JAM 2024 Question Paper Economics (EN)

JOINT ADMISSION TEST FOR MASTERS

2024

IIT

JAM
2024
Question Papers | Answer Key

The Joint Admission Test for Masters is a
common admission test conducted every
year for admission into Master of Science
and other post-graduate science
programs at Indian Institutes of
Technology

JAM 2024 ECONOMICS (EN)

Section A: Q.1 – Q.10 Carry ONE mark each.

Q.1 Which one of the following is a non-parametric test?

(A) 𝜒 2 - test

(B) 𝑡 - test

(C) 𝐹 - test

(D) 𝑧 - test

Q.2 Let 𝑥 and 𝑦 be two consumption bundles, assumed to be non-negative and
perfectly divisible. Further, the assumptions of completeness, transitivity,
reflexivity, non-satiation, continuity, and strict convexity are satisfied.
Then, which of the following statements is NOT CORRECT?

(A) Either 𝑥 ≿ 𝑦, or 𝑦 ≿ 𝑥, or both

(B) 𝑦 ≻ 𝑥 if 𝑦 contains more of at least one good and no less of any other

(C) 𝑥 is not indifferent to itself

(D) For 𝑥 (or 𝑦), its better set is strictly convex

EN 1/39

JAM 2024 ECONOMICS (EN)

Q.3 Consider a production function of the form:

𝑌 = 𝑎 log 𝐿 + (1 − 𝑎) log 𝐾 , 𝑎 ∈ (0, 1), 𝑎 ≠ 0.5

where, 𝑌 is output, 𝐿 is labour, and 𝐾 is capital.

Then, the absolute value of elasticity of substitution is

(A) 1

(B) 𝑎

(C) (1 − 𝑎)

(D) ∞

Q.4 Consider a closed economy with consumption function 𝐶 = 2 + 0.5𝑌, where
𝑌 is income. The government expenditure is 3 and investment function is
𝐼 = 4 − 0.5𝑟, where 𝑟 is interest rate. Then, the slope of the IS curve will be

(A) 1

(B) −0.5

(C) 1.5

(D) −1

EN 2/39

JAM 2024 ECONOMICS (EN)

Which of the following was announced in the Union Budget
Q.5
2023-24 to enhance the skills of lakhs of youth in the next 3 years?

(A) Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 1.0

(B) Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2.0

(C) Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 3.0

(D) Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0

Q.6 Suppose a random variable 𝑋 follows an exponential distribution with mean 50.
Then, the value of the conditional probability 𝑃(𝑋 > 70 | 𝑋 > 60) is

(A) 𝑒 − 75

(B) 𝑒 − 65

(C) 𝑒 − 15

(D) 𝑒 − 76

EN 3/39

JAM 2024 ECONOMICS (EN)

Q.7 Which of the following measures was NOT initiated by the Government of India
as a part of economic reforms in 1991?

(A) Announcement of new industrial policy

(B) Full convertibility of rupee on the capital account

(C) Removal of Quantitative Restrictions

(D) Guidelines for investment by Foreign Institutional Investors (FIIs) in the capital
market

Q.8 Suppose nominal GDP equals 1,000 units and money supply equals 250 units.
Based on the quantity theory of money, the velocity of money equals

(A) 40

(B) 4

(C) 2,50,000

(D) 500

EN 4/39

JAM 2024 ECONOMICS (EN)

Q.9 Let 𝑆1 = {(𝑥, 𝑦) ∈ 𝑅 2 ∶ 𝑥 + 𝑦 ≥ 1, 𝑥 + 𝑦 ≤ 2, 𝑦 ≥ 𝑥 2 , 𝑥, 𝑦 ≥ 0} and
𝑆2 = {(𝑥, 𝑦) ∈ 𝑅 2 ∶ 𝑥 + 𝑦 ≥ 1, 𝑥 + 𝑦 ≤ 2, 𝑦 ≤ 𝑥 2 , 𝑥, 𝑦 ≥ 0}.

Then, which of the following is CORRECT ?

(A) Both 𝑆1 and 𝑆2 are convex sets

(B) 𝑆1 is a convex set but 𝑆2 is not a convex set

(C) 𝑆2 is a convex set but 𝑆1 is not a convex set

(D) Neither 𝑆1 nor 𝑆2 are convex sets

Q. 10 1 𝑥
lim (1 + 𝑥) is equal to
𝑥→∞

(A) 𝑒

(B) 1/𝑒

(C) 1

(D) ∞

EN 5/39

JAM 2024 ECONOMICS (EN)

Section A: Q.11 – Q.30 Carry TWO marks each.

