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QUESTION PAPER

SERIES CODE

A

Registration No. :

Centre of Era,. :

Name of Candidate :

Signature of Invigilator

ENTRANCE EXAMINATION, 2013

M.A. ECONOMICS

[ Field of Study Code : ECOM (216) ]

Time Allowed : 3hoursMaximumMarks : 100

INSTRUCTIONS FOR CANDIDATES

Candidatesmust read carefully the following instructionsbefore attempting the Question Paper:

(i) Write yourName and Registration Numberin the space provided forthe purpose on the top of this

Question Paperand in the AnswerSheet.

(ii) Please darken the appropriate Circle of Question Paper Series Code on the Answer Sheet.

(iii) All questionsare compulsory.

(iv) Answerall the 100 questionsin the AnswerSheet provided forthe purpose by darkening the correct choice,

i.e., (a) or (b) or(c) or(d) withaBALLPOINT PEN only against the corresponding circle. Any overwriting

oralteratiop will be treated aswrong answer.

(v) Eachcorrect answercarries1 mark. There will be negative marking and 1/4 mark will be deducted for

each wrong answer.

(vi) Answerwritten by the candidatesinside the Question Paperwill not be evaluated.

(vii) Pagesat the end have been provided forRoughWork.

(viii) Return the Question Paperand AnswerSheet tothe Invigilatorat the end of the Entrance Examination.

DO NOT FOLD THE ANSWER SHEET.

INSTRUCTIONS FOR MARKING ANSWERS

1. Use only Blue/Black Ballpoint Pen (do not use pencil) to darken the appropriate Circle.

2. Please darken the whole Circle.

3. Darken ONLY ONE CIRCLE foreachquestion asshown in example below

Wrong

. m o . .

Wrong Wrong

^ m m m vm oo

Wrong

Co rrect

4. Once marked, nochange in the answerisallowed.

5. Please donot make any stray markson the AnswerSheet.

6. Doroughwork only on the pagesprovided forthispurpose.

7. Mark youransweronly in the appropriate space against the numbercorresponding tothe question.

8. Ensure that you have darkened the appropriate Circle of Question Paper Series Code on the

Answer Sheet.

/30-A

/aaA 2

,I'll-1111

r y lr y q u 1q 1 10

91111HI I I

V11111. 11'11WI 1

1. The function f (x) = log10 xiscontinuousoverthe interval

(a) (-a, a) where a> 0

( b )

( - -, +o )

(c) [-a, a] where a> 0

(d) (Q 1)

2. Satish is very consciousabout the food he eats. He only eatsrotisand dal; acup of dal

costsP 2, while eachroti costsarupee; and Satishdecidestospend only a13perday

on food. He alsodecidestoconsume exactly 5500 caloriesaday; he hasbeen told that

eachroti has1000 calorieswhile eachcup of dal has500 calories. He spends the entire

money he hasallocated tofood. Then he consumes

(a) 3rotisand 5 cupsof dal

(b) nomore than 2 rotisperday

(c) nomore than 4 cupsof dal perday

(d) 3rotisand 4 cupsof dal perday

3. Let X and Y be random variableswithV[X1 = 2, V[Y] = 4 and cov(X, Y) = 2. Let

W = 2X + 3Y. The V[W1 is

(a) 68

(b) 44

(c) 48

(d) 16

4. Given the following dataforan economy :

Grossdomestic product at market prices20,000

Grossdomestic capital formation 5,000

Depreciation 4,000

Net exports(-) 2,000

Net factorincomesfrom abroad 5,000

The economy'snet domestic capital formation is

(a) 1,000

( b ) 5,000

( c) 3,000

( d) ( -) 1,000

/3o-A 3 [ P.T.O.

S. The incidence of sales tax falls

(a) on only consumers if demand is completely elastic

(b) on only retailers if demand is completely elastic

(c) on only retailers if demand is completely inelastic

(d) always on both consumers and retailers

6. When an economist refers to the long run, she is referring to

(a) a length of time no shorter than 2 years

(b) a length of time no shorter than 1 month

(c) approximately the length of time such that all inputs remain fi*ed

(d) approximately the length of time such that all inputs are variable

7. Which of the following is indicative of an inverse relationship between X and Y?

(a) A scatter plot whose points are shaped like a circle

(b) A scatter plot with points mostly in the lower left and upper right quadrants

(c) A negative correlation coefficient

(d) A negative P-value for the correlation coefficient

8. Which of the following is not correct regarding the estimated slope of the regression

line?

