ICSE Class 10 Economics Board Exam Question Paper 2020 with Solutions

ICSE Class 10 Economics Board Exam Question Paper with Solutions

SECTION A (40 Marks)

Attempt all questions from this Section

Question 1

(a) Give any two points of differences between fixed and saving deposits. [2 Marks]

Answer:
1. Fixed deposits are kept for a fixed period of time, whereas saving deposits can be withdrawn by the depositor as and when required subject to certain restrictions.
2. Fixed deposits carry a higher rate of interest, whereas saving deposits carry a lower rate of interest.

Teacher's Note:
a) Clearly state the maturity period and interest rate differences as key distinguishing parameters.
b) Avoid confusing withdrawal flexibility between current and saving accounts.

(b) Explain the meaning of Productivity of Land. [2 Marks]

Answer:
Productivity of land refers to the yielding capacity of land or output produced per unit of land. It depends on the fertility of the soil, use of modern technology, and efficient management.

Teacher's Note:
a) Emphasize that productivity is output per unit of land area.
b) Students must mention both natural fertility and human factors like technology.

(c) Mention the two sources of revenue for the government. [2 Marks]

Answer:
1. Tax revenue (Direct and Indirect taxes).
2. Non-tax revenue (Fees, fines, gifts, grants, and public enterprise earnings).

Teacher's Note:
a) Broadly categorizing into tax and non-tax sources fetches full credit.
b) Giving sub-examples under these two heads is a good practice.

(d) Explain any two duties of a consumer. [2 Marks]

Answer:
1. Asking for cash memo and bill: A consumer must insist on getting a cash memo/invoice for purchases made to serve as proof for grievance redressal.
2. Buying standardized goods: A consumer should look for quality certification marks like ISI, Agmark, or Hallmark before purchasing goods.

Teacher's Note:
a) Responsibilities help protect consumers from market exploitation.
b) State exact specific duties as mandated under consumer protection frameworks.

(e) Define the term capital as a factor of production. [2 Marks]

Answer:
Capital refers to that part of man-made wealth which is used for further production of more wealth or goods and services. Examples include machinery, tools, and factories.

Teacher's Note:
a) Highlight that capital is man-made and used for further production.
b) Do not confuse capital merely with money in general economics unless specified as financial capital.

Question 2

(a) What is meant by proportional tax? [2 Marks]

Answer:
A proportional tax is a tax where the rate of taxation remains constant irrespective of the size of the taxpayer's income. Everyone pays the exact same percentage of their income as tax.

Teacher's Note:
a) Define with the key concept of a constant tax rate across all income levels.
b) Contrast briefly with progressive tax if helpful for clarity, though not strictly required.

(b) Give any two points of differentiation between creeping inflation and running inflation. [2 Marks]

Answer:
1. Speed: Creeping inflation is very slow and mild (price rise up to 3 percent per annum), whereas running inflation is much faster and noticeable (price rise ranging between 5 to 10 percent per annum or more).
2. Economic impact: Creeping inflation is considered beneficial and harmless for economic growth, whereas running inflation can destabilize the economy if unchecked.

Teacher's Note:
a) Include approximate percentage ranges to show precise knowledge.
b) Mention the distinct effect each type has on the purchasing power.

(c) How does the price of a commodity affect the supply of a commodity? [2 Marks]

Answer:
There is a direct relationship between the price of a commodity and its supply. When the price of a commodity rises, its supply increases, and when the price falls, its supply decreases, assuming other factors remain constant (Law of Supply).

Teacher's Note:
a) State the direct relationship clearly.
b) Mention the ceteris paribus assumption (other things remaining constant).

(d) Mention the first four stages of evolution of money. [2 Marks]

Answer:
1. Commodity money
2. Metallic money
3. Paper money
4. Bank money (Credit money)

Teacher's Note:
a) List the stages in chronological order.
b) Ensure accurate naming of each historical phase.

(e) Explain any one disadvantage of the barter system of exchange. [2 Marks]

Answer:
Lack of double coincidence of wants: In a barter system, exchange can take place only when both parties desire to buy and sell each other's commodities, which is very difficult to find.

Teacher's Note:
a) Clearly explain the core flaw of the barter system.
b) Other valid disadvantages include lack of a common measure of value or difficulty in storing wealth, but double coincidence is the primary one.