Q.11 Two distinct integers are chosen randomly from 5 consecutive integers. If the
random variable 𝑋 represents the absolute difference between them, then the
mean and variance of 𝑋 are, respectively,

(A) 1 and
3
2

(B) 2 and 5

(C) 1 and 3

(D) 2 and 1

Q.12 Consider two independent random variables: 𝑋~𝑁(5, 4) and 𝑌~𝑁(3, 2).
If (2𝑋 + 3𝑌)~𝑁(𝜇, 𝜎 2 ), then the values of mean (𝜇) and variance (𝜎 2 ) are

(A) 𝜇 = 19 and 𝜎 2 = 34

(B) 𝜇 = 8 and 𝜎 2 = 14

(C) 𝜇 = 19 and 𝜎 2 = 14

(D) 𝜇 = 8 and 𝜎 2 = 34

EN 6/39

JAM 2024 ECONOMICS (EN)

The optimal value of the linear programming problem
Q. 13
Maximise 𝑍 = 2𝑥 + 3𝑦
subject to
5𝑥 + 4𝑦 ≤ 20,
3𝑥 + 5𝑦 ≤ 15,
2𝑥 + 𝑦 ≤ 4,
𝑥, 𝑦 ≥ 0,

is

(A) 4

(B) 64
7

(C) 9

(D) 72
7

EN 7/39

JAM 2024 ECONOMICS (EN)

Q.14 The solution of the differential equation

𝑥𝑦 𝑑𝑥 − (𝑥 2 + 𝑦 2 ) 𝑑𝑦 = 0, 𝑦(0) = 1

is

𝑥
(A)
𝑦=𝑒𝑦

(B) 2
𝑥2
𝑦 =𝑒 𝑦2

𝑥
(C)
𝑦2 = 𝑒 𝑦

(D) 𝑥2
𝑦=𝑒 𝑦2

Q.15 Which of the following is NOT CORRECT?

(A) Permanent settlement was introduced by Lord Cornwallis in Bengal in 1793

(B) The First War of Indian Independence occurred in 1857

(C) Dadabhai Naoroji prepared the estimate of national income in 1860

(D) In 1905, Swadeshi Movement was started in India

EN 8/39

JAM 2024 ECONOMICS (EN)

Q.16 In a two-player game, player 1 can choose either M or N as strategies. Player 2
can choose either X, Y, or Z as strategies. The payoff matrix is as follows:

X Y Z

M 3, 1 0, 0 −1, 2

N 0, 0 1, 3 0.5, 1

Which set of strategy profiles survives iterated elimination of strictly dominated
strategies?

(A) (N, Y)

(B) (M, X)

(C) (N, Z)

(D) (M, Z)

EN 9/39

JAM 2024 ECONOMICS (EN)

Q.17 For a profit maximising monopolist, the ratio of the profit margin to price (also
known as the Lerner Index or the relative mark-up) has a relationship with the
price-elasticity of demand at the profit maximising price. Then, which of the
following statements is CORRECT?

(A) The larger the elasticity of demand at the profit maximising price, the greater is
the relative mark-up

(B) The power to sustain a price higher than the marginal cost depends only on the
profit maximising price

(C) At the profit maximising price, given costs are greater than zero, the price
elasticity of demand is strictly larger than unity

(D) At the revenue maximising price, the price elasticity of demand is greater than
unity

EN 10/39

JAM 2024 ECONOMICS (EN)

Q.18 To study the effect of 𝑋1 and 𝑋2 on 𝑌, the following regression model is estimated
using a large sample:

𝑌 = 𝛼 + 𝛽1 𝑋1 + 𝛽2 𝑋2 + 𝜀

The OLS estimates and standard errors are presented below:

𝛼 𝛽1 𝛽2
Estimates 2.30 0.39 1.80
Standard errors 1.15 0.13 1.00

Given the above information, which of the following is CORRECT?

(A) 𝛼 is statistically significant at 1% level, 𝛽1 is statistically significant at 5% level,
and 𝛽2 is statistically significant at 10% level

(B) 𝛼 is statistically significant at 1% level, 𝛽1 is statistically significant at 10% level,
and 𝛽2 is statistically significant at 5% level

(C) 𝛼 is statistically significant at 5% level, 𝛽1 is statistically significant at 1% level,
and 𝛽2 is statistically significant at 10% level

(D) 𝛼 is statistically significant at 5% level, 𝛽1 is statistically significant at 10% level,
and 𝛽2 is statistically significant at 5% level

EN 11/39

JAM 2024 ECONOMICS (EN)

Q.19 Suppose high quality and low quality products are sold at the same price to the
buyers. The buyers have less information to determine the quality of the product
compared to the sellers at the time of purchase. Which of the following problems
arises in this situation?