(a) It is divided by its standard error to obtain its t-statistic

(b) It shows the change in Y for a unit change in X

(c) It is chosen so as to minimize the sum of squared errors

(d) It may effectively be regarded as zero if its P-value is below 0.01

9. Among twenty-five articles, nine are defective, six have only minor defects and three

have major defects. The probability that, if a selected article is defective, then the defect

is major is

(a) 1/3

(b) 0.25

(c) 0.24

(d) 0.08

/30-A 4

AnswerQuestion Nos. 10-15 on the basisof the following information :

An exclusive club istrying very hard topick itsmembersfrom the social elite. An exact election

mechanism hasbeen agreed upon that will ensure the entrance of only the most suave

membersfrom the group A, B, C, D, E; F, G and H. Being 'in' or`out' of the club isdetermined by

the following rules:

If A isin, then Gisout.

If H isout, then B isin.

If D isout, then E isout.

If H isin, then C isin.

If B isout, then Gand D are out.

10. Whichof the following is a complete group of people who could be in?

(a) A, F, G

(b) F, G, H, C, E, D

(c) E,D,H,C,B

(d) B,F,G,D,A

11. If Bis out, then whomust be in?

(a) A

(b) C

(c) D

(d) E

12. If E and Gare in the club, then what othertwopeople must also be in the club?

(a) B, A

(b) G, H

(c) H, D

(d) D, B

13. If B and D are out of the club, then whichof the following must be true?

(a) At least twopeople are in the club

(b) At least three people are in the club

(c) At m ost four people are out of the club

(d) Exactly three people are out of the club

/30-A 5 [ P.T.O.

1 4 . If seven people are in the club , then who could b e out?

(a) A

(b) B

(c) E

(d) C

15. Whocould be the only person in the club?

(a) A

(b) B

(c) C

(d) F

AnswerQuestion Nos. 16-21 on the basisof the following information :

A numberof speciesfaced extinction during the Mesozoic era. SpeciesR, S, T, U, V, W and X

were speciesthat all became extinct during thiseraand scientistshave determined that their

extinction occurred based on the following constraints

W became extinct before X.

U became extinct afterT.

S became extinct before T.

X became extinct before U.

V became extinct afterU.

S becam e extinct before W.

R becam e extinct before S

16. Which of the follwoing species were the last two to go extinct?

(a) X, V

(b) T, U

(c) X, U

(d) U, V

17. Which of the following species could have been the fourth one to go extinct?

(a) S

(b) V

(c) W

(d) R

/30-A 6

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18. Which is the smallest number of species that could have gone extinct before T?

(a) Two

(b) Three

(c) Four

(d) Five

19. Whichof the following must be true if Xwent extinct afterT?

(a) Three specieswent extinct before T

(b) Three specieswent extinct afterT

(c) Fourspecieswent extinct before T

(d) At least three specieswent extinct afterT

20. How many possible ordersare there forthe species' extinction pattern?

(a) One

(b) Two

(c) Three

(d) Four

21.

If the constraints were changed and Xwere not required to become extinct before U,

then whichof the following is a possible order for the species' extinction?

(a) W, R, S, T, U, X, V

(b) R, S, X, W, T, U, V

(c) R, X, S, W, T, U, V

(d) R, S, T, U, V, W, X

22. Between 1750 and 1900, India's share in world manufacturing output

(a) increased from 2 percent to15 percent

(b) increased from 7 percent to 25 percent

(c) fell from 25 percent to 2 percent

(d) stayed at around 15 percent

/30-A 7

1 P.T.O.

23. Between 1990-91 and 2000-01, the Tax/GDP ratioof the Central Government of India

(a) increased from around 8percent toaround 15 percent

(b) increased from around 9 percent toaround 11 percent

(c) decreased from around 11 percent toaround 9 percent

(d) decreased from around 15 percent toaround 8percent

24. Whichof the following isused todetermine the value added in agriculture in India?

(a) Input-output approach

(b) Weather predictions

(c) Crop cutting experiments

(d) Cost surveysof the Ministry of Agriculture

25. Take India'sGDP in 2009-10 at! 50,00,000 crore. Indiansworking abroad remit tothe

country ! 150 crore and foreignersworking in Indiaremit ! 100 crore out of the

country. Foreign investorsrepatriate F50 crore and Indian businessabroad bringsin

