.
  • This increases the productivity of the firm.

(e) Marketing Economies:

  • In the context of large scale production, the producers can both buy raw-materials in bulk at cheaper cost and can take the products to distant markets.
  • They enjoy a huge bargaining power.

(f) Economies of survival:

  • Product diversification is possible when there is large scale production.
  • This reduces the risk in production.
  • Even if the market for one product collapses, market for other commodities offsets it.

External Economies of Scale:

  • External Economies of Scale refer to changes in any factor outside the firm causing an improvement in the production process. ,
  • This can take place in the case of industry also.
  • These are the advantages enjoyed by all the firms in industry due to the structural growth.

Important external economies of scale are listed below :

  1. Increased transport facilities
  2. Banking facilities
  3. Development of townships
  4. Development of information and communication.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 42.
(a) Explain various divisions of Economics.
Answer:
Economics sub divisions are:

(i) Consumption:

  • Human wants coming under consumption is the starting point of economic activity.
  • In this section the characteristics of human wants based on the behaviour of the consumer, the diminishing marginal utility and consumer’s surplus are dealt with.

(ii) Production:

  • Production is the process of transformation of inputs into output.
  • This division covers the characteristics and role of the factors of production namely land, labour, capital and organization.

(iii) Exchange:

  • Exchange is concerned with price determination in different market forms.
  • This division covers trade and commerce.
  • Consumption is possible only if the produced commodity is placed in the hands of the consumer.

(iv) Distribution:

  • Production is the result of the coordination of factors of production.
  • Since a commodity is produced with the efforts of land, labour, capital and organization, the produced wealth has to be distributed among the cooperating factors.
  • The reward for factors of production is studied in this division under rent, wages, interest and profit.
  • Distribution studies about the pricing of factors of production.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

[OR]

(b) Discuss about the Indian Economy during British period.
Answer:
Indian Economy during the British period:

  • India’s sea route trade to Europe started only after the arrival of Vasco da Gama in Calicut, India on May 20, 1498.
  • The Portuguese had traded in Goa as early as 1510.
  • In 1601 the East India Company was chartered, and the English began their first inroads into the Indian ocean.
  • In 1614 Sir Thomas Roe was successful in getting permission from Jahangir for setting up factories and slowly moved all parts of India.
  • Hundred years after Battle of Plassey, the rule of the East India Company finally did come to an end.
  • In 1858, British Parliament passed a law through which the power for governance of India was transferred from the East India Company [EIC] to the British Crown.
  • Even the transfer of power from the East India Company to the British Crown did not materially alter the situation.
  • Britain had exploited India over a period of two centuries of its colonial rule.

On the basis of the form of colonial exploitation, economic historians have divided the whole period into three phases:

  • The period of merchant Capital
  • The period of Industrial Capital
  • The period of Finance Capital.

Question 43.
(a) Describe briefly the Innovation Theory of Profit.
Answer:
Innovation Theory of Profit:

  • Innovation theory of profit was propounded by Joesph. A. Schumpeter.
  • Schumpeter says an entrepreneur is not only an undertaker of a business, but also an innovator in the process of production.
  • Profit is the reward for “innovation”.

According to Schumpeter, an innovation may consist of the following:

  •  Introduction of a new product.
  •  Introduction of a new method of production.
  • Opening up of a new market.
  • Discovery of new raw materials
  • Reorganization of an industry / firm.

When any one of these innovations is introduced by an entrepreneur, it leads to reduction in the cost of production and thereby brings profit to an entrepreneur.

To obtain profit continuously, the innovator needs to innovate continuously. The real • innovators do so. Imitative entrepreneurs cannot innovate.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

[OR]

(b) Explain the strong features of Indian economy.
Answer:
Strengths of Indian Economy:
1. India has a mixed economy:

  • Indian economy is a typical example of mixed economy.
  • This means both private and public sectors co-exist and function smoothly.
  • The fundamental and heavy industrial units are being operated under the public sector.
  • The liberalization of the economy, the private sector has gained importance.
  • This makes it a perfect model for public-private partnership.

2. Agriculture plays the key role:

  • Agriculture being the maximum pursued occupation in India.
  • It plays an important role in its economy as well.
  • Around 60% of the people in India depend upon agriculture for their livelihood.
  • In fact, about 17% of our GDP today is contributed by the agriculture sector.
  • Green revolution, ever green revolution and inventions is bio technology have made agriculture self sufficient and also surplus production.
  • The export of agriculture products such as fruits, vegetables, spices, vegetable oils, tobacco, animal skin, etc. also add to forex earning through international trading.