(A) Moral hazard problem

(B) Market signaling problem

(C) Principal-agent problem

(D) Adverse selection problem

Q.20 Individuals who were either unemployed or out of labour force but had worked
for at least 30 days over the reference year were included in the labour force by
the NSSO in its labour force surveys. Under which one of the following
classifications does the above procedure appear?

(A) Usual Principal Status

(B) Usual Principal and Subsidiary Status

(C) Current Weekly Status

(D) Current Daily Status

EN 12/39

JAM 2024 ECONOMICS (EN)

Q.21 Let the production function be given by

𝛽 1−𝛼−𝛽
𝑌𝑡 = 𝐴𝑡 𝐾𝑡𝛼 𝐻𝑡 𝐿𝑡

where, at time 𝑡, 𝑌𝑡 is output, 𝐴𝑡 is level of Total Factor Productivity, 𝐾𝑡 is
1 2
physical capital, 𝐻𝑡 is human capital, and 𝐿𝑡 is labour. 𝛼 = and 𝛽 = .
5 5

If the growth rate of 𝑌𝑡 equals 10 percent, the growth rate of 𝐾𝑡 equals 5 percent,
the growth rate of 𝐻𝑡 equals 5 percent, and the growth rate of 𝐿𝑡 equals 10 percent,
then the growth rate of 𝐴𝑡 is

(A) 2 percent

(B) 3 percent

(C) 5 percent

(D) 10 percent

EN 13/39

JAM 2024 ECONOMICS (EN)

Consider an economy where technology is characterised by the production
Q.22
function:
𝑌 = 50𝐾 0.4 𝐿0.6
where, Y is output, K is capital, and L is labour.

Assuming perfect competition in the product market and in the factor markets,
the share of total income paid to labour is equal to

(A) 0.2

(B) 0.3

(C) 0.4

(D) 0.6

EN 14/39

JAM 2024 ECONOMICS (EN)

Q.23 In a two-player game, player 1 can choose either U or D as strategies. Player 2
can choose either L or R as strategies. Let 𝑐 be a real number such that
0 < 𝑐 < 1. If the payoff matrix is

L R

U 0, 0 0, −c

D −c, 0 1 − c, 1 − c

then the number of pure strategy Nash Equilibria in the game equals

(A) 1

(B) 2

(C) 3

(D) 4

EN 15/39

JAM 2024 ECONOMICS (EN)

Q24 The Rangarajan Panel on 4th June 1993 submitted recommendations related to
Balance of Payment (BoP). Which one of the following was NOT a part of the
Panel’s recommendations?

(A) Efforts should be made to replace debt flows with equity flows

(B) The ratio of debt linked to equity should be limited to 1:4

(C) The minimum targets for foreign reserves should be fixed in such a way that the
reserves are generally in a position to accommodate imports of 3 months

(D) No sovereign guarantee should be extended to private sector

EN 16/39

JAM 2024 ECONOMICS (EN)

Q.25 According to the “State of Inequality in India Report” from the Institute for
Competitiveness, released on 18th May 2022, which of the following statements
is CORRECT?

(A) In India, the percentage of anaemic children under 5 years of age has decreased
from 67.1 percent in 2015-16 to 58.6 percent in 2019-21

(B) The female labour force participation rate in India has increased from
49.8 percent in 2017-18 to 53.5 percent in 2019-20

(C) Using data from the Periodic Labour Force Survey (PLFS) 2019-20, the report
shows that individuals with monthly salary of Rs. 25,000 are among the top 10
percent of total wage earners

(D) By the end of 2019-20, 95 percent of all schools in India have functional toilets
for girls

EN 17/39

JAM 2024 ECONOMICS (EN)

Q.26 Consider the production function:

2
𝑄(𝐾, 𝐿) = (2√𝐾 + 3√𝐿)

where 𝑄 is the output, 𝐾 is capital, and 𝐿 is labour.

If 𝜂𝐾 and 𝜂𝐿 denote the output elasticities with respect to capital and labour,
respectively, then the value of (𝜂𝐾 + 𝜂𝐿 ) is

(A) 2

(B) 1

(C) 4

(D) 0.5

Q.27 Consider a short-run Phillips curve with a constant expected rate of inflation. If
the aggregate demand decreases unexpectedly and the labour force remains the
same, then what will happen to aggregate price and unemployment rate?

