KUET 2022 Question Paper M.A. Economics

FOR KUET EXAM PREPARATION

KUET 2022
Question Paper · M.A.
Economics
EXAM YEAR TYPE SUBJECT

KUET 2022 Question Paper M.A. Economics

Notes · Sample Papers · Previous Year Papers · Mock Tests

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025
Sr. No................,.....,..,....

ENTRANCE TESG2O22
m
SCHOOL OF' BUSINESS STUDIES

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ECONOMICS

m . Question Booklet s""i"" ! se
Allowed i se 70 Minutes la
TotalQuestions : 60
Time
la
Roll No. :
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ag Instructions for Candidates :
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1. Suppose with the increase in price of a good, 4. Desire to possess a unique commodity having
the total expenditure made by a consumer decrease, prestige value refers to which of the ocror
the price elasticity of demand (eo) is expected given effects ?

tobel (A) Demonstration effect
(A)e<l (B) Rachet effect
(C) Bandwagon effect
(B)eo=1
(D) Snob effect
(C) er> I
5. In case of two perfectly complementary goodr
(D) Nothing can be said with certainty the indifference curve will be :

2" Consider two goods X and Y as substitutes.
(A) A straight line
If the price of good Y increases fiom Rs. 20 to (B) Right angled with a bcnt convex ro rhc or.igi
Rs. 22 per hr-rndred grams. As a result ofthis the (C) Downward sloping convex to the origill
consumers demand for good X increases from (D) Downward sloping concave ro rhe origir
80 hundred grams to 90 hundred grams. The
6. If commodity Y (shown on the Y-axis) is a neutr
cross elasticity of demand of X for Y (e.) is
and commodity X (shown on the X axis) a goor
expected to be : then the indill'erence curve is a
direction of preferences to\\'ards
(A) ec: l 0
(A) Vertical straight line ; Easr
(B) e": l 25
(B) Vertical straightline ; Wcst
(C) e. = l.s0
(C) Horizontal straight linc ;Norrh
(D) e. : 2.0 (D) Horizontal straight line ; South
3. Marshall explained the downward sloping denand 7. The second order condition for the oonsunl(
curvc with the help of : equilibriun in case of two commodities X an
Y is that marginal rate ofsubstiiutio. Jt \ :.
(A) Substiturion efi!cr \- must be :
(B) Income effect (,{) Increasing
(c) Both (A) & (B) (B) Falling
(C) Same
(D) Neither (A) nor (B)
(D) Equal to their price ratios

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as t statements with respect
ag
,1"::lti-*" :"]"w siven
ro a portion ofdownward I l On which short_nu
sloping marginal cost curve if we pick
curve falling betow uriiiry up any
the X_axiJ point and multiply
the cost at that point
wirh
I. Marginal utility is negative corresponding quantity
of output produecd,
will
II. Marginal utility is positive yteld the lotal lixed
cosl which remains
conslanr

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throughout ?

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III. It.does not constitute

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a part of the demand

ry Jt constitutes a.cpart of de1na16 m
curve (A) Marginal cost curve

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(B) Average fixed
a a g
cost cur.ve

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"*u"
options:g
Cho.ose rhe correct

a
annyerfrom the below (C) Average vadable
given cost curve

(A) I&IV (D) Average total cost
curve
(B) I & III 12. The. second
order condition lbr
profir
(c) rr&ry maximizarion ofa
firm producing single
product
unqer general markel
(D) All the statements condirions is :
are vague

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(A) Marginal cost
o
c (B) Marginal revenue > Marginal cost
9. = Marginal
.
variabte proponions revenue
lT-1":"r..: idenriry rhe

em (C)
potnt of inflection,
as one where :
(A) Average product
l a s
g
cu.ve intersects
__-^"-"'" Marginal cost curve

a
margtnal rrlust cut the marginal
Product curve revenue curve from
(B) Average product below at equrlibrium
curve lies above pornt
ploduct curve marglnal
(D) Average cost curve
(C) Marginal product must intersecr marglnal
is maximum revenue curve
(D) Average product at equilibrium point
is maximum 13.
noo.o.,"te condition
I0. *. producrion function y
m
]fl,1i" for long_run

c. ofirm is
l:::lr.:. = t2vLK, equilibrium of a competitive
*nar m
,^*o*, L
coIncreasing m
is labour and K is
ilill","-,r
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capiral. (A) Priqe - Marginal
s
type of retums

em(B)
to scale does it exhibil

la Cost
Cost

s
?

g
(A)

la
(B) Price = Average

g a
a
Decreasing
(C) Pricg = Marginal
Cost = Ave&ge
(c) Negative Cost
(D) Price = Marginal
(D) Col)stant Cost = Minimum
Areragc
LOSt

