Syllabus

ECONOMICS (856)
CLASS 12
Latest Syllabus issued by CISCE For the Academic Year 2023-2024
There will be two papers in the subject:
Paper I - Theory: 3 hours ……80 marks
Paper II- Project Work ……20 marks
Note: The syllabus is intended to reflect a study of the theory of Economics with specific reference to the Indian Economy. There-
fore, examples and specific references to the Indian Economy must be made wherever relevant.

PAPER I (THEORY) – 80 Marks

Part I (20 marks) will consist of compulsory short answer map, consumer’s budget line, Consumer’s equilibrium –
questions testing knowledge, application and skills relating to condition (to be explained with the help of a diagram).
elementary / fundamental aspects of the entire syllabus.
(ii) Elasticity of demand: meaning, types of elasticity
Part II (60 marks) will consist of eight questions out of which of demand, measurement of elasticity of demand;
candidates will be required to answer five questions, each factors affecting elasticity of demand.
carrying 12 marks.
Various methods of measurement of the elasticity of
Note: The syllabus is intended to reflect a study of the theory demand: point method - percentage method, expenditure
of Economics with specific reference to the Indian Economy. method and geometric method. (Numericals required on
Therefore, examples and specific references to the Indian percentage method only). The cross and income elasticity
Economy must be made wherever relevant. of demand must be explained. Degrees of elasticity
1. Micro Economic Theory of demand to be explained. Use diagrams wherever
necessary.
(i) Demand: meaning, factors affecting demand;
Demand function; Law of Demand; derivation of (iii) Supply: meaning; difference between stock and
demand curve; movement and shift of the demand supply; determinants of supply; Law of Supply;
curve; exceptions to the Law of Demand. movement and shift of the supply curve; elasticity
of supply.
Law of Diminishing Marginal Utility, Law of
Equimarginal Utility, consumer’s equilibrium Difference between stock (intended supply) and supply
through utility approach (Cardinal) and (actual supply) with the help of relevant examples. A
indifference curve analysis (Ordinal). supply function should be specified and explained. Law
of Supply: Meaning, supply schedule and supply curve.
The concept of demand: meaning, types of demand.
Derivation of market supply curve from individual
A demand function to be specified incorporating the
supply curve. Movement and shift of the supply
determinants of demand. Diagrams should be used in
curve, exceptions to the Law of Supply. Elasticity of
explaining the Law of Demand, reasons for downward
Supply: Meaning, degrees of elasticity of supply and
slope of demand curve, its derivation using demand
measurement of elasticity of supply by percentage
schedule. Derivation of market demand curve from
method and geometric method.
individual demand curve.
(iv) Market Mechanism: Equilibrium and disequili-
(a) Cardinal Utility Analysis: meaning of utility, total
brium; Equilibrium price and effect of changes
utility, marginal utility, relationship of TU and MU,
in demand and supply on the equilibrium price.
Law of Diminishing Marginal Utility (schedule and
Simple applications of tools of demand and supply.
diagram, Only assumptions to be taught, criticisms not
required), Consumer’s equilibrium – one commodity A basic understanding of the concept of equilibrium. The
(schedule and diagram), Law of Equimarginal Utility effects of changes in demand and supply - both along
(statement, schedule) and conditions of consumer’s the curves and shift of the curves to be explained. Basic
equilibrium using marginal utility; (b) Ordinal Utility understanding of Price control, rationing, Price ceiling
Analysis: Indifference Curve – its meaning and and Floor price with the help of demand and supply
properties (including MRS and DMRS), indifference curves.

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Syllabus
(v) Concept of production and production function: multiplier (its meaning and mechanism with the help
(short run and long run production function), of a diagram). Simple numerical based on the above.
returns to a factor, returns to scale (meaning only) Meaning of full employment. Problems of excess demand
total, average and marginal physical products; Law and deficient demand; measures to correct them.
of Variable Proportions and its three stages.
3. Money and Banking
A production function (concept only). Law of Variable (i) Money: meaning, functions of money, supply
Proportions: statement, assumptions, schedule (for the of money.
purpose of understanding and not for testing), diagram and Meaning, kinds of money, functions of money
explanation to the three stages. (primary, secondary and contingent) to be
(vi) Cost and revenue: Basic concepts of cost; fixed explained; supply of money (only meaning of M0,
cost, variable cost, total cost, marginal cost and M1, M2, M3 & M4). Inflation: meaning, demand
average cost – their relationships; opportunity pull and cost push (diagrams not required)
cost; short run and long run cost curves. Revenue: (ii) Banks: functions of commercial bank; high
meaning; average revenue, marginal revenue and powered money, credit creation by commercial
total revenue and their relationships under perfect banks; Central Bank: functions.
competition and imperfect competition, Producer’s
Basic understanding of the functions of commercial
equilibrium.
banks, credit creation process with limitation. The
Basic concepts – private cost, economic cost, social cost, regulatory role of the Central Bank, its functions
money cost, real cost, explicit cost, implicit cost. and the way it controls the flow of credit needs
Cost concepts – Fixed cost, variable cost, total cost, to be explained. A brief mention may be made of
marginal cost, average cost with schedule and diagram; quantitative CRR, SLR, Bank Rate policy (repo
relationship between average cost, marginal cost, total rate and reverse repo rate) and Open Market
cost (only concepts of long run and short run cost Operations) and qualitative methods.
curves, derivations not required). Opportunity cost – 4. Balance of Payment and Exchange Rate
meaning only. Difference between accounting cost and Balance of Payment – meaning, components;
opportunity cost. foreign exchange – meaning, determination of
Revenue – Average revenue, marginal revenue, total exchange rate (Flexible).
revenue – concepts and relationships under perfect
Balance of Payment - Meaning and components;
competition and imperfect competition. Producer’s
Causes of disequilibrium and how the
equilibrium (Profit maximization goal) – meaning;
disequilibrium can be corrected; Foreign Exchange
conditions: (a) TR and TC approach along with diagram
Rate – meaning, meaning of fixed and flexible
(b) MR and MC approach along with diagram.
exchange rate, determination of exchange rate in a
(vii) Main market forms: perfect competition, free market. Concepts of depreciation, appreciation,
monopolistic competition, oligopoly, monopoly, devaluation and revaluation (meaning only).
monopsony; characteristics of the various market
5. Public Finance
forms; equilibrium of a firm in perfect competition
(i) Fiscal Policy: meaning and instruments of
under short run and long run.
fiscal policy.
Features of perfect competition, monopolistic competition,
Meaning and instruments of fiscal policy – Public
oligopoly, monopoly and monopsony (meaning only).
Revenue: Meaning, taxes (Meaning and types),
Equilibrium of a firm in perfect competition under short
difference between direct and indirect taxes; Public
run (explanation and diagram, shut down point and
Expenditure: Meaning and importance; Public
break-even point) and long run (diagram not required).
Debt: Meaning and redemption; Deficit Financing:
2. Theory of Income and Employment meaning.
Basic concepts and determination of Income and (ii) Government Budget: meaning, types and
Employment components.
The concept of demand (exante) and effective (expost) Meaning and types of Government budget – union,
demand. Aggregate demand and its components, state; components – revenue and capital. Concept of
propensity to consume and propensity to save (average deficit budget: revenue deficit, fiscal deficit, primary
and marginal), equilibrium output; investment deficit – their meaning and implications.

