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Exam Review

Key Facts: NEB Class 12 Economics Exam

75

Theory Marks

25

Internal Assessment Marks

3 hours

Theory Paper Duration

35%

Minimum Theory Score

NEB

Conducting Board

The NEB Class 12 Economics examination is conducted by the National Examinations Board (NEB) of Nepal. It consists of a 75-mark written theory paper (3 hours) plus 25 marks of internal assessment, and students need at least 35% in theory to avoid a Non-Graded (NG) result. OpenExamPrep offers free independent practice questions on microeconomics, macroeconomics, development economics, the Nepalese economy and quantitative techniques. OpenExamPrep's questions are an independent English-language multiple-choice study adaptation of the curriculum topics. They are not an official translation of the board paper or a simulation of its written format.

Sample NEB Class 12 Economics Practice Questions

Try these sample questions to review concepts for the NEB Class 12 Economics exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 94+ question experience with AI tutoring.

1Why does every economy face the basic economic problem of choice?
A.Because wants are unlimited while resources are limited and have alternative uses
B.Because money is always in short supply even when goods and resources are plentiful
C.Because governments forbid people from producing more than a fixed quota of goods
D.Because each resource has only a single use, so it can never be shifted to another use
Explanation: Scarcity means that resources such as land, labour, capital and time are limited relative to unlimited human wants, and most resources have alternative uses. Because not every want can be satisfied, individuals, firms and governments must choose which wants to satisfy and how to use their resources. This is the root of the economic problem of choice: what, how and for whom to produce.
2A farmer can use one plot of land to grow paddy worth NPR 30,000, to grow maize worth NPR 22,000, or to rent it out for NPR 18,000. If the farmer grows paddy, what is the opportunity cost of that choice?
A.NPR 40,000, the sum of the maize and the rent given up
B.NPR 22,000, the value of the next best alternative (maize)
C.NPR 18,000, the value of the least attractive alternative given up
D.NPR 30,000, the value of the paddy actually produced
Explanation: Opportunity cost is the value of the next best alternative given up when a choice is made. Once paddy is chosen, the alternatives are maize (NPR 22,000) and renting (NPR 18,000); the next best is maize, so the opportunity cost of growing paddy is NPR 22,000. The alternatives are not added together, because the same land could not have been used for both at once.
3Why is a production possibility curve (PPC) normally concave (bowed outward) to the origin?
A.Because the economy always has some unemployed or idle resources
B.Because the opportunity cost of producing each extra unit of one good stays constant
C.Because resources are not equally suited to all uses, so opportunity cost rises
D.Because technology keeps improving as the economy moves along the curve
Explanation: Moving along a PPC, the economy must give up increasing amounts of one good to produce each extra unit of the other, because resources are specialized and not perfectly adaptable between uses. This increasing marginal opportunity cost (a rising marginal rate of transformation) makes the PPC bow outward, that is, concave to the origin.
4An economy is producing at a point inside its production possibility curve. What does this indicate?
A.The economy is producing beyond its productive capacity
B.Resources are fully employed and used with maximum possible efficiency
C.The economy's technology has just improved
D.Some resources are unemployed or are being used inefficiently
Explanation: Points on the PPC show the maximum combinations of goods attainable when all resources are fully and efficiently employed. A point inside the curve means the economy could produce more of at least one good without producing less of the other, so some resources are idle (unemployed) or are being used inefficiently.
5Which of the following changes would shift Nepal's production possibility curve outward (to the right)?
A.New irrigation schemes and improved seed varieties raise the productivity of farmland
B.A large share of the working-age labour force leaves the country for foreign employment
C.A major earthquake destroys roads, factories and irrigation canals
D.Factories cut output for a few months during a temporary fall in demand
Explanation: The PPC shifts outward when the economy's productive capacity grows, through more or better resources (labour, capital, land) or improved technology. Better irrigation and seed varieties raise output from the same resources, so the curve shifts outward.
6Deciding what goods to produce, how to produce them and for whom to produce them is known as the economic problem of:
A.Division of labour
B.Allocation of resources
C.Price discrimination
D.Balance of payments
Explanation: Because resources are scarce and have alternative uses, every economy must allocate them among competing uses. Allocation of resources covers the central problems of what to produce and how much, how to produce (which technique), and for whom to produce (distribution of output), together with making full and efficient use of resources.
7Which of the following is a disadvantage of division of labour for workers?
A.Workers become more skilful at their single repeated task
B.Simple repeated operations make it easier to use machines
C.Repeating one small task causes monotony and loss of all-round skill
D.Time is saved because workers no longer move from one task to the next one
Explanation: Division of labour raises efficiency, but it has drawbacks: endlessly repeating a small part of a job causes boredom (monotony), workers lose the craft skill of making a complete product, they become dependent on others, and they risk losing work when their narrow task is mechanized.
8In which economic system do private and public sectors both own means of production, with prices set mainly by the market while the state regulates the economy and runs key sectors?
A.Market (capitalist) economy
B.Command (socialist) economy
C.Barter economy
D.Mixed economy
Explanation: A mixed economy combines features of the market and command systems: private and public sectors coexist, the price mechanism guides most decisions, and the government plans, regulates and provides public goods and key services to correct market failures. Nepal's Constitution describes an economy built on the participation of public, private and cooperative sectors, a mixed system.
9Under the TR-TC approach to a firm's equilibrium, at what output does a firm maximize its profit?
A.Where total revenue (TR) is exactly equal to total cost (TC)
B.Where TR exceeds TC by the largest vertical distance
C.Where total revenue is at its maximum
D.Where total cost is at its minimum
Explanation: Profit equals total revenue minus total cost (TR - TC). The firm is in equilibrium at the output where TR exceeds TC by the largest amount, that is, where the vertical gap between the TR curve (above) and the TC curve (below) is greatest. At that output the slopes of TR and TC are equal, which is the MR = MC condition.
10A shopkeeper runs a business in a building they own instead of renting it out for NPR 20,000 a month. In economics, this rent given up is treated as a(n):
A.Explicit cost
B.Implicit cost
C.Sunk cost recorded in the cash book
D.Variable cost
Explanation: Explicit costs are actual money payments to outsiders, such as wages, rent paid and raw material bills. Implicit costs are the opportunity costs of using the owner's own resources, here the rent the owner gives up by using their own building. Economic cost includes both explicit and implicit costs, while accounting cost records only explicit costs.

About the NEB Class 12 Economics Exam

The NEB Class 12 Economics examination is the national board examination for Grade 12 students in Nepal who take Economics, based on the Curriculum Development Centre (CDC) curriculum. It covers basic concepts, microeconomics, macroeconomics, development economics, the Nepalese economy and quantitative techniques. OpenExamPrep's questions are an independent English-language multiple-choice study adaptation of the curriculum topics. They are not an official translation of the board paper or a simulation of its written format.

Exam sponsor: National Examinations Board (NEB), Nepal. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Written board examination: a 75-mark written theory paper (3 hours) plus 25 marks of internal assessment.

Time Limit

3 hours (theory paper)

Passing Score

At least 35% in the theory paper (below that: Non-Graded, NG)

Exam / Certification Fees

Set annually by NEB; paid through the school

Exam sponsor website

Reported exam pass rate: Not published by subject. Under NEB's letter-grading rules, a theory score below 35% is recorded as Non-Graded (NG) for that subject. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

9% of practice bank

Basic Concepts of Economics

Economic concepts, economic systems and basic tools of analysis.

28% of practice bank

Microeconomics

Demand, elasticity, production, costs, revenue, markets and factor pricing.

29% of practice bank

Macroeconomics

National income, consumption, investment, the multiplier, money, banking and inflation.

10% of practice bank

Development Economics

Economic growth and development, indicators and development planning.

13% of practice bank

Nepalese Economy

Nepal's agriculture, industry, trade, remittances, public finance and planning.

13% of practice bank

Quantitative Techniques

Equations, graphs, derivatives and statistical tools used in economics.

Preparing for the NEB Class 12 Economics Exam

What You Need to Know

  • Passing score: At least 35% in the theory paper (below that: Non-Graded, NG)
  • Assessment: Written board examination: a 75-mark written theory paper (3 hours) plus 25 marks of internal assessment.
  • Time limit: 3 hours (theory paper)
  • Exam / certification fees: Set annually by NEB; paid through the school Official sources

Using Our Practice Resources

  • Work through all 94 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

NEB Class 12 Economics: Suggested Study Strategy

1Practise drawing accurate diagrams for consumer equilibrium, cost curves and market equilibrium.
2Solve numericals on elasticity, national income, the multiplier and equilibrium price and quantity.
3Keep up to date with official figures on Nepal's economy from the latest Economic Survey and periodic plan.
4Revise the quantitative tools (equations, graphs and simple derivatives) used in economic analysis.

Frequently Asked Questions

What is the format of the NEB Class 12 Economics examination?

The official assessment is a 75-mark written theory paper (3 hours) plus 25 marks of internal assessment. It is a written board examination, not a multiple-choice test.

What score is needed to pass NEB Class 12 Economics?

Under NEB's letter-grading rules, students need at least 35% of the theory marks. A lower theory score is recorded as Non-Graded (NG) for the subject.

What happens if a student is Non-Graded (NG) in Economics?

Students who are NG in up to two subjects can sit the grade-increment (supplementary) examination announced by NEB after the results; others take the subject again in a later regular examination.

Are these practice questions official NEB papers?

No. OpenExamPrep's questions are an independent English-language multiple-choice study adaptation of the curriculum topics. They are not an official translation of the board paper or a simulation of its written format. OpenExamPrep is independent and is not affiliated with or endorsed by NEB or the Curriculum Development Centre (CDC).