Odisha CPET 2020 Question Paper Economics

COMMON P. G. ENTRANCE TEST – 2020

Test Booklet No. :

DEPT. OF HIGHER EDUCATION, GOVT. OF ODISHA
TEST BOOKLET

Subject Code 51 Subject ECONOMICS

Time Allowed : 90 Minutes Full Marks : 70
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XL – 22/11 ( Turn over )

XL – 22/11 (2) ( Continued )

1. An increase in demand means that :

(A) When price falls consumers are willing to purchase greater quantities of the
goods

(B) Consumers are willing to purchase greater quantities of the goods at the given
price

(C) When the price rises, consumers are willing to purchase greater quantities of
the goods

(D) Consumers cause the price to rise by buying greater quantities of the goods

2. The slope of the budget constraint line will change whenever the :

(A) Budget of the consumer changes

(B) Price of one of the two goods changes

(C) Preferences of the consumer changes

(D) Slope of an indifference curve changes

3. Economies of scale is said to occur when ––––––––– as the quantity of output
increases.

(A) Short-run average total cost falls

(B) Short-run average total cost rises

(C) Long-run average total cost falls

(D) Long-run average total cost rises

4. Consumer surplus is the :

(A) Difference between what the consumer is willing to pay and what the consumer
has to pay

(B) Surplus of goods the consumer has after consuming all he needs

(C) Excess number of goods consumers purchase over and above what they really
need

(D) Excess number of units firms produce over and above what consumers want to
purchase
XL – 22/11 (3) ( Turn over )

5. If the income effect is in the same direction as the substitution effect then the good
is :
(A) Normal
(B) Inferior but not Giffen
(C) Giffen
(D) There is not enough information to answer

6. If a firm is a price taker, its marginal revenue is :
(A) Equal to market price
(B) Less than market price
(C) Greater than market price
(D) A multiple of market price that may be either greater than or less than one

7. The short-run market supply curve is :
(A) The horizontal summation of each firm’s short-run supply curve
(B) The vertical summation of each firm’s short-run supply curve
(C) The horizontal summation of each firm’s short-run average cost curve
(D) The vertical summation of each firm’s short-run average cost curve

8. If production of a firm is given by Q = KL, then doubling both inputs :
(A) More than doubles output
(B) Exactly doubles output
(C) Increases output but does not double it
(D) Leaves output unchanged

9. The marginal physical productivity of labour is defined as :
(A) A firm’s total output divided by total labour inputs
(B) The extra output produced by employing one more unit of labour while allowing
other inputs to vary proportionately
(C) The extra output produced by employing one more unit of labour while holding
other inputs constant
(D) The extra output produced by employing one more unit of capital while holding
labour input constant
XL – 22/11 (4) ( Continued )

10. When the indifference curve between two goods is a downward sloping straight line,
it implies that the two goods are :
(A) Perfect substitutes
(B) Imperfect substitutes
(C) Perfectly complementary
(D) Not related to each other

11. Other things being equal, if a goods has more substitutes, its price elasticity of demand
shall be :
(A) Zero
(B) Unity
(C) Larger
(D) Smaller

12. Expenditure in Indian economy for one quarter of a year is as follows, all figures
being at market prices and in Rs. billion :
Consumption expenditure by households 80.
Consumption expenditure by non-profit institutions 5.
Consumption expenditure by general government 35.
Gross domestic fixed capital formation 20.
Changes in inventories 6.
Acquisition less of disposals of valuables 1.
Exports 40.
Imports 45.
What is GDP at market prices for that quarter ?
(A) Rs. 140 billion
(B) Rs.142 billion
(C) Rs. 240 billion
(D) Rs. 242 billion

13. The value of fiat money arises from :
(A) Its usefulness as a commodity
(B) Its ability to be redeemed in precious metals
(C) Its historical reputation as a currency that maintains its value in international
trade
(D) Its official status as a means of exchange
XL – 22/11 (5) ( Turn over )

