ISC 2026 Economics Improvement Examination Question Paper for Class 12

About this paper

This is the ISC Class 12 Economics paper from the 2026 Improvement Examination, code 1226-856-IE. It carries 80 marks and runs for three hours, with fifteen minutes extra for reading only. All thirteen questions are compulsory. Section A has sixteen one-mark parts. Section B has eight four-mark questions, and Section C has four eight-mark questions. Internal choices are given in two questions in Section B and in one question in Section C. The paper includes a cut in customs duty on edible oils, the saving function S = −237 + 0.6Y, Foxconn’s planned investment in India, and a passage on fixed-deposit rates after the RBI cut the repo rate from 6.5 per cent to 5.5 per cent. This copy has the questions only.

Exam

ISC Class 12

Subject

Economics

Year

2026

Paper code

1226-856-IE

Maximum marks

80

Time allowed

3 hours + 15 min reading

Questions

13

Pages

12

Answers included

No, questions only

Paper pattern

• Section A

  16 marks

  Question 1: sixteen very short parts, one mark each

• Section B

  32 marks

  Questions 2–9, four marks each; internal choice in two questions

• Section C

  32 marks

  Questions 10–13, eight marks each; internal choice in one question. Question 13 is a passage on repo and fixed-deposit rates

Topics covered

• Price elasticity of demand and supply
• Utility
• Perfect competition
• Monopoly and monopolistic competition
• Costs and returns
• Indifference curves
• Saving and investment
• Government budget and fiscal deficit
• Balance of payments
• National income
• Inflation and monetary policy

Questions from this paper

1. Sitara gets 5 utils from the 6th chocolate and 70 utils from six chocolates. What is her total utility from five chocolates?
2. A housewife’s purchase of groceries is an intermediate good. Defend or refute this, with a reason.
3. Draw a demand curve that has unit price elasticity at every point.
4. What is deficit financing?
5. Rohan usually buys 10 packets of salted cashews a month. When the price falls to ₹80 he buys 14. If the price elasticity of demand is 2, find the original price.
6. In the saving function S = −237 + 0.6Y, identify dissaving and the marginal propensity to save.