Question 3

(a) What is consumer awareness? [2 Marks]

Answer:
Consumer awareness refers to making a consumer aware of his/her rights, duties, and safety standards while purchasing goods and services so that they are not exploited by unfair trade practices.

Teacher's Note:
a) Define consumer awareness centering on rights and protection against exploitation.
b) Emphasize knowledge about quality marks and grievance redressed.

(b) Define the term market. [2 Marks]

Answer:
In economics, a market does not refer to a particular geographical place, but to an arrangement or mechanism through which buyers and sellers come into contact with one another to buy and sell goods and services.

Teacher's Note:
a) Emphasize that a market is an economic network/mechanism, not just a physical place.
b) Presence of buyers, sellers, and a communicating medium are essential.

(c) Explain any one type of public debt. [2 Marks]

Answer:
Internal debt: It refers to the loans raised by the government from within the boundaries of the country, i.e., from individuals, commercial banks, financial institutions, and central banks of the nation.

Teacher's Note:
a) Clearly distinguish internal debt from external debt.
b) Mention who lends to the government within the country.

(d) What does public finance mean? [2 Marks]

Answer:
Public finance is a branch of economics that studies the income, expenditure, financial administration, and debt management of the government (public authorities).

Teacher's Note:
a) Focus on government income, expenditure, and debt.
b) Contrast it with private finance which deals with individual or corporate budgets.

(e) Give any two points of differentiation between perfect and monopolistic competition. [2 Marks]

Answer:
1. Nature of product: Under perfect competition, products are homogeneous (identical), whereas under monopolistic competition, products are differentiated.
2. Control over price: Under perfect competition, firms are price takers with no control over price, whereas under monopolistic competition, individual firms have some degree of control over their product price due to product differentiation.

Teacher's Note:
a) Highlight product homogeneity versus differentiation as the core difference.
b) Mention price-taking vs price-making ability.

Question 4

(a) Explain the meaning of Composite Demand with the help of an example. [2 Marks]

Answer:
Composite demand refers to a situation where a commodity is demanded for multiple uses. For example, electricity is demanded for lighting, running fans, heating, and industrial operations.

Teacher's Note:
a) Define composite demand as multi-use demand.
b) Provide a clear and standard example like electricity or coal.

(b) Define the term Money. [2 Marks]

Answer:
Money is anything that is generally accepted as a medium of exchange, a measure of value, a standard of deferred payment, and a store of value.

Teacher's Note:
a) Use general acceptability and primary functions as the core definition.
b) Citing standard functional definitions is appreciated by examiners.

(c) What is demonetisation? [2 Marks]

Answer:
Demonetisation is the act of stripping a currency unit of its status as legal tender, where the existing currency notes cease to be recognized as legal tender for transactions.

Teacher's Note:
a) Define clearly as the withdrawal of legal tender status from currency.
b) Mention its role in curbing black money or promoting digital transactions.

(d) Mention any two objectives of Goods & Services Tax (GST). [2 Marks]

Answer:
1. To implement a unified tax structure across the country ('One Nation, One Tax').
2. To eliminate the cascading effect of taxes (tax on tax).

Teacher's Note:
a) Focus on uniformity and elimination of cascading effects.
b) Mentioning ease of doing business or simplification of indirect taxation is also acceptable.

(e) State two points of difference between revenue expenditure and capital expenditure. [2 Marks]

Answer:
1. Creation of assets: Revenue expenditure does not result in the creation of physical or financial assets, whereas capital expenditure leads to the creation of assets.
2. Purpose: Revenue expenditure is incurred for normal day-to-day running of government departments and provision of services, whereas capital expenditure is incurred for long-term development and capital formation.

Teacher's Note:
a) Distinguish clearly on the basis of asset creation.
b) Mention recurring nature versus capital formation.

SECTION B (40 Marks)

Attempt any four questions from this Section

Question 5

(a) (i) What is meant by Efficiency of labour? [5 Marks]

(ii) State any four reasons for low efficiency of labour in India.