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17' For a firm under monopoly
which on€ of the
cost function for a perfectly musl bc
14. Consider the shod-run below given condition. among others'
competitive firm given by TC =
2 + 10Q + Q'?' .atisfii for maximization ofprofits in the long
prevailing in run ?
Suppose the price of the product
market is Rs.16, what will be the
level of (A) Short-run average cost > Long -run average
the
cost
profit maximizing output ?
(B) Short-run average cost < Long -run average
(A) 5 cost

(C) Piice < Long-run average cost
(B) 4
(D) Price > Long-run average cost
(c) 3 different groups
18. When buyers are divided into
price is charged
and ftom each group a different
(D) 2 group'
which is the lowest demand price of that
this is called :
15. With the increase in demand in a decreasing'
(A) First degree price discriminatior
cost industry under perfect competition
:

(B1 Second degree price discrimination
(A) Lorg-run price of the good falls (C) Third degree price discdmination
(B) Long-run price of the good rises (D) No price discrimination of any degree
curve theory o
19' According to the kinked demand
(C) Long-run price ofthe good remains constant oligopoly. each oligopolist will face
a kinke
demand curve :
(D) None of these
l. the upper segment being relativel
With
perfect
16. In case of a firm operating under elastic
competition, you are given the following data : ll. With the upper segment being relativel
variable inelastic
Total fixed cost = Rs 50,000; Average
cost = Rs. 50 per unit; Sale price Rs
75 per l. With the lower segment being relative
of elastic
unit. What would be the break-even level
output ?
M With the lower segment being relative
inelastic
giv
(A) 1000 units Choose the correct snswer from belov'
oqtions :
(B) 2000 units
(A) II&w
(C) 3000 units (B) l&Iv
(D) 5000 units
(c) &l
(D) I & III

4
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20. Regarding Coumots duopoly equilibnum
solurion 23. The theory
constder the below given stalemenls ofsecond best was propounded
;
by:
I. Output js two_thirds ofmaximum
(A) Lipsey and Lancaster
possible
output (B) A. Marshal and A.C. pigou

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' II. Output is one-third
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of maximum possible (C) J.S. Bain

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output

.c the most profitable e
(D) Samuelson

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IIl. Price is two-thirds of
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pnce 24. Which one ofthe below
given
,a
consequences is

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the result of as).rnmetric information
rv. rnce ls one-third
price (A) Golden parachutes
Choose the correct ansr)er (B) Moral hazard
from below gtven
opnons ;
(C) Market for lernons
(A) r&m
(D) Principal-agentproblem
(B) II&ry
25. rJy'hich ofthe below given statemenr(s)

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(c) n & rrr regarding

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Keynesian theory of interest

I..c It is indeterminate
lblse is(are) ?
(D) r&Iv
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diseconomies in e II. It ignores the real
will be higher thanla
s
21. When there exist external

ag III. It ignores the monetary factors
consumption factors

(A) Social marginal utility; private
marginal
M It does not treat money supply as exogenously
utility determined
(B) p.r.r,late margiml utility; Choose the correct answer
Social marginal from foltowing
utility opnons :
(C) Social marginal cost; private (A) Only I is false
m
margnal cost

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(D) Privat€ marginal cost; Social (B) Orly II is false
o
marginal cost
,,
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s
*,]ire to achieve parero optimaliry
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lT-i.|", (C) Both I & II are false

s la
rn case ofa public good is attributed

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to the fact (D)
thal marginal cost of allowing i & IV are false
g
an lndividual to

a
consume tl is: 26. Ricardian theory of rent is based
on:
(A) Negative (A) Law of dimirishing returns
(B) Hish
(B) Law of increasing returns
(C) Infinite
.. (C) Law of constant returns
(D) Zero
(D) Law of negative returns

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given the following data: Normal tarii
27. According to Margioal Productivity theory the 30' You are
basis for derivation of demand curve for mte on the final commodity (n) = 0 2 Ratio o
labour
is provided by : the value ofthe imported input to the value o
the final commoditv (a) = 0 9. Nominal laril
(A) Marginal physical productivity of labour
rate on rhe imported input (b) = 0 what coul
(B) Malginal revenue productivity of labour be the effective rate of protection ?
curve (A)..50%
(C) Average ph)sical Foductivity of labour curve (B) 100%

(D) Average revenue productivity of labour curve (C) 150%

28. Under the aonditions of perfect competition in (D) 2OO%
the labour market and impelfect competition io
3 . con.id". the expression [(P*/P.)Q"]' wherein
1
l

the product market, marginal revenue prcduct price of nations exports, p* is natror
is index
(wage rate) will be less than the value of marginal
price index of impons, and e, is index of natior
product of labour in the :
volume ofexports. The above given expressi(
(A) Short-run then measures a nation's i

