Entrance Examinations, February 2014 Ph.D. (Economics) Time: 2 Hours Max. Marks: 75
HALL TICKET NUMBER

INSTRUCTIONS
1.
Read these instructions carefldly 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 thereon.

4.
Handover the OMR answer sheet at the end ofthe examination.

5.
Use ofnon-programmable calculators is allowed.

6.
There are 75 questions in this paper. The Question Paper has two parts -PART-A and PART-B: the PART-A contains 25 questions and the PART-B contains 50 questions. Marks obtained in PART-A will determine the merit rank in case ofa tie in the total number of marks obtained.

7.
Each correct answer carries mark.

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

9.
This question paper contains 13 pages excluding this cover page but including pages for rough work.


PART-A
1. If the Hicksiancompensated demand curve for a good coincides with the Marshallian demand curve, then for a change in price, this implies that:
A. The good is an inferior good
B. The income effect is zero
C. The substitution effect is zero
D. The price effect is zero.
2. Iffor anindividualforachange inthe priceofacommodity, the compensatingvariation in income is equal to the equivalent variation in income, then this implies that:
A. His Utility function is linear homogenous
B. His Utility function is linear
C. His Utility function is quasi-linear
D. His Utility function is strictly convex
3. A monopolist produces a commodity X. There are two commodities in the economy, X and
Y. The consumers' utility functions are given by XV. Ifthe Consumers have fixed incomes, then this implies that:
A. The marginal revenue ofthe monopolist will always be equal to unity
B. The average revenues marginal revenues
C. The monopolist will not enter this market
D. The monopolist will make normal profits
4. Suppose that the marginal costs are constant at C °and that the demand function for commodity Y is given by: Y D 10/p if p:s 20 and 0 if 20. The profit maximizing price and quantity is given by:
A.
B.
C.
D.
5. In theNeo-classicalmodel with aconstant rate ofgrowth ofpopulation, ifthere istechnical change then:
A. Only Hicks neutral technical progress would be consistent with steady state growth.
B. Only Harrod-neutral technical progress is consistent with steady state growth.
C. Both Hicks neutral technical progress and Harrod-neutral technical progress is consistent with steady state growth.
D. Only Solow neutral technical progress is consistent with steady state growth.
6. The neo-classical model shows that a flexible capital-output ratio would ensure that:
A. The expected rates of growth would equal the warranted rates of growth
B. The warranted rates ofgrowth equal the natural rate of growth
C. Theexpectedrates ofgrowthwouldequal the naturalratesofgrowth
D. The actual rates of growth will always be equal to the expected rates of growth.
7. The pivot on which employment and wages are determined in labour markets according to Marx is
A. Population growth under capitalism.
B. Growth in the numbers ofnew workers.
C. Changes in the Reserve Army of Labour.
D. Changes in the fertility rates and mortality rates ofthe population.
8. The agrarian movements of 1980s differ from the earlier peasant movements basically because
A. They did not mobilize peasants.
B. They gave up the demand for land re-distribution.
C. They demanded abolition of intermediaries.
D. All ofthe above.
9. Which problem is sought to be detected with the help ofD-W statistic?
A. Auto correlation
B. Heteroscedasticity
C. Multi-collinearity
D. Specification error
10. In a double log regression modellogYt a b 10gXt Ut, the slope coefficient gives
A. the ratio ofthe relative change in Y for an absolute change in X
B. the ratio ofthe percentage change in Y for a given percentage change in X
C. the ratio ofthe absolute change in Y for a given percent change in X
D. by how many units Y changes for a unit change in X
11. One hundred people were asked, "Do you favor stronger laws on gender-based violence?" Ofthe33thatanswered"yes" tothequestion, 14weremale.Ofthe67thatanswered"no" to the question, six were male. The probability that a randomly chosen respondent is a male given that the respondent does not favor stronger gender-based violence laws is
A. 14/33
B. 19/33
C. 1/5
D. 6/67
12. Which one ofthese statistics is unaffected by outliers?
A. Mean
B. Interquartile range
C. Standard deviation
D. Range
13. Logical Positivism believed that all scientific explanations have to have a common logical structure: they have at least one universal law plus a statement ofrelevant initial and boundary conditions, constituting explanans and a statement that explains some events in question, called explanandum. this is known as:
A. Induction.
B. Deduction.
C. Hypothetico-Deduction.
D. Falsification.
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14. A box has square base and total surface area equal to 12 m2• The maximum volume ofsuch abox is:
A.
B. 2"2 m3
C. 4m3
D. 2m3
15. Let x and y be numbers in the interval with x 6. The values ofx and y that will make xy. as large as possible are
A.
B.
C.
D.
16. Pick out the true statement:
A. If a set is closed then this is a sufficient condition for it to be bounded
B. If a set is closed and bounded then it is compact.
C. If a set is bounded then it is compact.
D. Every closed and convex set is compact
17. The distance between and Is:
A.3.61
B.13
C.5
D.6.31
18. Village levelland-use data from secondary data in India is available in:
A. Census of India
B. agricultural census
C. national income statistics
D. Economic abstract.
19. In Dual-Gap pioneered by Hollis Chenery, developing countries typically face
A. Trade-deficit and fiscal deficit.
B. Investment-savings gap and foreign exchange constraint.
C. Natural resource constraint and technology constraint.
D. None ofthe above.
20. The purchase of short-term bills from the general public by the Central bank will:
A. decrease bank reserves
B. increase the rate of interest
C. decrease the supply ofmoney
D. increase the supply ofmoney
21. To prevent the exchange rate (external value)ofthe currency from falling, the government can:
A. Reduce interest rates
B. Sell its own currency
C. Buy its own currency with foreign reserves
D. Increase its own spending

