List of practice Questions

Tax holidays and cash grants are examples of

Match List-I with List-II:

List-I(Scenarios)		List-II(Type of Externality)
A	Apple farmer who has his orchard next to a beekeeper	I	Positive Consumption
B	Villages downstream from a manufacturing plant	II	Negative Consumption
C	An unvaccinated family living next door to a family who has received the COVID-19 vaccination	III	Positive Production
D	Rice farmer who has his field next to a chemical plant	IV	Negative Production

Choose the correct answer from the options given below

What does a bank do if there are no excess reserves?

Which of the following is not a part of the national income?

Why is the Phillips curve negatively sloped?

If the GDP of an economy be Rs.100 and the autonomous aggregate investment and ex-post aggregate saving be Rs.30 in equilibrium, what would be the aggregate saving in equilibrium in that economy if the aggregate investment remains at Rs.30 and the average saving propensity increases from 30% to 40%?

Match List-I with List-II:

List-I(Works)		List-II(Authors)
A	Theory of Moral Sentiments	I	J.M. Keynes
B	Theories of Surplus Value	II	J.S. Mill
C	General Theory	III	Adam Smith
D	On Liberty	IV	Karl Marx

Choose the correct answer from the options given below

In a 2x2 general equilibrium model of exchange with goods X and Y and two consumers 1 and 2, both of whom have a weakly positive endowment of X and Y. In the exchange equilibrium, we know that:

A utility maximizing consumer has a utility function given by \(U(X,Y)=2X+Y\). He has a budget constraint given by \(X+2Y=10\). In equilibrium he purchases:

Stagflation describes a situation of:

The current account balance in an open economy:

Transfer pricing refers to:

If a group of countries abolish trade barriers between themselves and set common tariffs for other countries, this is known as:

Match List-I with List-II:

List-I		List-II
A	\( y = ln(x)\)	I	\(\frac{1}{x}\)
B	\(y=\frac{x^2}{4}\)	II	\(3x^2\)
C	\(y=x^3\)	III	\(\frac{x}{2}\)
D	\(y=x+1\)	IV	\(1\)

Choose the correct answer from the options given below

The shutdown point for a profit maximizing competitive firm in the short run is when the market price is equal to the:

Services such as the provision of clean air and national security are considered to be:

Debts which have to be paid at some specific future date are known as:

The mark-up as a fraction of price for the profit-maximizing quantity \( Q^{*} \) for a monopolist can be expressed in the following form:
\(\frac{p^{*} - C(Q^{*})}{p^{*}} = -\frac{1}{e^{*}}.\)
We can say from this that:

If a consumer definitely prefers a payment of INR 50 for sure to a lottery which promises rewards of INR 100 or INR 0 with probabilities of 1/2 each, then we can say that the consumer is:

Mr Tokai is very particular in how he makes his coffee. He is completely inflexible in that he can only take 1 teaspoon of coffee with 2 teaspoons of sugar. Any more coffee or sugar given to him is discarded in his quest for the perfect coffee. Suppose you give him 9 teaspoons of coffee and 2 teaspoons of sugar. How many cups of coffee can he create from this?

In the table below, firm 1 and firm 2 can cooperate to share market profits or compete with each other. The figures in the cells represent the profits in crores of INR. They can either cooperate with each other where they share INR 10 crores equally. Alternatively, they can compete, which lowers the market output to INR 4 crores, which they share equally. If one of the firms competes while the other cooperates, the former obtains INR 10 crore of profit while the other makes zero profit. In equilibrium, firm A and firm B should respectively:

Firm 2	Cooperate	Compete
Firm 1	5, 5	0, 10
Compete	10,0	2, 2

Keeping a consumer’s income constant, if bundle X is chosen by a consumer when bundle Y is available, then when bundle Y is chosen, X must not be a feasible alternative. This property of consumer behaviour is known as:

In Ronald Coase's Nobel winning Coase theorem, if two bargaining parties have zero transaction costs, well-defined property rights over the good and there are no income effects:

For a manufacturing firm, the cost function is given by \(C = q^{3} + 2q^{2} + q + 1.\) The marginal and average costs at \(q = 10\) units are respectively given by:

An allocation for agents in an economy, x, is said to be Pareto superior to another allocation y if moving from allocation y to allocation x: