£-30
Entrance Examination, February 2014
M.A. (Economics) 2 Hours Max.Marks:100
HALL TICKET NUMBER

INSTRUCTIONS
1.
Read these instructions carefully before answering.

2.
Enter your Hall Ticket Number on this page and also on the OMR answer sheet

3.
Answers are to be marked on the OMR answer sheet following the instructions provided thereupon.

4.
Hand over the OMR answer sheet at the end ofthe examination to the Invigilator.

5.
Use of non-programmable calculator is allowed.

6.
The Question Paper has two parts -PART-A and PART-B. There are 100 questions in this paper: 25 questions in Part-A and 75 questions in Part-B. Marks obtained in Part-A will detennine themeritrankincaseofa tieinthetotalnumberofmarks obtained.

7.
Each correct answer carries one mark.

8.
There is negative marking. Each wrong answer carries -0.33 mark.

9.
This question paper contains 19 pages excluding the cover page. In addition, two blank pages (pages 20 and 21) for rough work are provided at the end of the question paper marked "ROUGH WORK".



£-30

M.A. Entrance Examination, February 2014
School of Economics
Max.Marks:l00 Time:2 Hours
Part (Ansver all 25 Questions)
Block pricing by electricity companies is an example of

First Degree Price Discrimination


Second Degree Price Discrimination


Third Degree Price Discrimination


None ofthese


2. If the prices of both goods increase by the same percent, the budget line will

Shift parallel to the right


Shift parallel to the left


Pivot about the x axis


Pivot about the y axis


3. The cost of a factory with specialized equipment that is of no use in another industry, is an example of

Fixed Cost


Variable Cost


Sunk Cost


Opportunity Cost


4. In comparison to the quasi-competitive solution which ofthe following statement is true?

Cournot Duopolists produce smaller total output for smaller profits at higher prices


Coumot Duopolists produce larger total output for smaller profits at higher prices


Coumot Duopolists produce smaller total output for higher 'profits at lower prices


Coumot Duopolists produce smaller total output for higher profits at higher prices


1
II
I



5. If the prices of ice-cream and chocolate are Rs. 40 and Rs. 30 respectively, and the marginal utility of chocolate is 150, what is the marginal utility of ice cream assuming the consumer is at equilibrium?
112.5
200
225
125
6. If all households in a nation receive the same income, the nation's Lorenz curve would:

Be vertical


Be horizontal


Be a 45° line


Be a 60° line


7. For a natural monopoly, economies of scale

Exist due to patent protection


Cause legal barriers to entry


Exist over in the long-run average cost curve over the entire range of output


None of the above


8. What is the shape ofthe isoquants when inputs are perfect substitutes?

L -Shaped


U -Shaped


Straight Lines


Vertical Lines


9. Why do people over age 65 have difficulty buying medical insurance at almost any price?

Asymmetric Information


Symmetric Information


Market Signaling


Moral Hazard


10. Cigarette smoking is an example of

Positive Production Externality


Negative Production Externality


Positive Consumption Externality


Negative Consumption Externality


2

11. The equation s/v in the Marxist Political-Economy is the same as:
The Rate of Exploitation The Rate of Surplus Surplus Labour Time/Necessary labour Time All the above
12. The transition from feudalism to capitalism is dated between what period of time in History?
Between 9th and 13th century Between 16th and 19th Century Between 14th and 16th Century Between 9th and 16th Century
13. The Organic composition of capital is given by
Clv
14. According to Marx, between the 14th and intluenceofthe rules pertaining to the length of the the 17th Century what working day in Europe? had been the
The length ofthe working day was increasing The length of the working day was decreasing The length ofthe working day was static The length ofthe working day was
15. The value of a commodity according to Marx is:
Directly related to productivity Unrelated to productivity Indirectly related to productivity Inversely related to productivity
16. Raw material in the Marxist political Economy is characterized as:
Variable Capital Non-Capital Constant Capital Marginal Capital
3

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17. The capitalist form of circulation of commodities in the Marxian analysis is represented by











18. In the Marxist analysis of Surplus value, the surplus value which the working day of one labourer supplies multiplied by the number of labourers employed gives:

Mass of surplus


Rate of surplus


Extended Surplus


Intensive Surplus


19. An increase in the price of a commodity when demand is inelastic causes the total expenditures of consumers of the commodity to

Increase


Decrease


Remain unchanged


Any ofthe above


20. Slutsky keeps real income constant when the price of a commodity falls by

Keeping the consumer on the same indifference curve


pushing the consumer to a lower indifference curve


Allowing the consumer to purchase the same basket of goods as before the price change


Allowing the consumer to purchase more of both commodities than before the price changes.