22. Which ofthe following monetary aggregates is used for policy purposes by the R.B.!.?
A. Ml
B. Divisia Monetray Aggregates
C. Currency equivalent aggregates
D. M3
23. Ifthe actual rate ofunemployment is higher than the natural rate ofunemployment because the government has reduced the rate of growth of money supply, then according to the accelerationist theory of inflation:
A. The expectation-augmented Phillips curve shifts downwards
B. The expectation-augmented Phillips curve shifts upwards
C. The long-run Phillips curve shifts to the left
D. Phillips curve shifts to the right
24.Priceofa
givenstockhasapositiveprobabilityofmovingupormovingdown inthenext period. Let a call option on this stock be priced K and let a put option on this stock be priced

P.
Then it must be that:

A.
K>0andP O.

B.
0and P O.

C.
K 0 and P O.


D. K 0 and P O.
25. The dictum that State can take away the property of individuals for public benefit is known as:
A. Public goods theory
B. Social Welfare principle
C. Private Benefit Principle
D. Eminent Domain Principle
PART-B
26. Consider the following model: There is an Incumbent firm I and a Potential entrant E. One unit of the good is demanded if the price of the good is less than or equal to 3. To enter this market the potential entrant, must pay a fee (sunk cost). Ifthe incumbent has Marginal costs of2and the entrant has aMarginal cost of1,then
A. The incumbent can drive the entrant out ofthe market and set the monopoly price of 3
B. The entrant can enter the Market and make a positive profit and drive the incumbent out ofthe market.
C. The incumbent will allow entry and both will share the market
D. The entrant will not enter the Market.
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27. If the marginal utility ofmoney is declining with the amount of money an individual has then this implies that:
A. The individual is a risk taker
B. The individual is a risk avoider
C. The individual is risk neutral
D. His Utility function is Convex with respect to money.
28. Assuming that preferences can be represented by a Homothetic function implies that:
A. They can also be represented by a Homogenous function ofany degree
B. They can also be represented by a trans log utility function
C. They can also be represented by a linearly homogenous Utility function
D. They can also be represented by a non-linear Utility function
29. The production set in Neo-classical theory represents:
A. All possible techniques available to produce a given output from a given set ofinputs
B. Only the set ofefficient techniques available to produce a given output from a given set ofinputs.
C. The minimum cost of producing a given level ofoutput
D. Only the maximum output that can be produced from a set of inputs
30. In theneo-classicalmodel ofgrowth, otherthingsremainingconstant, a highersavingsrate implies:
A. The growth rate ofper capita income at the steady state would higher
B. The level of per capita income would be higher
C. The Capital to output ratio would be lower at the steady state with higher savings.
D. There would be no change in the per capita level of income as population is a constant.
31. Given an aggregate production function which is Cobb-Douglas Y =KU LP and the rate of growth ofpopulation is s the savings rate and v the capital-output ratio, then the steady state equilibrium Capital Labour ratio, is given by:
A. k* slv
B. k*
C. k* liP and 1
D. k* v
32. Which of the components ofthe Marx's Reserve Army of Labour come closest to Arthur