14. The price relative for computers was 82.3 in 2019 calculated with a base period of
2017. This implies that :
(A) The price of computers was 82.3% higher in 2019 than in 2017
(B) The price of computers was Rs. 82.3 higher in 2019 than in 2017
(C) The price of computers was 17.7% lower in 2019 than 2017
(D) The real price of computers has fallen Rs.17.70 between 2017 and 2019
because of quality change

15. Which out of the following phenomenon is regarded as ‘Stagflation’ ?
(A) It is a situation when aggregate demand in an economy outpaces aggregate
supply causing persistent price rise.
(B) It is a situation of persistent rise in the price level along with dip in growth and
increase in unemployment.
(C) It is a situation caused by an increase in prices of inputs like labour, raw material
etc.
(D) It is a situation when a nation experiences very high and accelerating inflation.

16. An increase in the marginal propensity to consume will :
(A) Lead to the consumption function becoming steeper
(B) Shift the consumption function upwards
(C) Shift the consumption function downwards
(D) Shift the savings function upwards

17. The term ‘accelerator’ is associated with the name of :
(A) J.M. Clark
(B) J. M. Keynes
(C) J. B. Say
(D) None of them

18. In business cycles literature the opposite of a trough is :
(A) An inflation
(B) A hyperinflation
(C) A trend
(D) A peak
XL – 22/11 (6) ( Continued )

19. A situation where people who have taken out insurance behave more recklessly as a
result is known as :
(A) Fraud
(B) Asymmetric information
(C) Moral hazard
(D) Adverse selection

20. In the Mundell-Fleming framework, in a small open economy under a fixed exchange
rate :
(A) Monetary policy is effective and fiscal policy is very ineffective
(B) Monetary policy is ineffective and fiscal policy is very effective
(C) Both monetary policy and fiscal policy are effective
(D) The government must abandon public spending

21. When the value of the Indian Rupee changes from $1.25 for Rs. 100 to $1.50 for Rs.
100, then the :
(A) Rupee has appreciated and the dollar has appreciated
(B) Rupee has depreciated and the dollar has appreciated
(C) Rupee has appreciated and the dollar has depreciated
(D) Rupee has depreciated and the dollar has depreciated

22. Price stability is desirable because :
(A) Inflation creates uncertainty, making it difficult to plan for the future
(B) Everyone is better off when prices are stable
(C) Price stability increases the profitability of the central bank
(D) It guarantees full employment

23. The vicious circle theory states that :
(A) Growing government assistance create addiction to welfare programs
(B) Low income levels create pressure for money creation
(C) Low income levels create pressure for cheap imports
(D) Low per capita income creates low savings that keep incomes low
XL – 22/11 (7) ( Turn over )

24. The concept of Physical Quality of Life Index was developed by :
(A) Morris D Morris (B) Karl Marx
(C) Adam Smith (D) UNDP

25. Income inequalities are often shown on a :
(A) Production possibility curve
(B) Marginal inequality curve
(C) Sen’s curve
(D) Lorenz curve

26. According to W.W. Rostow, there are ––––––––– stages of economic growth.
(A) Two (B) Three
(C) Four (D) Five

27. In the Harris and Todaro model of rural-urban migration :
(A) The migration of workers is studied in a three-sector economic system
(B) The rural sector is specialized in the production of agricultural goods
(C) The productive process of the rural sector can be described by a CES
production function
(D) The productive process in the urban sector is described by the
Leontief Production Function

28. As economic development proceeds, income inequality tends to follow a curve that
is :
(A) V-shaped
(B) Inverted U-shaped
(C) L-Shaped
(D) S-Shaped

29. The concept of environmental deficit :
(A) Suggests that much of environmental damage is intended
(B) Lets us know that the environmental deficit is irreversible
(C) Reminds us that the state of the environment is a social issue
(D) The humans are a liability on the environment

XL – 22/11 (8) ( Continued )

30. The free-rider problem :
(A) is the tendency for too little of a public goods to be provided if it is produced
and sold privately
(B) is that the amount of the public goods depends on the actions of politicians,
bureaucrats and voters
(C) means the principle of minimum differentiation
(D) implies that the voters might be rationally ignorant

31. Which of the following would be an example of foreign direct investment from India to
Taiwan ?
(A) An Indian bank buys bonds issued by a Taiwan computer manufacturer
(B) An Indian car manufacturer enters into a contract with a Taiwan firm for the latter
to make and sell it spark plugs
(C) Microsoft hires a Taiwanese computer programmer to debug some software
for it
(D) Mr. Ram Manohar (an Indian citizen) sets up an electronics firm in Taipei

32. Capital deepening means :
(A) The ratio of capital to labour, reflecting the quantity of capital used by each
labourer in production
(B) The increase in the ratio of capital stock to GDP
(C) A rise in the ratio of capital to labour
(D) Capital and labour are complementary in the production process

33. The stage of growth in which technology spreads to all areas of the economy and the
range of production expands is known as the :
(A) Age of high mass consumption (B) Drive to maturity
(C) Take-off (D) Preconditions for take off

34. Which of the following measures of central tendency is not based on all items ?
(A) Mode (B) Arithmetic mean
(C) Harmonic mean (D) Weighted arithmetic mean

35. A matrix with dimension (m x 1) is known as a :
(A) Row vector (B) Column vector
(C) Symmetric matrix (D) Identity matrix
XL – 22/11 (9) ( Turn over )

36. If the order of matrix A is . And the order of B is . Then the order of matrix
A x B is :
(A) mxp (B) pxp
(C) n x m (D) m x n

37. Product of a column vector of order n and a row vector of order n gives us :
(A) A row matrix of order n (B) A column matrix of order n
(C) A square matrix of order n (D) An identity matrix of order n

38. The ratio of a new price to the base year price in calculation of an Index number is
called the :
(A) Price relative (B) Price absolute
(C) Price ratio (D) Price comparative

39. If total sum of square is 20 and the sample variance is 5 then total number of
observations are :
(A) 15 (B) 25
(C) 4 (D) 10

40. If a number is added to a data set which is far away from the arithmetic mean, then
what happens to the standard deviation?
(A) Increases (B) Decreases
(C) Does not change (D) May increase or decrease

41. Which of the following is not a measure of the variability of data ?
(A) Range (B) Median
(C) Mean deviation (D) Coefficient of Variance

42. Which one of the following sampling designs comes under probability sampling ?
(A) Quota sampling (B) Random sampling
(C) Judgement sampling (D) Convenient sampling

43. A skew symmetric matrix is one for which ?
(A) All diagonal elements are zero (B) All diagonal elements are 1
(C) A = AT (D) A = – AT
XL – 22/11 ( 10 ) ( Continued )

44. lim [e x -1] / x as x approaches 0 :

(A) 0 (B) 1

(C) Infinite (D) Does not exist

45. What is the derivative of y with respect to x if y = (x + 1)3 – x3 ?

(A) 3 + 6x (B) 3x + 6

(C) 6x – 3 (D) 3x – 6

46. If the average revenue function is given by AR = 3q + 5, where q is the level of output,
the marginal revenue function is given by :

(A) 3q + 5 (B) 6q – 5

(C) 3q2 + 5q (D) 6q + 5

47. If total cost function is given by C = (q3/ 3) – q2 – 35q + 10, where q is the level of
output, the output for which average cost equals marginal cost is :

(A) 5 (B) 7

(C) 3 (D) 4

48. Increase in the number of patients in the hospital due to heat stroke is :

(A) Secular trend (B) Seasonal variation

(C) Irregular variation (D) Cyclical variation

49. A trend is the better fitted trend for which the sum of squares of residuals is :

(A) Positive (B) Negative

(C) Maximum (D) Minimum

50. In a two variable linear regression analysis, if the two regression lines coincide, then
it implies that :

(A) The two variables are independent

(B) The two variables are orthogonal

(C) The two variables are perfectly linearly related

(D) None of the above

XL – 22/11 ( 11 ) ( Turn over )