Answer:
(i) Efficiency of labour refers to the productive capacity or capability of a worker to produce more goods and services of high quality within a given period of time and with minimum wastage.
(ii) Reasons for low efficiency of labour in India:
1. Hot and humid climate: The tropical climate in most parts of India causes physical fatigue and lowers work capacity.
2. Poor health and nutrition: Due to poverty and malnourishment, Indian workers often suffer from low stamina and poor health.
3. Inadequate training and low level of education: Lack of proper vocational training and general education keeps skill levels low.
4. Outdated technology: Workers in many traditional sectors still use obsolete tools and machinery, restricting their productivity.

Teacher's Note:
a) Divide the answer clearly into part (i) definition and part (ii) four points.
b) Ensure economic factors like climate, health, and technology are clearly articulated.

(b) Explain any five ways by which consumers are exploited in India. [5 Marks]

Answer:
1. Under-measurement and under-weight: Traders often use faulty weights and measures to cheat consumers of the exact quantity.
2. Adulteration: Mixing inferior, harmful, or cheaper substances into pure food items and commodities, posing health hazards.
3. High prices: Charging prices higher than the Maximum Retail Price (MRP) or exploiting consumers during shortages.
4. Substandard quality: Selling low-quality or fake goods under the guise of branded or certified items, endangering consumer safety.
5. False and misleading advertisements: Exaggerating the utility, features, or benefits of a product through deceptive advertising to lure buyers.

Teacher's Note:
a) List five distinct forms of exploitation with brief explanations.
b) Use real-world examples such as adulteration and misleading advertisements to score full marks.

Question 6

(a) With reference to demand: [5 Marks]

(i) Explain the law of demand.

(ii) Draw a diagram representing law of demand.

Answer:
(i) The law of demand states that, other things remaining constant (ceteris paribus), there is an inverse relationship between the price of a commodity and its quantity demanded. When price increases, demand falls, and when price decreases, demand rises.
(ii) [Figure: A downward sloping demand curve on a 2D graph with Price (P) on the vertical Y-axis and Quantity (Q) on the horizontal X-axis, showing demand curve DD sloping downwards from left to right.]

Teacher's Note:
a) Always mention the assumptions (ceteris paribus) when stating the law of demand.
b) Ensure the diagram clearly labels axes, origin, and the downward-sloping demand curve.

(b) Explain any five factors affecting the demand for a commodity. [5 Marks]

Answer:
1. Price of the commodity: Inverse relationship; higher price leads to lower demand and vice versa.
2. Income of the consumer: For normal goods, a rise in income increases demand, whereas for inferior goods, demand falls as income rises.
3. Prices of related goods: Substitute goods (rise in price of tea increases demand for coffee) and complementary goods (rise in price of cars decreases demand for petrol).
4. Tastes and preferences of the consumer: Favorable changes in fashion, habits, and preferences increase demand, while unfavorable changes decrease it.
5. Consumer expectations: If consumers expect prices to rise in the future, current demand increases.

Teacher's Note:
a) Heading with five distinct determinants and explain the direction of change for each.
b) Differentiate between substitutes and complementary goods clearly.

Question 7

(a) Define land. Explain any four characteristics of land. [5 Marks]

Answer:
Definition: In economics, land refers to all free gifts of nature that are available to mankind, including land surface, rivers, minerals, climate, and forests.
Characteristics of land:
1. Free gift of nature: Land is not man-made; it is a natural resource available without any production cost.
2. Fixed supply: The total supply of land is inelastic and cannot be increased or decreased by human effort.
3. Land is immobile: Land cannot be shifted physically from one place to another.
4. Land has heterogeneous fertility: No two plots of land are identical in fertility or productivity.

Teacher's Note:
a) Provide the precise economic definition of land.
b) List any four standard characteristics with brief explanations.

(b) Briefly explain any five rights of a consumer. [5 Marks]

Answer:
1. Right to Safety: Protection against products, production processes, and services that are hazardous to health or life.
2. Right to be Informed: Protection against fraudulent, deceptive, or misleading information regarding quality, quantity, purity, and price.
3. Right to Choose: Assured access to a variety of goods and services at competitive prices.
4. Right to be Heard: Assurance that consumer interests will receive due consideration in appropriate forums.
5. Right to Seek Redressal: Right to seek legal remedy against unfair trade practices or exploitation, including compensation for damages.

Teacher's Note:
a) Enumerate five core consumer rights from the Consumer Protection Act.
b) Keep explanations concise and accurate.