Lewis' Surplus Labour? A.·' Stagnant Reserves
B. Latent Reserves
C. Floating Reserves
D. None ofthe Above
33. In neo-classical analysis, development induced displacement is treated as:
A. An negative externality that has to· be corrected tbm State intervention
B. An unintended consequence .
C. A temporary phenomena that will disappear in the long run
D. Both Band C

34. The Stigler-Peltzman Model ofgovernment action in a Democracy assumes that:
A. Governments act in their self-interestjust as Individuals are assumed to.
B. The sole purpose of governments is to correct for Market failures
C. Governments act in ways that would maximize the growth rate ofa Nation
D. Governments try to bring about economic efficiency through regulations.
35. A magazine printed a survey questionnaire in its monthly issue and asked its readers to fill it out and send it in. Over 1000 readers did so. This type ofsample is called
A. a cluster sample.
B. a self-selected sample.
C. a stratified sample.
D. a simple random sample.
.36. A fast-food restaurant chain with 700 outlets in India describes the geographic location of its restaurants with the accompanying table of percentages. A restaurant is to be chosen at random from the 700 to test market a new style of chicken. Given that the restaurant is located in the eastern India, what is the probability it is located in a city with a population of at least 10,000? (correct to 3 decimal places)
Region
Population North East South East South West North West
ofthe City 10,000
10,000­100,000 15% 12%
>100,000 20% 25%

A. 0.456
B. 0.41
C. 0.854
D. 0.146
37. The covariance between the length and weight of five items is 6 and their standard deviations are 2.45 and 2.61 respectively. Then the correlation coefficient between the length and weight is .
A. very near to zero.
B. 0.9974
C. 0.6575
D. 0.9383
38. A cointegration of two or more time series suggests that an equilibrium relationship between them exists that is of
A. long-run
B. short-run
C. very short-run
D. either or depending on the number of lags
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39. The assumption ofmulticollinearity problem in econometrics means that
A. There should be no correlation among the regressors.
B. There should be no relationship among the regressors.
C. There should be no linear relationship among the regressors
D. There should be no nonlinear relationship among the regressors
40. According to Karl Popper, in scientific inquiry, one should formulate hypotheses which are
A. Falsifiable
B. Verifiable
C. Quantifiable
D. ()bservable
41. According to the Milton Friedman, the ultimate goal of a positive economics is to produce atheory which is capable ofyielding
A. A meaningful prediction
B. A meaningful explanation
C. A meaningful estimation
D. A meaningful validation
42. Lionel Robins in his seminal paper "An Essay on the Nature and Significance ofEconomic Science"in 1935assertedthatchiefofthepostulatesofeconomicssuch as"unlimitedwants" or "scarce means" need no empirical basis, because
A. They are self-evident from every day experience
B. Experimental inferences are not always possible in economics
C. This is considered to be more than mere deductive method
D. All ofthe above.
43. The limit ofthe function y as x
A. Does not exist
B. is zero
C. is infinity
D. is1
44.Which ofthe following statements is TRUE?
A. Continuityofafunction isasufficientcondition forDifferentiabilityofthefunction.
B.Continuityofafunction
isanecessarycondition forDifferentiabilityofthefunction.