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Syllabus
6. National Income prospects. Analyse the trend of its growth for the last
(i) Circular flow of Income. ten years.
A simple model explaining the circular flow of 2. Conduct a Socio-Economic survey of a locality
income with two, three and four sector models with (minimum sample size should be 30 households) with
leakages and injections. reference to:
(ii) Concepts and definition of NY, GNP, GDP, (a) Demographic features.
NNP, private income, personal income, (b) Consumption Pattern – Expenditure on
personal disposable income, National necessities, comforts and luxuries.
Disposable Income and per capita income; (c) Occupational structure.
relationship between the income concepts. 3. Compare the contribution made by different sectors
A brief understanding of the mentioned national of the economy towards GDP growth during the
income aggregates is needed. The concepts of GNP planning period.
and NNP should be explained both at factor cost 4. Prepare a report on the competition in the Aviation
and market prices, real GDP and nominal GDP, Sector in India with reference to:
National Disposable Income (Gross and Net), GDP (a) Performance of the Public Sector and Private
and Welfare, GDP as an indicator of Economic Sector.
welfare. (b) Operational strategies adopted by budget/low
(iii) Methods of measuring National Income: cost carriers.
product or value-added method; income 5. Make a comparative analysis of lending performance
method and expenditure method with simple of five Commercial Banks in the past six ears with
numericals based on them. reference to the changing CRR and SLR.
Simple numericals based on all the methods to be 6. Many thinkers believe that we are rapidly depleting
covered for better understanding of the concept. our natural resources. Assume that there are only two
Precautions and difficulties of measuring National inputs (labour and natural resources) producing two
Income for each method. goods (wheat and gasoline) with no improvement in
PAPER II – PROJECT WORK – 20 Marks technology over time. Show what would happen to
the Production Possibility Curve over time as natural
Candidates will be expected to have completed two
resources are exhausted. How would invention and
projects from any topic covered in Theory.
technological improvement modify your answer?
The project work will be assessed by the teacher and a On the basis of this example, explain why it is said
Visiting Examiner appointed locally and approved by “economic growth is a race between depletion and
the Council. invention.”
Mark allocation for each Project [10 marks]: 7. Make a comparative study of the allocation of financial
resources of the Central Government Budget on
Overall format 1 mark Agriculture, Defence, Industry and Education in the
Content 4 marks last ten years. Prepare a report on your observations.
Findings 2 marks 8. Prepare a trend Analysis of Growth and Productivity
Viva-voce based on the Project 3 marks of any one industry such as:
Textile / Automobiles / Electronic and Tele-
A list of suggested Projects is given below: communication, etc. in India for the past ten years.
1. Study a Public Sector Enterprise with reference to NOTE: No question paper for Project Work will be set by
its relevance to the Indian Economy and its future the Council.


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SAMPLE TABLE FOR PROJECT WORK
PROJECT 1 PROJECT 2 TOTAL
Unique A B C D E F G H I J MARKS
Identification
S. Number Teacher Visiting Average Viva- Total Teacher Visiting Average Viva- Total (E+J)
No. (Unique ID) Examiner Marks Voce by Marks Examiner Marks Voce by Marks
of the (A + B ÷ 2) Visiting (C + D) (F + G Visiting (H + I)
candidate Examiner ÷ 2) Examiner
7 Marks* 7 Marks* 7 Marks 3 Marks 10 Marks 7 Marks* 7 Marks* 7 Marks 3 Marks 10 Marks 20 Marks
1
2
3
4
5
6
7
8

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9
10

*Breakup of 7 Marks to be awarded separately by the Teacher and Name of Teacher:

the Visiting Examiner is as follows:
Signature: Date
Overall Format 1 Marks
Content 4 Marks Name of Visiting Examiner :
Findings 2 Marks
Signature: Date

NOTE: VIVA-VOCE (3 Marks) for each Project is to be conducted only by the Visiting Examiner, and should be based on the Project only.