! 10 crore. Then India'sGNP in 2009-10 would have been

(a) ! 50,00,050 crore

(b) ! 49,99,950 crore

(c) ! 50,00,090 crore

(d) 49,99,910 crore

26. National accountsof acountry show the following

Net factorincome from abroad 10

Income from private domestic industries780

Income from governmental industries100

Personal consumption expenditures500

Government purchases250

Exports40

Imports60

Depreciation 30

Then the net domestic product is

(a) 890

(b) 880

(c) 910

(d) 660

/30-A 8

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27. The real rate of interest is normally calculated by

(a) dividing the nominal interest rate by the price level

(b) subtracting the rate of inflation from the nominal interest rate

(c) dividing the rate of interest by the rate of inflation

(d) None of the above as it is set by the central bank

AnswerQuestion Nos. 28-30 on the basisof the following information :

Consideran economy in whichthe consumption function isgiven by C = 400+ 0.6(Y -T).

Investment (I) is120, government purchases(G) and taxes(T) are both100.

28. The equilibrium level of income is

(a) 1000

(b) 1200

(c) 1300

(d) 1400

29. If government purchases increase to240, the new equilibrium level of income would be

(a) 1700

(b) 1200

(c) 1400

(d) 1600

30. The government expenditure multiplier is

(a) 2.5

(b) 3.5

(c) 4.5

(d) 1

31. Market capitalization in the Bombay Stock Exchange (BSE) rose by 100 percent in a

single year. Thismeansthat

(a) the Sensex rose by 100 percent during that year

(b) the value of sharestraded at the BSE overthe yearincreased by 100 percent when

compared withthe previousyear

(c) the value of all outstanding sharesof companieslisted at the BSE rose by

100 percent

(d) the pricesof every share listed at the BSE rose by 100 percent

/30-A

32. If an individual depositsasum of money in abank, then the amount of additional credit

that the banking system can create is

(a) afraction of that sum defined by the cashreserve ratio

(b) afraction of that sum defined by the statutory liquidity ratio

(c) amultiple of that sum defined by the cashreserve ratio

(d) amultiple of that sum defined by the statutory liquidity ratio

33. Fuel and powerhave aweight of 15 percent in India'sofficial wholesale price index. If

there isa20 percent increase in the price indexforthe fuel and powersubgroup, then

contribution thiswould make toinflation measured by the WPI would be

(a) exactly 3 percentage points

(b) less than 3 percentage points

(c) m ore than 3 percentage points

(d) m ore than 10 percentage points

34. The Bombay Stock Exchange Sensitive IndexorSensexis

(a) a simple average of the stock pricesof the top 500 companiesby market

capitalization

(b) aweighted average of the stock pricesof the 500 most actively traded shares

(c) aweighted average of the stock pricesof the 50 most actively traded shares

(d) aweighted average of the stock pricesof achanging set of 30 actively traded

stocks

35. Whichof the following indicatorsisnot included in computing the human development

indicescalculated by the UNDP?

(a) Life expectancy at birth

(b) Adult literacy rate

(c) Combined primary, secondary and tertiary enrolment

(d) Headcount poverty ratio

36. An increase in the international reservesof an economy indicatesthat

(a) exante savingsare higherthan exante investment

(b) exante savingsare lowerthan exante investment

(c) exante savingsare equal toexante investment

(d) Nothing can be said about exante savingsorexante investment

/30-A 10

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37. Stagflation describesasituation of

(a) rising pricesand rising output

(b) rising pricesand falling orstagnant output

(c) falling orstagnant pricesand rising output

(d) falling orstagnant pricesand falling orstagnant output

38. Forthe countriesin the European Union that share acommon currency, the euro,

whichof the following iscorrect?

