(1) For a linear demand curve, which of the following is true ?
A) Elasticity of demand is unity at all points.
B) Elasticity of demand is constant at all points.
C) Elasticity increases as one slides down the demand curve.
D) Elasticity declines as one slides down the demand curve.
Ans) D
(2) A discriminating monopolist will charge a lower price in the market in which the price elasticity of :
A) Demand is greater
B) Supply is smaller
C) Demand is smaller
D) Supply is greater
Ans) A
(3) What is a public limited company ?
A) Owned by the government
B) Owned by share-holders
C) Owned by financial institutions
D) Owned by MNCs
Ans) B
(4) Between the two situations for a firm profit maximization and sales revenue maximization, the equilibrium for a profit maximiser as compared to sales revenue maximiser, takes place at :
A) Larger output and lower price
B) Lower output and higher price
C) Lower output and lower price
D) Larger output and larger price
Ans) B
(5) Product differentiation is relevant to which set of the following market forms ?
A) Monopoly, Monopolistic Competition and Oligopoly.
B) Perfect Competition, Monopoly and Oligopoly.
C) Monopolistic Competition, Oligopoly and Oligopsony.
D) Perfect Competition, Monopoly and Bilateral Monopoly.
Ans) C
(6) In imperfect factor and product markets, labour exploitation is represented by :
a) When ARP is > Average wage
b) When ARP is > Marginal wage
c) When ARP is < MRP
d) When ARP is < Marginal wage
Select the correct answer from the codes given below :
A) a), d)
B) a), c)
C) a), b)
D) d), c)
Ans) C
(7) Who among the following economists emphasized the role of non-economic factors in explaining growth ?
A) R.M. Solow
B) Roy Harrod
C) N. Kaldor
D) E. Domar
Ans) C
(8) Which one of the following is not an Hirofumi Ujawa condition for a well behaved production function ?
A) Continuously differentiable
B) When x=0, f (x)=0
C) The second derivative of the function is negative
D) The function is concave
Ans) D
(9) Exponents of the Cobb-Douglas production function represent :
A) Output elasticity of factors
B) Share of factor income in total income
C) Both A) and B) of the above
D) Neither A) nor B) of the above
Ans) C
(10) Concept of scale economies applies in :
A) Long-run with constant technical coefficients.
B) Long-run with variable technology.
C) Short-run with constant technology.
D) Short-run with variable technical coefficient.
Ans) A
(11) Consider an economy with a Cobb-Douglas type of production function with two inputs - capital and labour. The share of capital and labour in total output are, respectively 1/4 and 3/4. The rates of growth of capital and labour are, respectively 8% and 4% per annum. Neutral technical progress takes place at the rate of 3% per annum. What will be the rate of growth of output per annum in this economy ?
A) 5%
B) 7%
C) 9%
D) 8%
Ans) D
(12) Which of the following conditions is most likely to benefit a debtor under new classical economic framework ?
A) Anticipated deflation
B) Anticipated inflation
C) Unanticipated deflation
D) Unanticipated inflation
Ans) D
(13) Which theory assumes that increase in stock of money is directly spent on goods ?
A) Quantity theory of money
B) IS-LM theory
C) Keynes
D) None of the above
Ans) A
(14) In Harrod's model of economic growth, if warranted rate is below the natural of growth then it is possible to maintain steady state growth at warranted rate with :
A) Continually increasing unemployment
B) A constant rate of unemployment
C) Continually decreasing unemployment
D) None of the above
Ans) A
(15) Wage is determined where :
a) Demand for labour = supply of labour
b) MRP of labour = marginal wage
c) MRP of labour = ARP d) MRP of labour = average wage
Select the correct combination from above :
A) a) and b)
B) c) and d)
C) a) and c)
D) a) and d)
Ans) A
(16) According to Harrod, neutral technical progress is characterized as :
A) Capital augmenting
B) Labour augmenting
C) Both labour and capital augmenting
D) Productivity increasing
Ans) B
(17) The capacity creating aspect of investment in growth theory was explained by :
A) R.F. Harrod
B) E.D. Domar
C) R.M. Solow
D) P.A. Samuelson
Ans) B
(18) The rate at which banks lend to RBI is known as :
A) Bank Rate
B) Repo Rate
C) Reverse Repo Rate
D) Interest Rate
Ans) C
(19) Assertion (A) : AK model is an endogenous model.
Reason (R) : This is due to absence of diminishing returns to scale with respect to capital.
Then which of the following options is correct ?
A) Both (A) and (R) are true and (R) is the correct explanation of (A).
B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
C) (A) is true but (R) is false.
D) (A) is false but (R) is false.
Ans) A
(20) Assertion (A) : According to Marx in a capitalist society organic composition of capital increases with time.
Reason (R) : Technological progress is continuously more capital intensive.
Select the answer from the code given below :
Codes :
A) Both (A) and (R) are true and (R) is the correct explanation of (A).
B) Both (A) and (R) are true and (R) is not the correct explanation of (A).
C) (A) is true but (R) is false.
D) (A) is false but (R) is true.
Ans) A
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