21. Wh ich of the following is not an assumption of the theory of revealed preference?

A cardinal measure of utility


Consistency


Transitivity


A consumer can be induced to purchase any basket of commodities if its price is. made sufficiently attractive.


22. The cost that a firm incurs in purchasing or hiring any factor of production is referred to as

Explicit cost


Implicit cost


Variable cost


Fixed cost


4


23. When a and for the Cobb-Douglas production function, returns to scale are

Constant


Increasing


Decreasing


First increasing and then decreasing


24. The best or optimum level of output for a perfectly competitive firm is given by the point where

MR equals AC


MR equals MC


MR exceeds MC by the greatest amount


MR equals MC and MC is rising.


25. When the perfectly competitive firm and industry are both in long run equilibrium

P=MR=SMC=LMC


P=MR=SAC=LAC


P=MR=lowest point on the LAC curve


All ofthe above


5

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Part (Answer all 75 Questions)
26.' Find the price elasticity ofdemand for the curvilinear demand function of the form Q p-b




b


1


None ofthe above.


27. Inflation measures change in

Absolute prices


Relative prices


Both absolute and relative prices


All of the above


28. Deflation is

Increase in general price level


Inflation and economic stagnation occurs simultaneously


Decrease in general price level


Decrease in rate of inflation


29. index is

Base year price index


Base weighted price index


End year price index


End year weighted price index


30. Rate of unemployment is calculated as

Percentage ofnumber unemployed to total population


Percentage of number unemployed to Labor Force


Percentage of number unemployed to skilled population


None of the Above


31. The name of Francois Quesnayis associated with

Input-output method


General Equilibrium Theory


Marginal Cost Theory


Tableau Economique


6





32.
Division of Labouf in Adam Smith's analysis implies

33.
Which of the following names is associated with theory of Entrepreneurship


Research and Development
Human Deveopment
Specialisation
Multi-tasking activity


Alfred Chandler


Frank Knight


Joseph Schumpeter


Graham Pyatt


34. The economist who defined economics as a science studying human behavior as a relation between 'ends and scarce means' was:

Afred Marshall


Lionel Robbins


Samuelson


Pigou


35. Twelfth Five Year Plan in India pertains to the period:

2012-2017


2012-2016


2011-2015


2011-2016


36. In conventional economic approach,the demand for labour is characterized as

Necessary Demand


Inelastic Demand


Upwardly Sloping Demand


Derived Demand


37. The method of estimation of national income adopted by the CSO in India is a combination of

The product and income Methods;


The product and expenditure Methods;


The income and expenditure Methods;


All ofthe above


7

38. Contributions of six industrial sectors, viz., Agriculture, Forestry logging, Fishing, Mining Quarrying, Manufacturing, and Construction to the National Income in India is through:

Income method;


Expenditure method


Product method


A combination of any two of the above methods


39. The concept that is used to represent the total income of own account workers as well as the profit generated in unincorporated enterprises in the national income data in India is:

Informal income


Marginal Income


Unregistered Income


Mixed Income


40. What were the methods used to assess economic activity prior to the development of national income concept?

Human Development Indices


Crude Development Indices


Indices of sectoral incomes money supply.


Indices of Economic Progress


41. The statement 'Census is carried out on all Self-employed, Family enterprises, Small and tiny enterprises and Non-wage, non-salaried services' for calculating national income data is

True


False


True in more recent context


Cannot say


42. As part of the estimations of savings data in India, the household savings are divided into which of the following categories:

Current and Future savings


Precautionary and Speculative savings


Financial and Physical savings


Current and Capital savings


8
£.

43.
Which of the following categories are part of the NAS classification of the organizational patterns in India?

44.
Which ofthe following organizations supplies data on State Domestic Product in India?


Organised and Unorganised
Formal and Informal
Modern and Traditional
Capitalist and Artisanal


National Sample Survey Organisation (NSSO)


Organisation for Federal Data


Reserve Bank of India


Indian Council for Applied Economic Research (ICAER)


45. If the rise in the implicit price deflator for the primary sector was higher than for the NDP as a whole, while the rise in those of the secondary and tertiary sectors were lower, it can be inferred that:

The primary sector got a differential advantage over the other two sectors


The other two sectors got a differential advantage over the primary sector


It is inconsequential


All the three sectors are mutually benefited


46. The Current weighted price index is otherwise also known as:

Pasche's Index


Fischer's Index


Paasche's Index


Lespeyre's Index


47. Compounded Annual Growth Rates (CAGR) is calculated on the basis of:

(End Value/Starting Value) IlNumber ofVears


(End Value/Starting Value) IN umber of Years


(Starting Value/End Value) IlNumbcrofYears


(Starting Value/End Value) 1IN umber of Years


48. The Social Accounting Matrix analytically can be traced back to:

Adam Smith's Division of Labour


Francois Quesnay's the Tableau Economique.


Ricardo's Rent Theory


Marx's Social Division of Labour


9


49.
In a Social Accounting Matrix every entry when read in rows context and columns c,ontext respectively represents:

50.
In order to avoid economically meaningless results, the viability conditions developed by which set of scholars must be satisfied by the Input-Output system.


Industry of Origin and Industry of Destination
Demand and Supply
Receipts and Expenditure
Consumption and Production


Hawkins -Simon


Hicks-Simon


Hawkins-Smith


Kaldor-Simon


51. In the evaluation of the value of Capital Stock by the CSO In India, which of the following category is not included

Machinery


Human Capital


Construction


Changes in Stocks


52. Supposing that the prevailing inflation is 20 percent per annum and private rate of interest in nominal terms is 30 percent per annum. Then private real rate of interest per annum is approximately:

10.0 percent


8.3 percent


8.0 percent


6.67 percent


53. LetsetS x is a letter in word "ARTHASHASTRA"}. What is the cardinality of the power set of

32


4096


12


5




54. Let A be a square matrix of order n and let B k.A where k is a real number. Considering that IXI denotes determinant of a square matrix which of the following is true?
IBI IAI
IBI=kIAI

IBj kn IAI


IBI IAI


55. Letf(x) In (l3x). Derivative ofj(x) with respect to x is equal to:
In 13/ x
13 x
13x
x
56. Consider system ofequations: 4x 3y and 2x-y=3. Then,

y=O


x y


x Y=2
x
57. Let X and Z be random variables such that 5.Z -20. Given that mean of X is flx 80 and its standard deviation is O"x 55, then,

flz 80 and o"z 55


flz=20and o"z= 11


flz=80and O"z=11


flz =20 and o"z 55


58. Let A and B be independent events and let PCB) where is probability that event X occurs. Let be probability ofjoint occurrence ofevents A and B. Then,

PCB) PCB)


PCB) PCB)


PCB) PCB)


PCB) PCB)


59.
The quadratic equation, 2x2 -3.x


has distinct real roots
has distinct complex roots
has identical real roots
has identical complex roots

11



£-... 30

60.
If one were to divide the standard deviation of a population of the mean of the sample population and multiply this value by 100, one would have calculated the

Population standard score.
(BJ Population variance.

Population standard deviation.


Population coefficient of Variation.


61. A bag contains 2 red, 3 green, and 2 blue balls. Two balls are drawn at random. What is
the probability that none ofthe balls drawn are blue?

10/21


11/21


2/7


5/7


.62. The average score for a Biology test is 77 and the standard deviation is 8. Which percent best represents the probability that anyone student scored between 61 and 93 on the test?

99.50/0


950/0


680/0


340/0


63. The simple probability of an occurrence of an event is called the

Bayesian Probability.


Joint Probability


Marginal Probability


Conditional Probability


64. In case of open end classes, an appropriate measure of dispersion to be used is

Range


Quartile Deviation


Absolute Deviation


Standard Deviation


12


65. The cumulative percentages of a frequency table have little or no meaning for data.

Nominal


Ordinal


Interval


Ratio


66. Average wages of workers of a factory are Rs. 550.00 per month and the standard deviation ofwages is 110. The coefficient of variation is:

C.Y. 30 per cent


C.Y. 15 per cent


C.Y. 500 per cent


C.Y. 20 per cent


67. Exponential Smoothing is

A method to use number exponents to smooth the time series


One of the forecasting methods


A method oftesting linearity


None ofthe above


68. Consumer Price Index falls in the category of

A simple index


An aggregate index


An inflation index


Both and


69. A pair of dice is thrown. Find the probability of obtaining a sum of 8 or getting an even number on both the dice.
11/36

10/36


9/36


8/36


13



70. Which is not a central government tax
Corporation tax

WEALTH TAX


Agricultural income tax'


none


71. If the elasticity of supply is less than the elasticity of demand ,the burden of tax will fallon

Entirely on the seller


Entirely on the buyer


Both on the seller and buyer


NONE'


72. Laffer curve shows the relationship between

Tax revenue and time


TAX Rate and income


Tax revenue and tax rate


NONE


73. Which isnot a characteristic of PUBLIC GOOD

Non-exclusion


NON-RIVAL


Divisibility


NONE


74. The basic difference between a sales tax and a VAT

INCIDENCE oftax


METHOD Of collection


Tax base


NONE


75. Countries trade with each other because they are and because of

different, costs


Similar, scale economies


different, scale economies


Similar, costs


14




76. Given the following information: Unit Labor Requirements
Cloth Wine
Home 10 20
Foreign 60 30

Neither country has a comparative advantage.