(a) It isimpossible tohave different real exchange ratesfrom one another

(b) It ispossible tohave real exchange ratesthat are different from one another

(c) The nominal and real exchange rateswill alwaysvary according tocapital flows

(d) The concept of real exchange rate isnot relevant

39. In recent years, the bottom 20 percent of the world'spopulation are estimated toreceive

global income

(a) less than 1 percent

(b) around 3 percent

(c) around 5 percent

(d) around 10 percent

40. If an economy is a price taker in world marketsforbothexport and import, the real

exchange rate devaluation

(a) will have noeffect on the balance of trade

(b) will cause the balance of trade toimprove

(c) will cause the balance of trade todeteriorate

(d) will turn atrade deficit intoabalance

41. The 'Gold Standard' referstoan international currency regime underwhich

(a) only gold wasused in international transactions

(b) only gold wasused asmoney in domestic transactions

(c) countriesofficially linked theirmoney supply toaspecific value of gold

(d) countriesofficially linked the value of theirmoney toaspecific weight of gold

/30-A 11 1 P.T.O.

42. Currently, State Governmentsreceive approximately whichof the following sharesof

the Central Government'sgrosstaxcollection?

(a) 22 percent

(b) 25 percent

(c) 32 percent

(d) 40 percent

43. Considerthe following statementsabout atwo-person simultaneous-move game in

whicheachperson hastwopure strategies:

(i) If the game hasaunique Nashequilibrium whichisPareto-dominatedby some other

strategy profile, then it isaprisoner'sdilemmagame.

(ii) If the game is a prisoner's dilemmagame, then it hasaunique Nashequilibrium

whichisPareto-dominated by some other strategy profile.

Whichof the following is true?

(a) (i) is true but (ii) is false

(b) (i) is false but (ii) is true

(c) Both(i) and (ii) are true

(d) Both(i) and (ii) are false

44. The intersection of three distinct planes in the three-dim ensional space is

(a) a point

(b) astraight line

(c) apoint orastraight line

(d) neither a point nor a straight line

45. The sampling distribution refersto

(a) the distribution of varioussample sizeswhichmight be used in agiven study

(b) the distribution of different possible valuesof astatistic togetherwiththeir

respective probabilitiesof occurrence

(c) the distribution of the valuesof the itemsin the population

(d) the distribution of the valuesof the itemsactually selected in agiven sample

/30-A 12

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I

Answer Question Nos. 46-48 on the basis of the following information :

A student has taken 5 courses-Philosophy, Biology, Economics, Mathematics and Literature.

She studies for these courses according to the following pattern

Every week the student studies for exactly three courses.

If she studies Biology in a week, then she also studies Philosophy that week.

If she studies Economics in a particular week, then she does not study it in the

following week.

In any particular week she studies not more than one of the subjects studied in

the preceding week.

46. Which of the following is a possible sequence of combinations for the student in the two

successive weeks?

(a) Week-1

Week-2

Philosophy, Biology and Economics

Biology, Mathematics and Literature

(b) Week-1 : Philosophy, Biology and Mathematics

Week-2 Philosophy, Biology and Literature

(c) Week-1

Week-2

Philosophy, Mathematics and Literature

Philosophy, Biology and Economics

(d) Week-1

Week-2

Biology, Mathematics and Literature

Philosophy, Economics and Mathematics

47. If the student studies Philosophy, Biology and Economics in the first week, which of the

following combinations must be studied in the third week?

(a) Philosophy, Biology and Economics

(b) Philosophy, Biology and Mathematics

(c) Philosophy, Economics and Mathematics

(d) Economics, Mathematics and Literature

48. If the student studies Philosophy, Literature and Mathematics in the first week, which

of the following combinations must be studied in the eleventh

(a) Philosophy, Literature and Mathematics

(b) Philosophy, Biology and Mathematics

(c) Philosophy, Economics and Mathematics

(d) Economics, Mathematics and Literature

week?

/ 30-A 1 3[P:T.O.

49. The rate of interest is

(a) aflow variable

(b) astock variable

(c) the ratioof aflow variable toastock variable

(d) the ratioof astock variable toaflow variable

50. The fiscal deficit is

(a) aflow variable

(b) astock variable

(c) the ratioof aflow variable toastock variable

(d) the ratioof astock variable toaflow variable

51. Suppose interest iscompounded half-yearly at the rate of 10%perannum. If the

present value of an asset, whichreturnsafixed sum of FX afterone yearand nothing

thereafter, isF50,000, then X isequal to

( a) r 54,750

( b ) ! 55,000

( c) r 55,125

( d) 55,250

52. Whichof the following statements must be incorrect to describe aset of propertiesfor

the probability distribution of a random variable X?