C.
If a function is continuous at a point then it must be differentiable at that point.

D.
None ofthe statements are true.


45. Annual survey of Industries in India provides data on:
A. C>nly organized sector
B. C>nly unorganized sector
C. both organized unorganized sectors
D. None ofthe above
46. The coverage ofsample under National Sample Survey data is approximately,
A. one lakh households
B. one crore households
C. 30 crore households
D. 25% oftotal population households


47. Wholesale Price Index data is collected and published by
A. Ministry ofFinance, GOI
B. Reserve Bank of India
C.CSO
D.CMIE

48. The purchase of shares in an Indian company by Japanese investors will appear in India's balance ofpayments as:
A. A credit on the Capital account
. B. A credit on the current account

C. A debit on the Capital account
D. A debit on the current account
49. Acapital outflowonthe Indian BalanceofPayments occurs when
A. Indian firms sell capital goods on overseas markets.
B. Indian firms buy shares in overseas companies.
C. Indianfirmsformajoint venturewithoverseascompanies.
D. Indian firms buy capital goods from overseas, to be used in production within India.
50. Main argument in favour oftariff is that
A. it raises revenue
B. it improves balance of payments
C. it improves employment
D. it protects infant industry
51.India'spresentslowdown
ingrowthrateofGDP,which isassociatedwithGlobaleconomic slowdown has cast doubts on the:

A.
Financial crisis thesis

B.
De-coupling thesis

C.
Coupling thesis

D.
None-ofthe above.


52. Amartya Sen in his work on Poverty and Famines asserted that the large scale deaths that happened during the Great Bengal Famine in 1943 were largely due to:
A. A decline in foodgrain production in the country
B. Lack offreedom under colonial rule
C. Decline ofentitlements to the people
D. Widespread black marketing by traders
53.62% of devolutionoffunds from Centre to the States inIndia are mediated by:
A. Planning Commission
B. Ministry ofFinances, GOI
C. Reserve Bank of India
D. Finance Commission
54. The instability in food grain output in agriculture is due to
A. Relative prices
B. Rainfall
C. Cropping Pattern changes
D. All ofthe above
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55. According to Reserve Bank ofIndia, the poor financial inclusion in the country is reflected by the fact that only percent of people in the county are having a bank account:
A. 35%
B. 55%
C. 75%
D. 95%
Question numbers 56 and 57 are based on the paragraph below:
Considera2-good 2n-person (npersonsoftypeAandnpersonsoftype replica
exchange economy LeteachpersonoftypeAhaveutility, UA(XA, yA) 2XA
3YA and an initial endowment ofeA 16) and let each person oftype B have utility, UB(XB.
YB) 3XB +2YB and an initial endowment ofeB 20). The competitive as well as core
allocations are specified by specifying allocation of good X and good Y to a single

representative person oftype Aand asingle representativepersonoftype B.
56. This economy has,
A. no competitive equilibrium
B. unique competitive equilibrium
C. multiple but finite competitive equilibria
D. infinitely many competitive equilibria.
57. Let S be the set of competitive allocations and T be the set of core allocations.
A. Sand T are distinct for 2-person economy but Ttends to S as n tends to infinity.
B. The set T shrinks as n increases.
C. The set S shrinks as n increases.
D. S T for all values ofn.
58. Imperfect information can lead to the problems of:
A. Moral Hazard
B. Opportunistic Behaviour
C. Adverse Selection
D. All ofthe above
59. Increases in the Herfindahl index generally indicate:
A. An increase in Industrial Concentration
B. An increase in Market Competition
C. A decrease in Market Concentration
D. An increase in Market regulation
60.The concept of"Genuine ,savings" measures
A. The savings after Taxes
B. The Savings adjusted for the inflation rate
C. True rate of savings in an economy taking into account investments in human capital, depletion of natural resources and damage caused by pollution.
D. Savings adjusting for Risk in investmentS 61. The basic difference between ecological economics and environmental economics is that:

A. The former is anthropocentric in its approach whereas the latter is more broad based.
B. Ecological economics does not believe that natural capital can be replaced by man-made substitutes.
C. Environmental Economics does not take into account destruction of habitats and problems ofBio-diversity
D. None ofthe above
62. In the contextofthe Capital Asset pricing Model(CAPM)the relevant measure ofrisk is
A. Unique risk
B.Beta

C. Standard deviation ofreturns
D. Variance ofreturns
63. Common school system implies
A. All children irrespective oftheir caste,class,gender,study in the same school
B. The children of poor classes go to same school.
C. The children ofGovt. employees study in the same school.
D. All ofthe above.
64. The terms oftrade measure:
A. The income of one country compared to another
B. The GOP of one country compared to another
C. The quantity ofexports ofone country compared to another
D. Exports prices compared to imported prices
65. The basic difference between a sales tax and VAT
A. Is the method ofcollection
B. Is that the incidence of Tax, is different
C. Is in the tax base
D. Is not reflected in any ofthe above statements.
66. The original Gadgil fonnula was formulated to look into the:
A. distribution of plan assistance during First and Second Five Year Plans
B. Distribution ofPlan and non-plan expenditures ofthe union government ofhtdia
C. distribution of plan assistance during fourth and fifth Five Year Plans
D. Determinedthe distribution ofgrantsto different states ofthe Indian Union.
67. Which committee was constituted to examine the structure of both direct and indirect tax
in 1991?
A.. Choksi committee

B. Chelliah committee
C. Rekhi committee
D. Narasimham Committee
68. Salary ofthe Vice-Chancellor ofBHU comes under
A. plan, development expenditure.
B. non-plan, development expenditure. .
C. non-plan, non-development expenditure.
D. plan, non-development expenditure.
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69. Clowers' dual decision hypothesis is considered to provide:
A. Macrofoundations ofmicroeconomics
B. Micorfoundations of macroeconomics
C. Psychological foundations ofmicro-and macro-economics
D. Rationalist foundations of micro-and macro-economics
70. Dynamic time inconsistency is a feature seen in,
A. New classical macroeconomics
B. Neo-Keynesian macroeconomics
C. Classical macroeconomics
D. Keynesian macroeconomics
71. 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
A. smaller.
B. larger.
C. equal.
D. equal to 1.
72. Monetarists and Keynesians agree that expectations are
A. backwards-looking.
B. rational.
C. unstable.
D. forwards-looking.
73. The Harris-Todaro model is concerned with analyzing
A. the relationship between unemployment and Inflation
B. Urban poverty
C. Rural indebtedness
D. Rural-urban migration
74. The origin ofthe "Big Push theory" is associated with the name of:
A. A.a.Hirschman
B. Ragner Nurkse
C. Rosenstein Rodan
D. W.W.Rostow
75. Which ofthe following statements is FALSE?
A. Higher of two non-intersecting Lorenz curves can be obtained from the lower Lorenz curve by means ofrank-preserving income transfers from richer to poorer individuals.
B. Ranking Lorenz curves in accordance with first-degree Lorenz dominance means that the higher ofnon-intersecting Lorenz curves is preferred.
C. The criterion of frrst-degree Lorenz dominance is inconsistent with the Pigou-Dalton principle oftransfers.
D. First-degree Lorenz dominance cannot be used to reach any conclusion.
iftwo Lorenz curves intersect.


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