NEB Class 12 Management Economics Question Paper 2080 (Set B) Nepal

Division of labour refers to the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons to increase efficiency.

Using the formula: $\text{Total Revenue (TR)} = \text{Total Cost (TC)} + \text{Total Profit} = 100 + 300 = \text{Rs. } 400$.

A commercial bank is a financial institution that accepts deposits from the public and provides loans for investment purposes to earn profit.

Balance of trade records only visible items (merchandise exports and imports), whereas Balance of payment records both visible items and invisible items (services, transfers, and capital flows).

1. High population growth rate.
2. Lack of employment opportunities and low economic growth.

A development plan is a systematic and predefined blueprint outlining specific economic objectives, targets, and strategies to be achieved within a set time frame by utilizing resources efficiently.

In the context of Nepal, zero hunger refers to achieving the sustainable development target of ending all forms of hunger and malnutrition, ensuring food security, and promoting sustainable agriculture across the country.

Sustainable Development Goal 1 (SDG 1): "No Poverty" is directly related to poverty.

1. Statistics does not study qualitative phenomena directly; it deals only with quantitative data.
2. Statistical laws are true only on average and in the long run, rather than being universally exact.

Primary data is important because it is highly reliable, precise, original, and collected directly from the source to address specific research objectives.

Laspeyres' price index uses base-year quantities as weights, whereas Paasche's price index uses current-year quantities as weights.

The main features of a socialist economic system include:

1. Collective/State ownership of resources.
2. Centralized economic planning.
3. Maximization of social welfare instead of personal profit.
4. Absence of consumer sovereignty in production choices.
5. Equal distribution of wealth and reduction of class conflict.

A Production Possibility Curve (PPC) is a graphical representation showing all possible combinations of two goods that an economy can produce given fixed resources and technology, under full utilization. It is generally concave to the origin due to increasing marginal opportunity cost.

The risk-bearing theory of profit, advanced by F.B. Hawley, states that profit is the reward for bearing risks in business. Entrepreneurs take various financial, marketing, and production risks, and higher risks necessitate a expectation of higher profit margins.

(I) Complete table logic:

• $\text{AR} = \text{Price}$
• $\text{TR} = \text{Price} \times \text{Units}$
• $\text{MR} = \text{TR}_n - \text{TR}_{n-1}$

Completed table values:

• Row 1: TR=5, MR=5, AR=5
• Row 2: TR=8, MR=3, AR=4
• Row 3: TR=9, MR=1, AR=3
• Row 4: TR=8, MR=-1, AR=2

(II) AR and MR curves can be derived by plotting units on the X-axis and AR/MR on the Y-axis. Both slopes downward, with MR falling faster than AR.

Under the MC-MR approach, a firm in perfect competition reaches equilibrium when two conditions are met:

1. Necessary condition: Marginal Revenue equals Marginal Cost ($MR = MC$).
2. Sufficient condition: MC curve must cut the MR curve from below (MC must be rising at the equilibrium point).

The qualities or canons of a good tax system include:

1. Equity: progressive taxation based on ability to pay.
2. Certainty: payment details should be clear and predictable.
3. Convenience: payment timing and mode should suit the taxpayer.
4. Economy: minimized cost of collection.
5. Elasticity/Productivity: yield should automatically vary with national income growth.

Human resources serve as an engine for economic development by:

1. Enhancing labor productivity through skill and education.
2. Promoting technological innovation and entrepreneurship.
3. Ensuring effective utilization of physical and natural resources.
4. Providing administrative capabilities and governance support.

Foreign trade is critical due to:

1. Utilization of surplus domestic production through exports.
2. Access to goods and advanced technology not available domestically.
3. Benefits of international specialization and division of labor.
4. Foreign exchange earnings to support national balance of payments.

Calculation steps:

1. Tabulate values with frequencies ($f$), compute mid-values or direct product $fx$.
2. Total Frequency $N = 4+7+5+3+2 = 21$.
3. Find Mean $\bar{x} = \frac{\sum fx}{N}$.
4. Find $\sum f(x-\bar{x})^2$ or $\sum fx^2$.
5. Apply standard deviation formula $\sigma = \sqrt{\frac{\sum f x^2}{N} - \left(\frac{\sum fx}{N}\right)^2}$ or $\sqrt{\frac{\sum f(x-\bar{x})^2}{N}}$.
6. Interpretation indicates the level of dispersion or variance in expenditure among the businessmen.

Paasche's Price Index Formula: $P_{01} = \frac{\sum p_1 q_1}{\sum p_0 q_1} \times 100$

Calculation steps:

• Compute $p_1 q_1$ and $p_0 q_1$ values for each row:
  • A: $6 \times 12 = 72$, $4 \times 12 = 48$
  • B: $8 \times 10 = 80$, $5 \times 10 = 50$
  • C: $10 \times 18 = 180$, $6 \times 18 = 108$
  • D: $6 \times 15 = 90$, $4 \times 15 = 60$
  • E: $5 \times 15 = 75$, $3 \times 15 = 45$
• Sums:
  • $\sum p_1 q_1 = 72 + 80 + 180 + 90 + 75 = 497$
  • $\sum p_0 q_1 = 48 + 50 + 108 + 60 + 45 = 311$
• Index: $P_{01} = \frac{497}{311} \times 100 \approx 159.81$
• Interpretation: Prices have increased by approximately 59.81% in 2078 compared to the base year 2073.

1. TFC Curve: A horizontal straight line parallel to the X-axis because fixed cost remains constant regardless of production level.
2. TVC Curve: Starts from origin ($0$) and slopes upward in an inverse S-shape due to the law of variable proportions.
3. TC Curve: Starts from the intercept of TFC on the Y-axis and runs parallel above the TVC curve because $\text{TC} = \text{TFC} + \text{TVC}$.

Public finance is critical to an economy because it aids in:

1. Correcting market failures and providing public goods (infrastructure, security).
2. Redistributing wealth to achieve social justice and equity through taxation.
3. Stabilizing macroeconomics variables (inflation, employment control).
4. Promoting rapid economic growth through strategic development expenditure.

Composition of Nepal's Trade:

• Dominance of primary agricultural or semi-processed items in exports.
• Large imports of manufactured consumer goods, petroleum products, machinery, and luxuries.

Suggestions to reduce trade deficit:

1. Import substitution through prioritizing domestic manufacturing.
2. Export promotion using subsidies and enhancing trade competitiveness.
3. Modernization of agriculture to reduce food imports.
4. Promoting service sectors like hydropower and tourism to generate alternative revenue streams.

The role and significance of remittance in Nepal includes:

1. Providing essential foreign exchange reserves.
2. Lifting millions out of absolute poverty and easing household budget constraints.
3. Fueling the banking sector's liquidity and growth.
4. Funding education and health investments inside households.
5. Risks include consumerism expansion and brain drain problems.