51. The function y = x2 – 5x + 6 attains a critical point at which of the following values of x ?
(A) X = 3 and X = 2 (B) X = 2.5
(C) X =3 (D) X = 2

52. What is the probability of drawing a red king card from a well shuffled pack of
cards ?
(A) 1/52 (B) 1/39
(C) 1/26 (D) 1/13

53. Scientific Method is committed to –––––––––.
(A) Objectivity (B) Ethics
(C) Proposition (D) Neutrality

54. ––––––––– is the first step of research process.
(A) Formulation of a problem
(B) Collection of Data
(C) Editing and Coding
(D) Selection of a problem

55. Questionnaire is filled by –––––––––.
(A) Enumerator
(B) Either enumerator or respondent
(C) Respondent
(D) None of the above

56. Failure to acknowledge the borrowed material is called (Take and use of others as
one’s own) :
(A) Acknowledgement (B) Footnote
(C) Plagiarism (D) Index

57. Interview with a detailed standardized schedule is called :
(A) Structured Interview
(B) Clinical Interview
(C) Direct Interview
(D) Group Interview
XL – 22/11 ( 12 ) ( Continued )

58. “Empirically verifiable observation” is :
(A) Theory (B) Value
(C) Fact (D) Statement

59. A comprehensive full Report of the research process is called :
(A) Thesis / Dissertation (B) Summary Report
(C) Abstract (D) Article

60. What was the largest source of revenue for Britishers in India ?
(A) Textile and Jute Industry (B) Gems and Stone Industry
(C) Temple tax (D) Land revenue

61. The compound annual growth rate of population in India during 2001-2011 was :
(A) 2.11 (B) 1.93
(C) 1.64 (D) 1.22

62. Working population includes those persons who fall in the age group of :
(A) 0-15 years (B) 6-14 years
(C) 15-59 years (D) 60 years and above

63. NITI Ayog is a/an :
(A) Statutory Body (B) Constitutional Body
(C) Extra-Constitutional Body (D) Section 8 Company

64. The Apex institution in the space of agriculture credit is :
(A) State Bank of India (B) Reserve Bank of India
(C) NABARD (D) Regional Rural Bank

65. Land reform program in India includes 1.
Elimination of intermediaries 2.
Determination of ceiling of holdings per family 3.
Excess use of insecticides and fertilizers 4.
Consolidation of holdings :
(A) 1, 2 and 3 are correct (B) 2, 3 and 4 are correct
(C) 1, 2 and 4 are correct (D) 1, 3 and 4 are correct
XL – 22/11 ( 13 ) ( Turn over )

66. The biggest public sector undertaking in India is :
(A) Air India (B) Indian Railway
(C) Iron and Steel Plants (D) None of these

67. Which one of the following is the most significant feature of the Indian population ?
(A) Declining birth rate
(B) Improvement in literacy rate
(C) Improvement in health conditions
(D) The size of its adolescent population

68. Who made the first attempt to measure National Income of India before the
Independence?
(A) Dada Bhai Naoroji (B) Findlay Shirras
(C) V K R V Rao (D) William Digby

69. Which of the following pairs is not matched correctly ?
(A) Blue Revolution – Fish Production
(B) Golden Revolution – Horticulture
(C) Round Revolution – Tomato Production
(D) Yellow Revolution – Oilseed and edible oil

70. Which Five Year Plan gave emphasis on removal of poverty for the first time ?
(A) Fourth Five – Year Plan
(B) Fifth Five – Year Plan
(C) Sixth Five – Year Plan
(D) Seventh Five – Year Plan

XL – 22/11 ( 14 ) ( Continued )

SPACE FOR ROUGH WORK

XL – 22/11 (2,960) ( 15 ) Economics