Exam Details
| Subject | general economics | |
| Paper | paper 1 | |
| Exam / Course | indian economic service and indian statistical service examination (ies/iss) | |
| Department | ||
| Organization | union public service commission | |
| Position | ||
| Exam Date | 2015 | |
| City, State | central government, |
Question Paper
State and explain Kaldor -Hicks compensation principle.
The demand function Q1 50 -P1 intersects another demand function Q2 at price P 10. The elasticity of demand for Q2 is six times larger than that of Q1 at that point. Find out the demand function for Q2.
Suppose the Government as a monopolist firm produces electricity and sells it to people at price per unit The demand function for the electricity, of the people is q If the elasticity of demand for electricity in absolute sense is found to be 0.894, should the Government increase the price per unit to increase the revenue? Justify your answer.
Suppose that there are two goods, namely chocolate cake and ice-cream, such that there might well be some optimal amount. of chocolate cake and ice-cream that a consumer would want to eat per week. Any less than that amount would make her worse off, but any more than that amount would also make her worse off. Find the shape of the indifference curve and justify your answer.
Define consumer's and proiucer's surplus Given the demand function pL= 113-q^2ane the supply function p under perfect competition, find out the cOLsumers' surplus and producers' surplus.
Elucidate the statement that D.O economic rent is earned when the supply of a factor is perfectly elastic.
Explain the concept of social welfare. Does perfect competition ensure maximum social welfare?
Show that in a translog production function, elasticity of substitution is not constant.
Define and distinguish between level of significance and confidence interval. What do you mean by 'power of the test'
Find out the total demand for industries 2 and if the coefficient matrix A and final vector B are given as
A
0·3 0·4 0·1
0.5 0.2 0.6
0·1 0·3 0·1
B
20
10
30
Explain the distinction between the parametric and non-parametric tests.
2. Consider the utility function as U sqrt(q1 q2) where q1 and q2 are two commodities on which the consumer spends his entire income of the month. Let the price per unit of ql and q2 be Rs 40 and Rs 16 respectively and the monthly income of the consumer be Rs 4,000. Find out the optimal quantities of ql1 and Q2
3. Define Linear homogenous production function and give an example. Show that in the case of the linear homogenous production function the expansion path must be a straight line passing through the origin.
4. How can you graphically derive the long-run marginal cost curve from the short-run marginal cost curves?
5. What is meant by excess capacity? Why is it bad Are there any benefits of the excess capacity associated with monopolistic competition?
6. How is the monopoly power measured? State Lerner's measure of degree of monopoly power. Show that the degree of monopoly power is the inverse of the price elasticity of demand.
7. Derive the long-run supply curve in the constant cost industry under perfect competition. Under what conditions can the long-run supply curve of a competitive industry slope downward?
8. Consider the competitive market with excise tax such that the supplier receives the price netted of tax. Answer the following questions.
What is the equilibrium price in the presence of tax?
Under which condition will the price be undefined?
Show that the market price is t:>tally unaffected in the case of perfectly inelastic supply curve.
If the tax yield is a fraction which ii3 the rate of tax) of quantity find out the tax yield and the conditions under which tax yield. varies directly with the rate of tax
Find out the value of the rate of tax such that the tax. yield is maximum.
9. What do you mean by collusive oligopoly? Distinguish between cartel and price-leadership with respect to the determination of price and quantity. Write a note on barometric price-leadership model.
10. Consider a simple model of classical regression as Yi BXi ui, where ui stands for random disturbance term with the standard assumptions and ui cry, and xi is non-stochastic and i n.
Find out the OLS estimator for say J30lS .
Show that the OLS estimator for is BLUE Prove ab-initio.
Prove that B where Y and X are means respectively, is unbiased but less efficient 1 estimator of B than BOLSS.
11.(a) Consider the Leontief static input-output model along with its assumptions. How can you confirm that the model is either open or closed? State the fundamental objective of Leontief static open input-output model.
State the Hawkins-Simon condition and explain its economic meaning and significance.
Derive the consumption possibility locus.
The demand function Q1 50 -P1 intersects another demand function Q2 at price P 10. The elasticity of demand for Q2 is six times larger than that of Q1 at that point. Find out the demand function for Q2.
Suppose the Government as a monopolist firm produces electricity and sells it to people at price per unit The demand function for the electricity, of the people is q If the elasticity of demand for electricity in absolute sense is found to be 0.894, should the Government increase the price per unit to increase the revenue? Justify your answer.
Suppose that there are two goods, namely chocolate cake and ice-cream, such that there might well be some optimal amount. of chocolate cake and ice-cream that a consumer would want to eat per week. Any less than that amount would make her worse off, but any more than that amount would also make her worse off. Find the shape of the indifference curve and justify your answer.
Define consumer's and proiucer's surplus Given the demand function pL= 113-q^2ane the supply function p under perfect competition, find out the cOLsumers' surplus and producers' surplus.
Elucidate the statement that D.O economic rent is earned when the supply of a factor is perfectly elastic.
Explain the concept of social welfare. Does perfect competition ensure maximum social welfare?
Show that in a translog production function, elasticity of substitution is not constant.
Define and distinguish between level of significance and confidence interval. What do you mean by 'power of the test'
Find out the total demand for industries 2 and if the coefficient matrix A and final vector B are given as
A
0·3 0·4 0·1
0.5 0.2 0.6
0·1 0·3 0·1
B
20
10
30
Explain the distinction between the parametric and non-parametric tests.
2. Consider the utility function as U sqrt(q1 q2) where q1 and q2 are two commodities on which the consumer spends his entire income of the month. Let the price per unit of ql and q2 be Rs 40 and Rs 16 respectively and the monthly income of the consumer be Rs 4,000. Find out the optimal quantities of ql1 and Q2
3. Define Linear homogenous production function and give an example. Show that in the case of the linear homogenous production function the expansion path must be a straight line passing through the origin.
4. How can you graphically derive the long-run marginal cost curve from the short-run marginal cost curves?
5. What is meant by excess capacity? Why is it bad Are there any benefits of the excess capacity associated with monopolistic competition?
6. How is the monopoly power measured? State Lerner's measure of degree of monopoly power. Show that the degree of monopoly power is the inverse of the price elasticity of demand.
7. Derive the long-run supply curve in the constant cost industry under perfect competition. Under what conditions can the long-run supply curve of a competitive industry slope downward?
8. Consider the competitive market with excise tax such that the supplier receives the price netted of tax. Answer the following questions.
What is the equilibrium price in the presence of tax?
Under which condition will the price be undefined?
Show that the market price is t:>tally unaffected in the case of perfectly inelastic supply curve.
If the tax yield is a fraction which ii3 the rate of tax) of quantity find out the tax yield and the conditions under which tax yield. varies directly with the rate of tax
Find out the value of the rate of tax such that the tax. yield is maximum.
9. What do you mean by collusive oligopoly? Distinguish between cartel and price-leadership with respect to the determination of price and quantity. Write a note on barometric price-leadership model.
10. Consider a simple model of classical regression as Yi BXi ui, where ui stands for random disturbance term with the standard assumptions and ui cry, and xi is non-stochastic and i n.
Find out the OLS estimator for say J30lS .
Show that the OLS estimator for is BLUE Prove ab-initio.
Prove that B where Y and X are means respectively, is unbiased but less efficient 1 estimator of B than BOLSS.
11.(a) Consider the Leontief static input-output model along with its assumptions. How can you confirm that the model is either open or closed? State the fundamental objective of Leontief static open input-output model.
State the Hawkins-Simon condition and explain its economic meaning and significance.
Derive the consumption possibility locus.