ICSE Class 10 Question Paper 2026 Economic Applications

ICSE | Class 10

Economic
Applications
Question Paper 2026

Council for the Indian School Certificate Examinations (CISCE)

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ECONOMIC APPLICATIONS

Maximum Marks: 100

Time allowed: Two hours

1. Answers to this Paper must be written on the paper provided separately.

2. You will not be allowed to write during the first 15 minutes.

3. This time is to be spent in reading the question paper.

4. The time given at the head of this Paper is the time allowed for writing the answers.

5. Attempt all questions from Section A and any four questions from Section B.

6. The intended marks for questions or parts of questions are given in brackets[ ].

Instruction for the Supervising Examiner

Kindly read aloud the Instructions given above to all the candidates present in the
Examination Hall.

This paper consists of 12 printed pages.
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ICSE Class 10 · Question Paper 2026 · Economic Applications Page 1 of 12

SECTION A (40 Marks)
(Attempt all questions from this Section.)

Question 1 [20]
Choose the correct answers to the questions from the given options.
(Do not copy the questions, write the correct answers only.)
(i) The type of profit earned by a perfectly competitive firm in the long run is called:

(a) Real profit

(b) Normal profit

(c) Super-normal profit

(d) Abnormal profit

(ii) Assertion (A): In case of substitute goods, demand for a commodity falls with
the fall in price of the substitute commodity.
Reason (R): In case of complementary goods, demand for a commodity rises
with a fall in the price of complementary commodity.

(a) (A) is true and (R) is false.

(b) (A) is false and (R) is true.

(c) Both (A) and (R) are true and (R) is the correct explanation of (A).

(d) Both (A) and (R) are true but (R) is not the correct explanation of (A).

(iii) The price of a commodity falls from ₹ 8 to ₹ 6. The quantity supplied falls from
100 units to 80 units. The price elasticity of supply is:

(a) 0.0008

(b) 8.0

(c) 0.8

(d) 00.008

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(iv) Circulating capital is used once in production, whereas __________ capital can
be used again and again.

(a) fixed

(b) floating

(c) debt

(d) sunk

(v) If the price of the commodity decreases from ₹ 70 per unit to ₹ 60 per unit, and
the quantity demanded remains the same, then the price elasticity of demand for
that commodity will be:

(a) infinite

(b) zero

(c) one

(d) less than one

(vi)

The above image can be identified as __________ goods.

(a) substitute

(b) inferior

(c) normal

(d) complementary

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(vii) Match the following:

1. Expansion of supply P. Rightward shift of supply curve.
2. Increase in supply Q. Upward movement along a supply
curve.
3. Decrease in supply R. Downward movement along a supply
curve.
4. Contraction in supply S. Leftward shift of supply curve.

(a) 1-P, 2-Q, 3-S, 4-R

(b) 1-Q, 2-R, 3-P, 4-S

(c) 1-Q, 2-P, 3-S, 4-R

(d) 1-R, 2-S, 3-P, 4-Q

(viii) 24-carat gold is an example of a __________.

(a) Perfectly competitive market

(b) Monopolistically competitive market

(c) Monopoly market

(d) Monopsony market

(ix) An impact of urbanisation on the environment is:

(a) growth of hygienic slums.

(b) lack of proper drainage facilities.

(c) high growth of natural habitat.

(d) less industrialisation.

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(x) Identify the type of capital good from the given image:

(a) Sunk Capital

(b) Fixed Capital

(c) Money Capital

(d) Circulating Capital

(xi) In which of these production processes is division of labour NOT possible?

(a) Manufacturing textiles

(b) Automobile production

(c) Production of Steel

(d) Painting a picture

(xii) Identify the tax which is most likely to create civic consciousness.

(a) Income tax

(b) Goods and Services tax

(c) Entertainment tax

(d) Customs duty

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(xiii) Capital goods which can be used in various lines of production is ___________.

(a) Debt capital

(b) Social capital

(c) Floating capital

(d) Real capital

(xiv) Mrs. Lal, an entreprenuer, appoints managers and supervisors to look after the
day-to-day functioning of her company. Which function is she performing?

(a) Innovation

(b) Delegation

(c) Planning

(d) Risk bearing

(xv) Which section of the society is adversely affected by inflation?

(a) Wage earners

(b) Producers

(c) High Income Group

(d) Fixed Income Group

(xvi) Assertion (A): Stationery owned and used by a student is not a capital.

Reason (R): A student does not perform any economic activity with the
stationery.

(a) (A) is true and (R) is false.

(b) (A) is false and (R) is true.