(B) Iong-run (A) N€t bader terms of trade

(C) Neither (A) nor (B) (B) lncome terms of trade
(C) Single factoral terms of trade
(D) Both (A) and (B)
(D) Double factoral terms of tade
29. Which one of the below given assumptions
with respect to labour in Ricardo's theory of 32' Most Favoued Nation (v1F|0 agreement
betw(

comparative advantage is false ? two nations to 'apply tariffs to each other
rates as low as those applied to any other nati(
(A) Labour is homogenous
is a provision that emerged under :
(B) Labour is fully employed (A) Smoot-Hawley Act
(C) Labour can move freely between the nations (B) Reciprocal Trade Arangement Act
(D) Labour can move freely among industries (c) GAIT
within nation
(D) v/ro

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33. Consider the expression ,,GNp
at market 36 F,o,r any srraight-line
prices _ depreciation _ consumption luncrion
rhal
indirecr taxes + *T]":, axis below the orrgrn
subsidies". which
measure of national
llll^ln"
wnlch on ail is one in
income the points on straighr
does it represent ? line :
(A) proeensity to consume

m
ll:Tce to < Ma.ginai

co
propensity
(A) NNp at factor cost consume

m .
c. o m
tB)
(B) NNp at market prices
m
l111,c1.1on""sity to consume > Marsinat
s e
a
propelsity

(C) GNp at factorsecost
to consume

g l
la a
(C) Average p;opensity

g
to consume Marginal

(D) r.rNP a
=
propensity to consume
(D).All of these
combinarions are possible
34. According to okun,s ,l]*,llly
j:,*"me and oumur via muruplier
law a one percentage
point *li
*rr oe teast if:
ncrease in unemployment
rate will in the short (A) Marginal propensity
be accompanied approximately to consume = I
1un by a decrease (B) Marginal propensity
ln actual total output fo consulns = g

m
relative to tltre economy's
,",
.c opropensity to consume
potential output propensity to save
by: Ylg1| = Marsinal

e m
s
(A) t% (D) Marginai propensity

l a
to consume > Marginal

g ,t
propensity to save

a
(B) 1.s%
,he presenr value
(c) 2.0% IT::::,1:"
from an invesrmenr
or Rs. ro00 ro
::.::":j*d
gtven the market
atier one yecr,
rale of interest ot
(D) 2s% lQ pqrssnl.
(A) Rs. 900
JJ. rjr. construcl ing Measure (B) Rs. 90S
of Economtc Welfare
rr" prof Nordhaus (c) Rs. 909
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and prof robin

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m
-uucu. among others. which (D) Rs. 920

c. o m expendirure
item ro CNp

e
estimates ? ,n
emExpenditure on ,regrettable nssgr.i1i.r, or rhe tax ;;,i,;;;; la
s
of sovernmenr
*::,,,:.^::lle
s g
equal

la(B) Costs arising
(A) "ruruprrer to 5,

a
whar wn,,t.t be rhe
varue

g
;::l#:rd
a
propensity ," that. marginar
from negativc exremalities
(A)+5 """'.;";#;;;.t,
(C) Leisure cost
(B) -5
(D) None of these (c) +4
(D) -q
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40. What will be the value offoreign trade multiplier, 44. In a liquidity trap characterization, which
given marginal propensity to consume 0.80, :
condition does prevail ?
and Marginal propensity to import : 0.30 ?
(A) 2 (A) Money demand is volatile
(B) 1.5 (B) Bond prices are €xpected to rise in future
(c) 2.s (C) Interest rate is expected to fall in future
(D) 3
(D) Monetary policy is effective as a stabilization
4l. You are given the following data for a particular
tool
economy:equilibrium income (Y) = 700;
autonomous consumption (C0) = 40; total 45. Given desired curency- deposit ratio denoted
consumption (C) = 400; lump sum tax
as 'c' and 'r'the desired reserve-deposit ratio,
(T) = 100. What would be the conect values
of marginal propensity to save (MPS) and which one of the below given expression
multiplier (K) ? reprcsents the credit multiplier formula ?
(A)MPS=0.6&K=1.66 l+c
(A)
_ c+t
(B) MPS=0.8&K=1.25
-
(c) MPS = 0.4 &K=2.s l-r
(B)
_ c+r
(D) MPs = 0.4 &K = t.66
-
Given consumption function C = 100 + 0.8Y 1+c
import function M = 150 + 0.201 investment (c)
- l+r
_

I = 100, and exports X = 350. What will be the
level of equilibrium income ? I
(D)
'
(A) 500 c+r
-
(B) 1000 46. Select the incorrect statement :