(a) E(X) = 0

(b) Standard Deviation (X) = -1

(c) Variance (X) = 1

(d) The distribution of X isnot symmetric about E(X)

53. Suppose twotrialsof arandom experiment, in whichafaircoin istossed and afairdie

isrolled simultaneously, are carried out underthe same conditions. What isthe

probability that the outcome `the coin showsahead and the die showsanumber

divisible by 3' isobserved in at least one trial?

( a) 9/144

( b ) 44/144

( c) 60/ 144

( d) 80/144

/30-A 14

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AnswerQuestion Nos. 54-57 on the basis of the following information :

Suppose, in equilibrium, aggregate income (in units of money per year) in an economy Y = C+ I,

where investment expenditure (in units of money per year) I = 1000 and aggregate consumption

expenditure (in units of money per year) C satisfies the following conditions :

(i) C isafunction of current disposable income in the economy (Yd).

(ii) If Yd = 0, then C = 500.

(iii) Marginal propensity to save out of Yd is constant in the economy and equal

to30%.

Suppose the government collectsdirect tax revenues equal to 15%of Y and makes direct

transferpaymentsequal to750 units of money per year.

54. What is the value of the investment multiplier in the economy?

(a) Between 1.7 and 1.9

(b) Between 1.9 and 2.1

(c) Between 2.1 and 2.3

(d) Between 2.3 and 2.5

55. What is the equilibrium value of Y in the economy?

(a) Between 3250 and 3750

(b) Between 3750 and 4250

(c) Between 4250 and 4750

(d) Between 4750 and 5250

56. If insteadof 750 unitsof money the government makes annual transfer payments equal

to10%of Y, then the value of the investment multiplier will

(a) decrease by lessthan unity

(b) decrease by more than unity

(c) increase by lessthan unity

(d) increase by more than unity

57. Ifinstead of 750 unitsof money the government makes annual transfer payments equal

to10%of Y, then the equilibrium value of Y will

(a) decrease by lessthan 1000

(b) decrease by more than 1000

(c) increase by lessthan 1000

(d) increase by more than 1000

/30-A 15 f P.T.O.

58. Considertwoeconomies(1 and 2) where in equilibrium, the level of aggregate

income (Y) isthe sum of aggregate investment expenditure (I) and aggregate

consumption expenditure (C). I isdetermined autonomously of Y and itsvalue in

economy 1 isdouble that in economy 2. If the marginal propensity tosave in economy 1

ishalf that in economy 2 forall valuesof Y, then the equilibrium value of Y - C in

economy 1 is

(a) double that in economy 2

(b) half that in economy 2

(c) the same asthat in economy 2

(d) None of the above

59. An indirect utility function

(a) isdefined overincome and prices

(b) assumesprofit maximization

(c) ishomogenousof degree one

(d) satisfiesall of the above

60. The GDP of acountry isgrowing at 5%, itspopulation growthis2%and itsincome

elasticity forfood is0.5. We can expect food demand togrow at

(a) 2.0 percent

(b) 2.5 percent

(c) 3.5 percent

(d) 5-0 percent

61. If A issufficient forB tooccurand C isnecessary forB tooccur

(a) from occurrence of B we can conclude that A hasoccurred

(b) from occurrence of B we can conclude that C hasoccurred

(c) from occurrence of C we can conclude that A hasoccurred

(d) from occurrence of C we can conclude that B hasoccurred

62. Whichof the following institutionsin Indiaisnot aconstitutional body?

(a) The National Finance Commission

(b) State Finance Commissions

(c) The National Planning Commission

(d) District Planning Committees

/30-A 16

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63. Whichof the following conditionsisnot necessary forordinary least squares tobe the

best unbiased linearestimator(BLUE)?