3. An emerging market:

  • Indian has emerged as vibrant economy sustaining stable GDP growth rate even in the midst of global downtrend.
  • This has attracted significant foreign capital through FDI and FII.
  • India has a high potential for prospective growth.
  • This also makes it an emerging market for the world.

4. Emerging Economy:

  • Emerging as a top economic giant among the world economy.
  • India bags the seventh position in terms of nominal Gross Domestic Product [GDP] and third in terms of Purchasing Power Parity [PPP]
  • As a result of rapid economic growth, Indian economy has a place among the G20 countries.

5 Fat Growing Economy:

  •  India’s economy is well known for high and sustained growth.
  • The world’s fastest growing economy in the year 2016-17 with the growth rate of 7.1 % in GDP.

6. Fast Growing Service Sector:

  • The service sector, contributes a lion’s share of the GDP in India.
  • There has been a high rise growth in the technical sectors like information technology.

7. Large Domestic Consumption:

  • With the faster growth rate in the economy the standard of living has improved a lot.
  • The standard of living has considerably improved and life style has changed.

8. Rapid Growth of Urban Areas:

  • Urbanization is a key ingredient of the growth of any economy.
  • Improved connectivity is transport and communication, education and health have speeded up the pace of urbanization.

9. Stable Macro Economy:

  • The Indian economy has been projected and considered as one of the most stable economies of the world.
  • The current year’s Economic survey represents the Indian economy to be a “heaven of macroeconomic stability, resilience and optimism”.

10. Demographic dividend:

  • This means that India is a pride owner of the maximum percentage of youth.
  • The young population is not only motivated but skilled and trained enough to maximize the growth.
  • Thus human capital plays a key role in maximizing the growth prospects is the countiy.
  • This has invited foreign investments to the country and outsourcing opportunities too.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 44.
(a) Elucidate the laws of Returns to Scale. Illustrate.
Laws of Returns To Scale: In the long – run, there is no fixed factor; all factors are variable. The laws of returns to scale explain the relationship between output and the scale of inputs in the long – run when all the inputs are increased in the same proportion.

Assumptions:
Laws of Returns to Scale are based on the following assumptions.

  • All the factors of production, [such as land, labour and capital] are variable but organization is fixed.
  • There is no change in technology.
  • There is perfect competition in the market.
  • Outputs or returns are measured in physical quantities.

Three Phases of Returns to Scale:

  1. Increasing Returns to Scale: In this case if all inputs are increased by one percent,
    output increase by more than one percent. ‘
  2. Constant Returns to Scale: In this case if all inputs are increased by one percent, output increases exactly by one percent.
  3. Diminishing Returns to Scale: In this case if all inputs are increased by one percent, output increases by less than one percent.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 8

The three laws of returns to scale can be explained with the help of the diagram below. In the figure, the movement from point a to point b represents increasing returns to scale. Because, between these two points output has doubled, but output has tripled. The law of constant returns to scale is implied by the movement from the point b to point c. Because, between these two points inputs have doubled and output also has doubled. Decreasing returns to scale are denoted by the movement from the point c to point d since doubling the factors from 4 units to 8 units product less than the increase in inputs, that is by 33.33%.

[OR]

(b) Discuss the long run cost curve with suitable diagram.
Answer:

  • In the long run all factors of production become variable. The existing size of the firm can be increased in the case of long run. There are neither fixed inputs nor fixed costs in the long run.
  • LAC is given in diagram.
  • Long run average cost (LAC) is equal to long run total costs divided by the level of output.
    LAC = LTC/Q

where, LAC denotes Long-Run Average Cost,
LTC denotes Long-run Total Cost and Q denotes the quantity of output. The LAC curve is derived from short-run average cost curves. It is the locus of points denoting the least cost curve of producing the corresponding output. The LAC curve is called as ‘Plant Curve’ or ‘Boat shape Curve’ or ‘Planning Curve’ or ‘Envelop Curve’.
Tamil Nadu 11th Economics Model Question Paper 4 English Medium - 9

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 45.
(a) Illustrate the uncertainty Bearing Theory of profit.
Answer:
Uncertainty theory was propounded by the American economist Frank H.Knight. Profit is the reward for “ uncertainty bearing”. He distinguishes between “ Insurable” and “non-insurable” risks.

Insurable Risks:

  • Certain risks are measurable or calculable .
  • Some of the examples of these risks are the risk of fire, theft and natural disasters.
  • Such risks are compensated by the Insurance companies.

Non-Insurable Risks:

  • There are some risks which are immeasurable or incalculable.
  • The examples of these risks are competition, market condition, technology change and public policy.
  • No Insurance Company can undertake these risks.
  • The term “risks” covers the first type of events (measurable – insurable)
  • The term “uncertainty” covers the second type of events (unforeseeable or incalculable or not measurable or non-insurable).
  • According to Knight, profit does not arise.
  • On account of risk-taking, because the entrepreneur can guard himself against a risk by taking a suitable insurance policy.
  • Uncertain events cannot be guarded against in that way.
  • An entrepreneur takes himself the burden of facing an uncertain event, he secures remuneration.
  • That remuneration is “profit”.