(c) Both (A) and (R) are true and (R) is the correct explanation of (A).

(d) Both (A) and (R) are true but (R) is not the correct explanation of (A).

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(xvii) When money is used to settle debts or make payments in the future, it is said to
perform the function of:

(a) Standard of deferred payment

(b) Measure of value

(c) Store of value

(d) Medium of exchange

(xviii) Identify the degree of elasticity from the curve given below.

(a) eS < 1

(b) eS > 1

(c) eS = 1

(d) eS = α

(xix) A policy under which the government uses its expenditure and revenue
programmes to produce a desirable effect on the national income, production and
employment is ____________.

(a) Monetary Policy

(b) Wage Policy

(c) Fiscal Policy

(d) Price Policy

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(xx) Which of the following can cause a rightward shift of the supply curve for
vegetables?

(a) Increase in the price of vegetables

(b) Decrease in the price of vegetables

(c) Increase in the wages of farm labourers

(d) Increase in the subsidy given by the government

Question 2
(i) ‘Capital is the result of Past labour.’ Justify. [2]

(ii) ‘The Government introduces subsidies for solar panel producers to promote [2]
renewable energy.’ Give a graphical representation of the impact on a supply
curve.

(iii) Mention a way by which direct tax can reduce income inequality. [2]

(iv) State the role of the public sector in creating a strong industrial base. [2]

(v) What is hyperinflation? [2]

Question 3
(i) State two similarities between monopolistic competition and monopoly [2]
competition.

(ii) ‘A worker in a factory is experiencing fatigue and lack of motivation due to [2]
repetitive tasks.’
Explain the disadvantage of division of labour stated above.

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(iii) Calculate price elasticity of supply on the basis of the following data: [2]

Price (₹) Quantity (kg)
10 200
15 225
(iv) State a difference between Inferior goods and Giffen goods. [2]
(v) Explain form utility with an example. [2]

SECTION B (60 Marks)
(Answer any four questions from this Section.)

Question 4
(i) [7]

Image 1 Image 2
(a) Identify the two types of market forms depicted above in Image 1 and
Image 2.
(b) State any one difference between the identified forms of markets.
(c) Explain three features of the market form identified by you in Image 2.

(ii) (a) What is perfectly elastic supply? [8]
(b) Explain how the following factors determine the price elasticity of supply:
1. Time horizon
2. Cost of production
3. Production technology

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Question 5
(i) [7]

(a) Identify and explain the concept shown in the above image.

(b) What is land?

(c) Land has alternative uses. Explain.

(ii) ‘The principal function of any Commercial Bank is to accept deposits from [8]
different individuals and institutions.’ On the basis of this statement, answer the
following:

(a) What is a savings bank account?

(b) Compare the rate of interest of fixed deposit and savings bank account.

(c) Give any two advantages of depositing money with Commercial Banks.

Question 6
(i) (a) What is Privatisation? [7]

(b) Elaborate the following arguments in favour of privatisation:

1. Greater flexibility in decision making

2. Creation of competitive environment

3. Greater investment, employment and income opportunities

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(ii) Explain the following functions of money: [8]

(a) Measure of value

(b) Maximisation of profit

Question 7

(i) [7]

(a) Which type of tax is indicated in the above graph? Explain.

(b) Give any two differences between regressive tax and the type of tax
mentioned by you in (a) above.

(ii) (a) Explain Open Market Operations (OMO). [8]

(b) Describe any one quantitative method of credit control.

Question 8
(i) (a) Why is labour perishable? [7]

(b) ‘The efficiency of workers in India is observed to be lower than that in the
economically advanced countries of the world.’
Explain any three causes of low level of efficiency of workers in India.

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(ii) (a) Distinguish between expansion of demand and increase in demand on the [8]
basis of meaning, schedule and graph.

(b) State the law of demand.

Question 9
(i) Read the extract given below and answer the questions that follow: [7]

India’s retail inflation hit a six-year low, but state-wise data reveals significant
variations. Ten states and union territories, including Kerala, Punjab and
Jammu and Kashmir, experienced inflation rates exceeding the national average
of 2.7% in the first quarter. Food, fuel, and personal care costs were key drivers,
with differing state-level weights contributing to the upward bias.
— Anoushkha Sawhney, ET, July 17, 2025

(a) What is inflation?

(b) Explain any two favourable impacts of mild inflation on the economy of a
country.

(c) What are the key drivers of inflation according to the above extract?

(ii) (a) Explain one important function of the Reserve Bank of India. [8]

(b) State a difference between Loan and Overdraft.

(c) Mention any two agency functions of Commercial Bank.

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