(a) All errorsare normally distributed

(b) All errors are independent and uncorrelated to each other

(c) All errors have expectation zero

(d) All errorshave the same variance

AnswerQuestion Nos. 64-66 on the basisof the following information :

"While capital isthe most important condition orprerequisite of highefficiency production, one

cannot explain differencesin the wealthof nationsin termsof differencesin 'capital endowment'

of different countries, in the same mannerasone can explain differencesin population density

by reference todiffering endowmentsof natural resources, suchasclimate, rainfall, geology,

etc. Forin contrast tonatural resourceswhichexist independently of human activities, 'capital

endowment' isnecessarily the result of suchactivities. It isimpossible therefore toseparate

cause and effect; it isjust assensible-indeed more enlightening-tosay that capital

accumulation hasresulted from industrial development than that it wasthe cause of such

development. Fortaking manufacturing activitiesasawhole, the growthof output and the

accumulation of capital are merely different aspectsof asingle process."

(NicholasKaldor, Capitalism and Industrial Development, 1972)

64. According toKaldor, differing endowmentsof natural resources

(a) explain differencesin capital accumulation

(b) result from industrial development

(c) can help toexplain differencesin population density

(d) can be the result of human activities

65. 'Capital endowment' cannot explain the differencesin the wealthof nations, because

(a) these are more determined by natural resource endowment

(b) capital isthe most important condition orprerequisite of highefficiency

production

(c) capital cannot be the cause of industrial development

(d) industrial development may change 'capital endowment'

66. Kaldorarguesthat climate, rainfall, geology, etc.

(a) have astrong relationship withpatternsof industrial development

(b) are determinantsof economic growth

(c) exist independently of human activities

(d) can explain the differencesin the wealthof nations

/30-A 17 [P.T.O.

AnswerQuestion Nos. 67 and 68on the basisof the following information :

According tothe Constitution of India, "Where any law makesany provision forthe acquisition

by the State of any estate orwhere any land comprised therein isheld by aperson underhis

personal cultivation, it shall not be lawful forthe State toacquire any portion of suchland asis

within the ceiling limit applicable tohim underany law forthe time being in force orany

building orstructure standing thereof, unlessthe law relating tothe acquisition of suchland,

building orstructure, providesforpayment of compensation at arate whichshall not be less

than the market value thereof." [Article 31A(e)]

67. On thisbasis, whichof the following statementsiscorrect?

(a) The State must pay full market value forall land acquired from acultivator

(b) Only land without buildingsand structurescan be acquired by the State

(c) Only aperson cultivating the land personally iseligible forcompensation

(d) Land above designated ceiling limitscan be acquired by the State without

compensating foritsmarket value

68. On thisbasis, whichof the following statementsisnot correct?

(a) Lawsrelating toland acquisition by the State must provide forsome compensation

(b) Landlordswithtenant cultivatorson the acquired land must share some of the

compensation withtheirtenants

(c) Acquisition lawsapply toland and tobuilt structureson land

(d) Even without alaw relating toland acquisition, Statescan acquire land

69. In 1990-91, the price indexof agricultural commoditieswas200 and that of

manufactured products150. In ayear'stime boththe indicesincreased by 15 (i.e., the

price indexof agricultural commoditiesbecame 215 and that of manufactured

products165). Consequently, the termsof trade between agriculture and industry

(a) moved in favourof agriculture

(b) moved in favourof industry

(c) remained unchanged

(d) None of the above

/30-A 18

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70. Populations of twospeciesA and B at time 0 are equal. If the instantaneous rates

of growthof populationsof speciesA and Bare u and u+ 1 respectively, u> 0, then

at time 1 the population of speciesB would be

(a) twice the population of speciesA

(b) log 10 timesof the population of speciesA

(c) e" timesthe population of speciesA

(d) e tim es the population of species A

71. Suppose the demand forgood Z goesup when the price of good Y goesdown. We can

say that goodsZ and Y are

(a) complements

(b) perfect substitutes

(c) unrelated goods

(d) substitutes

72. If the quantity demanded of rice increasesby 5%when the price of wheat increasesby

20%, the cross-price elasticity of demand is

73. Whichof the following doesmonopolistic competition have in common withperfect

competition?

(a) A large numberof firmsand freedom of entry and exit

(b) A standardized product

(c) Product differentiation

(d) The ability toearn an economic profit in the long run

/30-A 19 [ P.T.O.