[OR]

(b) Write a brief note on the Gandhian economic ideas.
Answer:
Gandhian Economics is based on ethical foundations. Gandhi wrote “ Economics that hurts the moral well-being of an individual or a nation is immoral, and therefore , Sinful”. Gandhi repeated the same belief” that economy is untrue which ignores dr disregards moral values”.

Salient features of Gandhian Economic Thought:

(i) Village Republics:

  • India lives in villages.
  • He was interested in developing the villages as self-sufficient units.
  • He opposed extensive use of machinery, urbanization and industrialization.

(ii) On Machinery :

  • Gandhi described machinery as ‘Great sin’. He said that “Books could be written to demonstrate its evils”.
  • It is necessary to realize that machinery is bad.
  • Instead of welcoming machinery as a boon, we should look upon it as an evil. •
  • It would ultimately cease.

(iii) Industrialism:

  • Gandhi considered industrialism as a curse on mankind.
  • He thought industrialism depended entirely on a country’s capacity to exploit.

(iv) Decentralization:
Gandhi advocated a decentralized economy i.e., production at a large number of places on a small scale or production in the people’s homes.

(v) Village Sarvodaya:

  • According to Gandhi, “ Real India was to be found in villages and not in towns or cities”.
  • He suggested, self – dependent villages.

(vi) Bread Labour:

  • Gandhi realized the dignity of human labour.
  • He believed that God created man to eat his bread by the sweat of his brow.
  • Bread labour or body labour was the expression that Gandhi used to mean manual labour.

(vii) The Doctrine of Trusteeship:
Trusteeship provides a means of transforming the present capitalist order of society into an egalitarian one.

(viii) On the Food Problem:

  • Gandhi was against any sort of food controls.
  • Once India was begging for food grain, but now India tops the world with very large production of food grains, fruits, vegetables, milk, egg, meat etc.

(ix) On Population:

  • Gandhi opposed the method of population control through contraceptives.
  • He was, however, in favour of birth control through Brahmacharya or self – control.
  • He considered self – control as a sovereign remedy to the problem of over population,

(x) On Prohibition:

  • Gandhi regarded the use of liquor as a disease rather than a vice.
  • He felt that it was better for India to be poor than to have thousands of drunkards.
  • Many states depend on revenue from liquor sales.

Question 46.
(a) Describe briefly the innovation Theory of profit.
Answer:
Innovation Theory of Profit:

  • Innovation theory of profit was propounded by Joesph. A. Schumpeter.
  • Schumpeter says an entrepreneur is not only an undertaker of a business, but also an • innovator in the process of production.
  • Profit is the reward for “innovation”.
  • According to Schumpeter, an innovation may consist of the following:
    1. Introduction of a new product.
    2. Introduction of a new method of production.
    3. Opening up of a new market.
    4. Discovery of new raw materials
    5. Reorganization of an industry / firm. –
  • When any one of these innovations is introduced by an entrepreneur, it leads to reduction in the cost of production and thereby brings profit to an entrepreneur.
  • To obtain profit continuously, the innovator needs to innovate continuously. The real innovators do so. Imitative entrepreneurs cannot innovate.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

[OR]

(b) Describe the performance of 12 five year plans in India.
Performance of Five Year Plans:
First Five Year Plan – [1951 – 1956]

  • It was based on the Harrod – Domar Model.
  • Its main focus was on the agricultural development of the country.
  • This plan was successful and achieved the GDP growth rate of 3.6%. [more than its target]

Second Five Year Plan – [1956 – 1961]

  • It was based on the P.C. Mahalanobis Model.
  • Its main focus was on the industrial development of the country.
  • This plan was successful and achieved growth rate of 4.1%

Third Five Year Plan- [1961- 1966]

  • This plan was called ‘Gadgil Yojana’.
  • The main target of this plan was to make the economy independent and to reach self propelled position or take off.
  • Due to Indo – China war, this plan could not achieve its growth target of 5.6%.

Fourth Five Year Plan – [1969 – 1974]

  • There are two main objectives of this plan (i.e) growth with stability and progressive achievement of self reliance.
  • This plan failed and could achieve growth rate of 3.3% only against the target of 5.7%.

Fifth Five Year Plan – [1974 – 1979]

  • In this plan top priority was given to agriculture, next came industry and mines.
  • This plan achieved the growth of 4.8% against the target of 4.4%.

