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Answer the following. (Class 12 Economics SQP 2024-25, Q17B)

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EconomicsCBSE Class 12 · Sample paper, session 2024-25 · 6 marks · Long answer

CBSE Class 12 Economics sample paper 2024-25: question 17(B)

From the official CBSE sample question paper for 2024-25, section A, question 17(B), for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q17(B) · 6 marks · Long answerCompetency-basedNational Income Accounting

Answer the following.

  1. (I)

    “Basis of classification of final goods into consumption and capital goods depend on the economic nature of its use.”
    Defend or refute the statement, with the help of a suitable example.

    4 marks
  2. (II)

    ‘Natural calamities in the hill states of India have led to massive destruction of capital assets.’
    Identify the type of loss (depreciation or capital loss) indicated in the aforesaid statement. Give valid reasons in support of your answer.

    2 marks

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Who buys the good and why?

Hint 2

Depreciation is expected wear and tear; a disaster is not.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. (I) Defended. Consumption goods satisfy consumers' wants directly; capital goods are final goods used for further production over many years.

    1½ marks

  2. Whether a good is a consumption or capital good depends on the economic nature of its use, not on the good itself.

    1 mark

  3. Example: a machine (say, a sewing machine or a car) bought by a household for its own use is a consumption good, but the same machine bought by a firm for production is a capital good.

    1½ marks

  4. (II) It is a capital loss. Capital loss is the loss in value of fixed assets due to unforeseen events such as natural disasters, fire or theft. The destruction in the hill states (for example Himachal Pradesh, Uttarakhand) was sudden and unexpected, not normal wear and tear, so it is not depreciation.

    2 marks

Answer: (I) Defended: the same good is a consumption good for a household and a capital good for a firm. (II) Capital loss: unforeseen destruction by natural calamities.

Where the marks are

  • Defence with explanation and example (4)
  • Capital loss identified with reason (2)

Revise the chapter

Practise this chapterBoard-style questions from National Income Accounting, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.