74. Whichof the following doesmonopolistic competition have in common withmonopoly?

(a) A large numberof firms

(b) A downward-sloping demand curve

(c) The ability tocollude withrespect toprice

(d) None of the above

75. The market demand function foracommodity is given as D(p) = 1 / p; where p isthe

price of the commodity. Whichof the following statements about the market demand

curve iscorrect?

(a) The price elasticity of demand for this commodity is different at different points on

the demand curve and it varies from 0 to 1

(b) The price elasticity of demand for this commodity is different at different points

on the demand curve and it varies from 0 to -

(c) The price elasticity of demand for this commodity is equal to 1 at any point on

the demand curve

(d) None of the above

76. Let a be strictly negative real number and let b be a strictly positive real number.

Whichof the following is true? [ Note that Ix) stands for the absolute value of x ]

(a) jal < b if and only if -b < a< b

(b) jal< b if and only if -b > a> b

(c) laic b if and only if -b > a

(d) None of the above

77. Let I x I stands for the absolute value of x. Then the function f (x) = ) xI is

(a) differentiable everywhere including the point '0'

(b) differentiable everywhere excluding the point '0'

(c) differentiable everywhere excluding the points '0', '1' and '-1'

(d) None of the above

/30-A 20

II Ii, i ll irvllq,y a II

I'll. [11M.Ir I I$IMwq TORII II Ii ^,I.^u . i i iii.. I mnli

111, m i I

78. If youintegrate 1 / xoverthe interval [ 1, y], where y > 1, youget

(a) log y (whichis the natural logarithm of y)

(b) log (y+l) (whichisthe natural logarithm of y+1)

(c) es

(d) None of the above

79. For events A and B

(i) the probability of event A is p

(ii) the probability of event Bis q

(iii) the probability of event AS is r

Which of the following is true?

(a) Probability { either A or Bor both) = p + q

(b) Probability (either A or Bbut not both) = p+q-r

(c) Probability (either A or Bbut not both) =

p + q - 2r

(d) None of the above

80. Which of the following sets isempty?

(a) { x is a real number [ x = x)

(b) { x is a real numberx a x}

(c) (x is areal numberlx=x2)

(d) {x is areal numberJ xm x2 )

81. Let set A contains m elements and set Bcontains n elements. Then the number of

distinct functions from set A to set Bwhich can be constructed is

/30-A 21 QP;TA.

82. In an election, half the electorsvoted forcandidate A and two-thirdsvoted for

candidate B. 10 electorsvoted forbothA and B. 6 electorsvoted forneitherA norB.

How many electorswere there?

(a) 18

(b) 24

(c) 36

(d) None of the above

83. A theorem statesthat if P then Q'. From empirical observationsit isknown that Pis

false. Therefore it can be inferred that

(a) Q is false

(b) Q is true

(c) the theorem If P then Q' is false

(d) None of the above

84. Following are given

(i) All P are Q.

(ii) NoQ isR.

From (i) and (ii) we can inferthat

(a) some P are R

(b) noP isR

(c) all P are R

(d) None of the above

85. Following are given :

(i) Some P are Q.

(ii) NoRisQ.

From (i) and (ii) we can inferthat

(a) some P are R

(b) noP isR

(c) all P are R

(d) None of the above

/30-A 22

11. 11111a x. 1Ole ^ , pupa ,I IN XMNgllogll1y 1,1.10

1i . n. , f. I i nnlI1iI I ,I I I . .

86. A country that hasatrade deficit experiences a nominal exchange rate depreciation: As

aresult

(a) the trade deficit will necessarily decline

(b) the trade deficit will necessarily increase

(c) the exchange rate depreciation will cause domestic inflation; sothere will be no

impact on the trade deficit

(d) Nothing can be said about the trade deficit without more information

87. Economic activitiescover

(a) only activitiesthat result in productsthat are exchanged in markets

(b) only activitiesthat people engage in forprofit

(c) only activitiesthat are orcan potentially be delegated tosomeone else

(d) only activitiesthat are entered intothe national accounts

88. In the WTO'sAgreement on Agriculture, Blue Box' subsidiesreferto

(a) measures tosubsidise agricultural exports

(b) measurestoprovide income support tofarmers

(c) measures to incentivise farmers

friendly

tomake theircultivation more environment-

(d) measurestoprotect certain crops

89. A monopoly producing achip at amarginal cost off '6 perunit facesademand elasticity

of -2.5. Whichprice should it charge tooptimize itsprofit57

(a) f 6 perunit

(b) r8perunit

(c) r10 perunit

(d) r12 perunit

/30-A 23 1$.T.O.