(c) 1500 (A) Money supply directly affects level of income
(D) None of these is Monetadst view
Which one ofthe below given assumptions does
(B) Money supply affects level of income via
not hold in case of classical quantity theory of
money ? interest rate is Keynesian view

(A) Velocity of money circulation ls constant (C) M, measure of money supply = M, r net
(B) Money supply is exogenously determined time deposits of banks
(C) Output is constant (D) Mn measure of money supply = Mr + post
(D) Price level is fixed office savings deposits

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47. All the points tying ro the teft of
IS curve show 50.
disequilibrium in the product market What factors determine the slope
ofthe lS curve ?
in which :
I. Saving > Investment I. Maiginal propensity to save
IL Saving < Investment II. Interest elasticity ofmoney demand

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III.. Income > (Consumption + Invesmenr) III. Income elasticity ofmoney demand

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M Income < (Consumptio! + Inveslment)
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IV Interest elasticity of investrnent
m . se
a
Cloose, tle correct answer

e l
from the options
s g
Choose the coftect answer

a
given below : from the options
l a
ag
given below :
(A) r&ry
(B) n&rv (A)r&m
(c) r & rrr (B) rr & rII
(D) tr & rII (c) r&ry
. Wiat would be the shapes ofLM and IS curves, (D) r&ry
ifinteresl elasricity ofmoney
demand and inrerest

m
51. Which one ofthe below given

o
etasttcity of investment are bolh ./ statements is not

c
low

function.
in line with the Keynesian aggregare
m
(A) LM will be steeper & IS will supply

e
be flatter

a s Marginal product of labour is variable
?
(B) Both LM and IS curves
l
will be sreeper
g
(A)
a
(C) LM will be flalrer & [S
steeper
(B) Money wage rcte is fixed
(D) Both LM and IS curves will
be flatter
(C) Price level is fixed
Which ofthe below given conditions
prevail in
equilibrium position of ISLM (D) It is pefecrly elastic
model r
L AD is perfectly elastic 52. If the aggregate demand schedule is
combined
II. AD is perfectly inelastic with classical aggregate supply schedute,
what

m
c. o
result will follow due to expansion
III. AS is perfectly elastic
om inelastic
ofaggregate

c m
demand ?

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IV AS is relatively
em
(A) Output and price level will rise
la s
s
lar&IIr ag
Choose the correct ahsleet
from the optons (B) Output will rise but price level
g
gtveh belott : wil remaln
a(A) sallle
(C) Price level will rise but output
(B) r&ry will remain
sarne
(c) II&xr
(D) rr&ry ,.(D) Output level will rise but price tevet will
fall
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53. Full employment of the economy is guaranteed 57. Natwal rate of unemployment or non-accelerating
in the classical model because : inflation rate of unemployment (NAIRU) is a
concept associated with which of the below
4 (A) Wages are flexible mentioned economists ?
(B) Pdces are flexible
(A) Milton Friedman
(C) Information is perfect
(B) J. M. Keynes
(D) AII of these
(C) Robert Lucas
Which one of the below given statements is not
true about balance of payments ? (D) Thomas Surgent
(A) Movement of financial assets among the 58 According to the Keynesian schools of thought
official holders of the two countries refers Philips curve in the long-run is :
to ofhcial setrlement lransactions (A) Perfectly elastic
(B) Cunent account balance is arrived at by (B) Perfectly inelastic
adding investment income and unilateral
(C) Upward sloping
transfers to the merchandise trade balance
(D) Downward sloping
(C) Any transaction that leads to the home
country's receiving pa)T nents from foreigners 59' If the exchang€ rate between India
and U.S-A-
changes from Rs. 80 : $1 to Rs. 82 : $ 1. which
is regarded as a credit it€m
statement(s) among the following is (arc) true 'l
(D) Unilateral transfers refer to gifts or grants
extended to or received fiom abroad for I. Exchange rate has depreciated for India
which no payment is received or made II. Exchange rate has risen for India
55. Which ofthe below given components constitute II[. Exchange rate has appreciated for lndia
the common determinant ofaggregate demand in
M Erchange rate has fallen for lndil
the Classical and Keynesian systems e
Choose your answcr frum thc hclo\ yivn
(A) Consumption options:
(B) Govemment spending (A) Only I & Il are true
(C) Private investment (B) Only I & IV are true
(D) Money supply (C) Only III & IV ar€ true
56. Adaptive expectations hypothesis relates to (D) Only III is tlue
which line of thinking in economics ? 60, Keynesian demand-pull inflation is ascribed to :
(A) Keynesianism (A) Monetary factors
(B) New Classical School (B) Real lactors
(C) Monetarism (C) Structural factors
(D) New Keynesian Economics,. (D) Increase in cost of production

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