Home has a comparative advantage in cloth.


Foreign has a comparative advantage in cloth.


Home has a comparative advantage in widgets.


77. In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in

tastes.


military capabilities.


sIze.
relative availabilities of factors of production.
78. Starting from an autarky (no-trade) situation with Heckscher-Ohlin model, if Country H is relatively labor abundant, then once trade begins

wages and rents should rise in H


wages and rents should fall in H


wages should rise and rents should fall in H.


wages should fall and rents should rise in H.


79. Terms of trade refers to

what goods are importeD.


what goods are exporteD.


the volume of trade.


the prices at which trade occurs.


80. The most common form of price discrimination in international trade is

non-tariff barriers.


Voluntary Export Restraints.


dumping.


preferential trade arrangements.


"

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81. The WTO was established by the ofmultilateral trade negotiations.

Kennedy Round


Tokyo Round


Uruguay Round


Dillon Round


82. The infant industry argument was an important theoretical basis for

Neo-colonialist theory of international exploitation.


Import -substituting industrialization.


Historiography of the industrial revolution in Western Europe.


East-Asian miracle.


83. A country's current account

balance equals the change in its net foreign wealth.


balance equals the change in its foreign wealth.


surplus equals the change in its foreign wealth.


deficit equals the change in its foreign wealth.


84. For open economies,
I.

S I +CA.


S I -CA.


CA.
85. How many British pounds would it cost to buy a of American designer jeans costing $45 if the exchange rate is 1.50 dollars per British pound?

10 British pounds


20 British pounds


30 British pounds


35 British pounds


86. The J-curve illustrates which of the following?

The effects of depreciation on the home country's economy


The immediate increase in the current account caused by a currency depreciation


The gradual adjustment of home prices to a currency depreciation


The short-term effects of depreciation on the current account


16

87. The quantity theory of money implies that if the money stock were to double, the price level would

fall by one half.


rise, but only slightly.


also double.


be unchanged
88. If the consumption function is given by C 100 and planned investment is 150, government spending is 50, and T is 100, then equilibrium income is
600
750
400
350
89. Compared to the closed economy Keynesian model, the open economy model in which imports are a function of income has an investment multiplier that is

smaller.


larger.


equal.


equal to I.


90. Keynes believed that the instability in income was caused by variability in

investment


taxes.


consumption and savings.


D government spending.
9 I. A rise in the money stock will

shift the LM schedule to the right.


shift the LM schedule to the left.
. not have any effect on the LM schedule.



shift the IS schedule downward and to the right


92. The rate of unemployment can be calculated by

simply dividing all unemployed persons by all employed persons.


subtracting those employed from the total labor force to find the number of unemployed and express this number as a percent of the total labor force.


subtract those unemployed from the total labor force and express this number as a percent of the total labor force.


dividing all unemployed by the population.


17


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93. Capital inflows in the balance of payments accounts include

purchases of financial assets by domestic residents.


direct investments in foreign countries.


indirect investments in foreign countries.


purchases of domestic government bonds by foreigners.


94. A system of exchange rate determinati'on with no central bank intervention is a

fixed exchange rate system.


flexible exchange rate system.


floating exchange rate system.


either a flexible or a floating exchange rate system.


95. The primary tool utilized by the Reserve Bank of India today in conducting monetary policy
IS

the discount rate.


reserve requirements.


open market operations.


selective credit controls.


96. Robert Solow is one of the developers of

classical economics.


the neoclassical growth model.


real business cycle theory.


new classical economics.


97. The difference between the nominal interest rate and the real interest rate is
Inflation
taxes
Seignorage
Hyperinflation

98. The inflation caused by supply shocks is called

Expected inflation


Wage inflation


demand pull inflation


cost-push inflation


99. Theories of money demand that emphasize the role of money as a medium of exchange are called

Transaction theories


portfolio theories


quantity theories


q theories


100. M3 measure of money compiled by Reserve Bank of India includes

Currency, demand deposits and Time deposits


Currency and. Demand deposits


Demand deposits and Time deposits


Currency, Demand deposits and Post office deposits


19