Sixth Five Year Plan – [1980 -1985]

  • The basic objective of this plan was poverty eradication and technological self reliance.
  • Its growth target was 5.2% but it achieved 5.7%

Seventh Five Year Plan – [1985 – 1990]

  • This plan establishment of the self sufficient economy, opportunities for productive employment.
  • Its growth target was 5.0% but it achieved 6.0% .

Eighth Five Year Plan – [1992-1997]

  • In this plan the top priority was given to development of the human resources (i.e) employment, education and public health.
  • This plan was successful and got annual growth rate of 6.8%.

Ninth Five Year Plan – [1997 – 2002]

  • The main focus of this plan was “growth with justice and equity”.
  • This plan failed to achieve the growth target of 7% and Indian economy grew only at the rate of 5.6%.

Tenth Five Year Plan – [2002 – 2007]

  • This plan aimed to double the per capita income of India in the next 10 years.
  • It aimed to reduce the poverty ratio of 15%
  • Its growth target was 8.0% but it achieved only 7.2%

Eleventh Five Year Plan – [2007 – 2012]

  • Its main theme was “faster and more inclusive growth”.
  • Its growth rate target was 8.1% but it achieved only 7.9%

Twelfth Five Year Plan – [2012 – 2017]

  • Its main theme is “faster, more inclusive and sustainable growth”.
  • Its growth rate target is 8%
  • Since the Indian Independence the five year plans of India played a very prominent role in the economic development of the country.

Tamil Nadu 11th Economics Model Question Paper 4 English Medium

Question 47.
(a) Explain the economy of Agriculture in Tamil Nadu.
Answer:

  • Tamil Nadu, with seven agro climatic zone and varied soil types is better suited for the production of fruits, vegetables, spices, plantation crops, flowers and medicinal plants.
  • The State is the largest producer of loose flowers and the third largest producer of fruits. Tamil Nadu has historically been an agricultural State.
  • At present, Tamil Nadu is the India’s second biggest producer of rice, next only to West
    Bengal.
  • The state is one of the major producers of turmeric. It is also the leading producer of Kambu, Com, Groundnut, Oil seeds and Sugarcane.
  • It ranks first in production of plantation crops and banana and coconut, second in mbber and cashew nut, third in pepper and fourth in sugarcane.
  • The gross cropped area under all crops was 58.97 lakh hectares in the year 2013-14. The area under food crops account for 72.9% and that of non-food crops is 27.1%.
  • Among the food crops paddy takes a major share. Among the non-food crops, groundnut and coconut take a major share.

[OR]

(b) Explain the public transport system in Tamil Nadu.
Answer:
Transport: Tamil Nadu has a well established transportation system that connects all parts of the State. This is partly responsible for the investment in the State. Tamil Nadu is served by an extensive road network in terms of its spread and quality, providing links between urban centres, agricultural market-places and rural habitations in the countryside. However, there is scope for improvement.

Road Transport:

  • There are 28 national highways in the State covering a total distance of 5,036 km.
  • The State has a total road length of 167,000 km, of which 60,628 km are maintained by Highways Department.

Rail Transport:

  • Tamil Nadu has a well-developed rail network as part of Southern Railway, Head quartered at Chennai.
  • Tamil Nadu has a total railway track length of 6,693 km and there are 690 railway stations in the State.
  • Main rail junctions in the State include Chennai, Coimbatore, Erode, Madurai, Salem, Tiruchirapalli and Tirunelveli.
  • Chennai has a well-established suburban Railway network, a Mass Rapid Transport system and is currently developing a Metro System, with its first underground stretch operational since May 2017.

Air Transport:

  • Tamil Nadu has four major international airports.
  • Chennai International Airport is currently the third largest airport in India.
  • Other international Airports in Tamil Nadu include Coimbatore International Airports, Madurai International Airport and Tiruchirapalli International Airport.
  • It also has domestic airports at Tuticorin, Salem, and Madurai.
  • Increased industrial activity has given rise to an increase in passenger traffic as well as freight movement which has been growing at over 18% per year.

Ports:

  • Tamil Nadu has three major ports; one each at Chennai, Ennore and Tuticorin, as well as one intermediate port in Nagapattinam, and 23 minor ports.
  • The ports are currently capable of handling over 73 million metric tonnes of cargo annually (24 % share of India).
  • All the minor ports are managed by the Tamil Nadu Maritime Board, Chennai Port.
  • This is an artificial harbour and the second principal port in the country for handling containers.
  • It is currently being upgraded to have a dedicated terminal for cars capable of handling 4,00,000 vehicles.
  • Ennore port was recently converted from an intermediate port to a major port and handles all the coal and ore traffic in Tamil Nadu.

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