90. X1, ..., X. are independent and identically distributed random variables. Assume that

Xi isnormally distributed withmean 1 and variance 1. Let al, ..., aN be real numbers.

Construct the random variable Z asfollows:

N

z = jai x X12

i=1

Whichof the following is true?

N

(a) The expected value of Z isTai

i=1

N

(b) The expected value of Z isYai2

i=1

N

(c) The expected value of Z is2 xEai

i=1

(d) None of the above

91. The value-added tax is

(a) a direct tax

(b) an indirect tax

(c) apartly direct and partly indirect tax

(d) anew type of tax, neitherdirect norindirect

92. The current investment rate in India is

(a) about 20 percent

(b) about 30 percent

(c) about 40 percent

(d) about 50 percent

/30-A 24

11111104I 1111011. 11111. plI . I I lu ROITP4111I$

I i 1. i 111I I!I II I "' II I I 1111I I It

93. A village has400 hectaresof land of which200 hectaresissown only once in ayear,

75 hectaresissown withtwocropsayear, 50 hectaresis-sown withthree cropsayear

and 75 hectaresisleft fallow. What isthe grosscropped areaof the village?

(a) 200 hectares

(b) 300 hectares

(c) 400 hectares

(d) 500 hectares

94. The Right toEducation Act, 2009 coversall children

(a) up to11 yearsof age

(b) up to 14 years of age

(c) in the age-group of 6 to 14 years of age

(d) in the age-group of 6 to 16 years of age

AnswerQuestion Nos. 95-100 on the basisof the following information :

There are twoexperts, Xl and X2, employed by the Planning Commission of Hubble Bubble

tocalculate the annual rate of growthof output in the country. Given that Y(t) denotesoutput

in yeart and Y(t - 1) denotesoutput in the previousyear(t -1), Xt calculatesthe rate of growth

in yeart using the formula[Y(t) - Y(t -1)] / Y(t) and X2 calculatesit using the formula

[Y(t) - Y(t -1)]/ Y(t -1).

95. Suppose Hubble Bubble'soutput in 2012 wasgreaterthan itsoutput in 2011. Which

expert calculated ahigherrate of growthfor2012?

(a) X1

(b) X2

(c) BothXt and X2 calculated the same value forthe rate of growth

(d) Cannot be answered on the basisof the information provided

i

96. Suppose Hubble Bubble'soutput in 2012 waslessthan itsoutput in 2011. Which

expert calculated ahigherrate of growthfor2012?

(a) Xl

(b) X2

(c) Both XI and X2 calculated the same value for the rate of growth

(d) Cannot be answered on the basis of the information provided

/30-A . 25 [ P.T.O.

97.

Suppose X2'scalculationsshow that the rate of growthin 2012 was5%. Whichof the

following numbersisthe closest toXt'scalculated value forthe rate of growthin 2012?

(a) 4.76

(b) 4.79

(c) 5.21

(d) 5.26

98. Suppose Xl'scalculationsshow that the rate of growthin 2012 was5%. Whichof the

following numbersisthe closest toX2'scalculated value forthe rate of growthin 2012?

(a) 4.76

(b) 4.79

(c) 5.21

(d) 526

99. Suppose X2'scalculationsshow that the rate of growthin 2012 was-5%. Whichof the

following numbersisthe closest toXt'scalculated value forthe rate of growthin 2012?

(a) -4.76

(b) -4.79

(c) -521

(d) -526

100. Suppose Xl'scalculationsshow that the rate of growthin 2012 was-5%. Whichof the

following numbersisthe closest toX2'scalculated value forthe rate of growthin 2012?

(a) -4.76

(b) -4.79

(c) -5.21

(d) -526

/30-A 26

Iii I I f 1I I I I I III "11",qII In 1 IIIIlI . 1III! 110 M RII II I I I I =it 1IIII111111T1I 41 III 1I.

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