Question 8

(a) Explain briefly any five merits of Indirect taxes. [5 Marks]

Answer:
1. Convenience: Indirect taxes are paid implicitly when purchasing goods, making payment convenient without the burden of lump-sum tax filing.
2. Wide coverage: Everyone who consumes goods and services contributes to tax revenue, including the poor who may not pay direct taxes.
3. Progressive through social objectives: Governments can impose heavy indirect taxes on harmful goods (like liquor and tobacco) to discourage consumption.
4. Elasticity: Revenue from indirect taxes can be increased easily by raising tax rates on widely consumed commodities.
5. No evasion: Since indirect taxes are included in the price of goods, tax evasion is difficult compared to direct taxes.

Teacher's Note:
a) Focus on merits like convenience, wide coverage, and anti-harmful consumption policies.
b) Contrast with direct taxes wherever relevant to strengthen the answer.

(b) What are the reasons for growth of public expenditure in India? [5 Marks]

Answer:
1. Defense expenditure: Increasing expenditure on national security, modernizing armed forces, and maintaining defense equipment due to geopolitical tensions.
2. Welfare activities: Government spending on poverty alleviation, healthcare, education, and social security schemes for welfare state creation.
3. Population growth: Rapid increase in population demands larger public infrastructure, schools, hospitals, and administrative services.
4. Public debt servicing: Increasing interest payments and repayment obligations on internal and external borrowings.
5. Infrastructure development: Heavy investment in building roads, railways, power projects, dams, and communication networks essential for economic growth.

Teacher's Note:
a) List five valid reasons driving modern government expenditure.
b) Highlight development and welfare responsibilities as major causes.

Question 9

(a) Explain any five characteristics of labour as a factor of production. [5 Marks]

Answer:
1. Labour is inseparable from the labourer: Unlike capital or land, a worker must be present physically to render services; labour cannot be separated from the worker.
2. Labour is perishable: Labour cannot be stored. If a worker remains idle on a particular day, that day's labor is lost forever.
3. Weak bargaining power: Workers usually have weaker bargaining power compared to employers because labour cannot be easily withheld due to poverty.
4. Active factor of production: Unlike land and capital which are passive factors, labour is an active factor that puts other factors to use.
5. Labour is elastic in the long run: The supply of labour can change over time with changes in population, education, and skill training.

Teacher's Note:
a) Highlight unique characteristics distinguishing labour from other factors.
b) Emphasize perishability and inseparability.

(b) Mention five points of difference between a commercial and a central bank. [5 Marks]

Answer:

Teacher's Note:
a) Present differences in a clear tabular format.
b) Cover key distinctions such as note issue, profit motive, and apex status.

Question 10

(a) (i) What do you understand by relatively inelastic demand? [5 Marks]

(ii) Draw a well labelled diagram to show relatively inelastic demand.

Answer:
(i) Relatively inelastic demand refers to a situation where the percentage change in quantity demanded is less than the percentage change in price. Elasticity of demand is less than one (Ed < 1). Consumers do not change their demand much even when price changes significantly (e.g., necessities like salt or medicines).
(ii) [Figure: A steep downward sloping demand curve on a graph with Price (P) on the vertical Y-axis and Quantity (Q) on the horizontal X-axis, showing a steep demand curve where a large change in price leads to a very small change in quantity demanded.]

Teacher's Note:
a) State the definition and mathematical condition (Ed < 1).
b) Ensure the diagram shows a steep demand curve.

(b) (i) What is the meaning of demand pull inflation? [5 Marks]

(ii) Explain any three causes of demand pull inflation.

Answer:
(i) Demand-pull inflation refers to the rise in price levels caused by an excess of aggregate demand over aggregate supply in the economy.
(ii) Causes of demand-pull inflation:
1. Increase in money supply: Excessive printing of currency or expansion of credit increases purchasing power, driving up demand.
2. Increase in public expenditure: Heavy government spending on public works and welfare projects puts more money in people's hands, raising demand.
3. Increase in population: Rapid population growth leads to higher consumption demand for basic goods and services.

Teacher's Note:
a) Define demand-pull inflation as 'too much money chasing too few goods'.
b) Explain any three valid macroeconomic causes clearly.