Thinking Questions- a Necessity
In the Board’s question
paper in Economics of Class XII, there will be higher order thinking questions
of 15 to 20 marks. The objective is to assess the students’ understanding,
analytical ability and interpretation.
In the course content
for Economics, an attempt is made to introduce basic concepts used in the
study of this subject. Many of these concepts are also interrelated.
Memorising these concepts
and their relationship will not help in understanding the economic laws
and principles. These have to be understood in totality by asking
questions such as why and how and going a step further by applying them
to various situations.
Some of these concepts
1 Marginal and average
cost etc and their relationship.
2 Concept of equilibrium
in microeconomics and in macroeconomics.
3 Concepts of elasticity.
4 Concepts of domestic
product and national product.
5 Intermediate and final
6 Concepts of inflation,
depreciation of domestic currency, etc.
Just memorising the meaning
of concepts does not help in understanding the subject and the use of these
concepts. For instance just memorising the meaning of average and
marginal costs and their relationship will not help you in answering question,
Some examples of higher order
thinking questions in Economics for class XII are given below:-
||1 Why must marginal cost
curve pass through the minimum point of average cost curve? Or
2 If marginal revenue
falls, will total revenue fall? Or
3 Are the wages and salaries
received by Indians working in American Embassy in India a part of Domestic
Product of India? Or
4 What are the main reasons
for the present price rise in India? Or
5 Why must aggregate
demand and aggregate supply be equal when the economy is in an equilibrium?
To give a practice of
the application of these concepts and to test whether the students have
really understood them, the situations from day to day life should be put
them. They should
then be asked to analyse them. Some topics can also be taken up for debate,
such as “Are borrowings bad?” or “Is inflation harmful?”
1 When price of a good
rises from Rs.5 per unit to Rs.6 per unit, 3
its demand falls from
20 units to 10 units. Compare expenditures
on the good to determine
whether demand is elastic or inelastic.
2 What is the relation
between good X and good Y in each case, if 3
with fall in the price
of X demand for good Y (i) rises and (ii) falls?
3 Giving reasons
explain how the following are treated while estimating 2,2,2
(i) Payment of fees to
a lawyer engaged by a firm.
(ii) Rent free house
to an employee by an employer.
(iii) Purchases by foreign
4 Explain what
happens to the profits in the long run if the firms are free to 3
enter the industry.
5 Given market
equilibrium of a good, what are the effects of simultaneous 6
increase in both
demand and supply of that good on its equilibrium price
the implications of the following :
(i) The feature ‘differentiated
products’ under monopolistic competition.
(ii) The feature’Large
number of sellers’ under perfect competition.
7 At a given market price
of a good a consumer buys 120 units. When price
falls by 50 percent he
buys 150 units. Calculate price elasticity of demand.
8 Explain, by giving
examples, how do the following determine price elasticity
(i) nature of the good
(ii) availability of
9 In the following
table, identify the different phases of the law
of variable proportions
and also explain the causes:
Variable input (units)
1 2 3 4 5 6
Total product (units)
10 22 32 40 40 35
10 Giving reasons, explain
how the following are treated in estimating 6
(i) Purchase of a truck
to carry goods by a production unit.
(ii) Payment of income
tax by a production unit.
(iii) Services rendered
by family members to each other.