I. It aims at maximising of individual firm's profit.
II. It decides the total output in the industry to which Cartel represents.
III. It does not fix the price at which members sell their output.
Answer from the code given below :
A) All are true.
B) I and II are true.
C) Only II is true.
D) Only I and III are true.
Ans) C
(2) Why deos demand curve have a negative slope ?
I. Due to income effect only
II. Due to substitution effect
Answer from the code below :
A) Both I and II
B) Only I
C) Only II
D) Neither I nor II
Ans) C
(3) In the entry prevention model of Bain, firms charge premium over -
A) Long period competitive price
B) Short period competitive price
C) Lowest average cost
D) None of the above
Ans) A
(4) Which among the following is not well matched ?
Goods Nature
A) Fishing in the large - Non-exclusive but rival
B) Air - Non-exclusive and non-rival
C) Use of a light house - Rival
D) Stock of washing machine - Exclusive
Ans) C
(5) The slope of the production possibility curve is the -
A) Marginal rate of exchange
B) Marginal rate of substitution
C) Average rate of transformation
D) Marginal rate of transformation
Ans) D
(6) The gain in profit income from an increase in immigration according to this diagram is :
A) The area BDL'L
B) The area WBDW'
C) The areas WBFW' and FDL'L together
D) The areas WBDW' and FDL'L together
Ans) B
(7) The demand for rare painting, and rare stamps etc. is explained by which among the following effect ?
A) Snob effect
B) Bandwagon effect
C) Veblen effect
D) None of the above
Ans) A
(8) A market is said to be economically efficient if it maximises -
A) Consumer surplus
B) Producer surplus
C) Aggregate of consumer and producer surplus
D) None of the above
Ans) C
(9) Who among the following economists are associated with the concept of Quasi rent ?
I. A. Marshall II. J. Robinson
III. D. Ricardo
Answer from the code below :
A) Only I and III
B) I and II
C) All the three
D) Only III
Ans) A
(10) In the adjoining diagram, which of the line represent law of returns ?
A) OA
B) BC
C) DE
D) Both B and C above
Ans) D
11) In the adjacent diagram, which of the following effects will alter the Aggregate Demand Curve AD ?
A) Trade effect
B) Liquidity effect
C) Wealth effect
D) All of the above
Ans) D
(12) Match List-I with List-II :
List-I
a. Keynes b. Irving Fisher c. Wicksell
d. Classical Economist
List-II
i. Interest is real phenomenon.
ii. Interest is non-monetary phenomenon.
iii. Interest is both monetary and non-monetary phenomenon.
iv. Interest is monetary phenomenon.
Select the correct answer from the codes given below :
Codes :
a b c d
A) iv ii iii i
B) i ii iii iv
C) iv iii ii i
D) ii i iv iii
Ans) A
(13) 1973 oil crisis also triggered a wide spread economic crisis in USA and some European nations. In this context which statements are true ?
A) It led to disillusionment with established policies based on Keynesian economics.
B) There emerged a malady known as stagflation.
C) New classical economics emerged as a challenge to Keynesian economics ideas.
D) All of the above are true.
Ans) D
(14) As per IS-LM framework, an increase in government expenditure will result in :
A) Increase in income and interest rate both.
B) Increase in income only.
C) Decrease in investment and interest rate both.
D) Decrease in income and interest rate both.
Ans) A
(15) Which of the following can be considered as leakages in the force of the multiplier ?
A) Higher propensity to import
B) Higher marginal propensity to save
C) Both A and B above
D) Neither A nor B above
Ans) C
(16) According to Robinson-Uzawa theorem, steady state growth is possible if the technical progress is :
A) Only Hicks neutral
B) Only Harrod neutral
C) Only Solow neutral
D) Both Hicks and Harrod neutral
Ans) B
(17) Which one of the following is not an assumption of permanent income hypothesis ?
A) Transitory income can be both positive and negative.
B) Permanent income depends on human and non-human wealth.
C) Transitory consumption can be both positive and negative.
D) Average propensity to consume is greater than marginal propensity to consume.
Ans) D
(18) The accelerator model predicts that changes in investment are determined by the changes in -
A) Interest
B) Output
C) Capital
D) Inventory
Ans) B
(19) Which among the following statements are true for Schumpeter's theory of economic development ?
I. Development is evolutionary.
II. Development is financed by real savings.
III. Capitalism keeps its character intact overtime.
Of the above which statement(s) is/are true ? Answer from the code below :
Codes :
A) Only I
B) Only I and II
C) All the above
D) None of the above
Ans) D
(20) Who among the following has not given his model based on the concept of unlimited supply of labour ?
A) D.W. Jorgensen
B) Ranis-Fei
C) W.A. Lewis
D) Gunnar Myrdal
Ans) D
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