(A) Aggregate price rises and unemployment rate falls

(B) Aggregate price falls and unemployment rate rises

(C) Aggregate price rises and unemployment rate rises

(D) Aggregate price falls and unemployment rate falls

EN 18/39

JAM 2024 ECONOMICS (EN)

Q.28 Suppose the price elasticity of demand (𝑒𝐷 ) is −
1
and the price elasticity of
5
2
supply (𝑒𝑆 ) is . Then, the incidence of a specific (or unit) tax on the firms
5
is equal to

(A) 1
3

(B) 2
3

(C) 1
2

(D) 1
4

EN 19/39

JAM 2024 ECONOMICS (EN)

Q.29 The differential equation satisfied by circles with radius 3 and center lying on the
𝑌-axis is

(A) 𝑑𝑦 2 𝑥2
( ) =
𝑑𝑥 9 + 𝑥2

(B) 𝑑𝑦 2 9 + 𝑦2
( ) =
𝑑𝑥 𝑦2

(C) 𝑑𝑦 2 𝑥2
( ) =
𝑑𝑥 9 − 𝑥2

(D) 𝑑𝑦 2 9 − 𝑦2
( ) =
𝑑𝑥 𝑦2

EN 20/39

JAM 2024 ECONOMICS (EN)

Q.30 Suppose expected inflation rate (𝜋𝑡𝑒 ) of an individual is formed as:

𝜋𝑡𝑒 = (1 − 𝜃) 𝜋̅ + 𝜃 𝜋𝑡−1

where, 𝜋̅ is constant inflation rate, 𝜋𝑡−1 is previous year’s inflation rate, and
0 ≤ 𝜃 ≤ 1 is weight assigned to inflation rate at different points in time.

Then, which of the following is NOT CORRECT?

(A) If 𝜃 = 0, then the individual assumes a constant inflation rate

(B) If 𝜃 ≈ 1 and 𝜋̅ < 𝜋𝑡−1 , then the individual expects this year’s inflation rate to
be similar to last year

(C) The original Phillips curve is derived under the assumption of 𝜃 ≈ 1

(D) A modified Phillips curve is derived under the assumption of 𝜃 = 1

EN 21/39

JAM 2024 ECONOMICS (EN)

Section B: Q.31 – Q.40 Carry TWO marks each.

Q.31 In the case of a small open economy with fixed exchange rate regime and
imperfect capital mobility, which of the following is/are CORRECT?

(A) Fiscal contraction will lead to Balance of Payment deficit in the short-run if the
slope of LM curve is greater than the slope of Balance of Payment curve

(B) Fiscal contraction will lead to Balance of Payment deficit in the short-run if the
slope of LM curve is less than the slope of Balance of Payment curve

(C) Monetary expansion leads to Balance of Payment surplus in the short-run
irrespective of the slopes of the LM curve and the Balance of Payment curve

(D) Monetary expansion leads to Balance of Payment deficit in the short-run
irrespective of the slopes of the LM curve and the Balance of Payment curve

EN 22/39

JAM 2024 ECONOMICS (EN)

Q.32 Consider the following three utility functions:

𝐹 = (4𝑥1 + 2𝑥2 ), 𝐺 = min (4𝑥1 , 2𝑥2 ) and 𝐻 = (√𝑥1 + 𝑥2 )

where, 𝑥1 and 𝑥2 are two goods available at unit prices 𝑝𝑥1 and 𝑝𝑥2 , respectively.

Which of the following is/are CORRECT for the above utility functions?

(A) The marginal rate of substitution is given by −1, −2, and −0.5√𝑥1 for the utility
functions 𝐹, 𝐺, and 𝐻, respectively

(B) If 𝑝𝑥1 = 𝑝𝑥2 , then the utility maximisation problem with utility function 𝐹 has a
corner solution

(C) If income is 100 and 𝑝𝑥1 = 𝑝𝑥2 = 2, then in the utility maximisation problem
with utility function 𝐺, the sum of the optimal values of 𝑥1 and 𝑥2 is 50

(D) If income is 100, 𝑝𝑥1 = 5, and 𝑝𝑥2 = 5000, then in the utility maximisation
problem with the utility function 𝐻, the optimal value of 𝑥2 is 20

EN 23/39

JAM 2024 ECONOMICS (EN)

Q.33 The characteristics of pure public good is/are

(A) rival in consumption

(B) excludable in consumption

(C) non-rival in consumption

(D) non-excludable in consumption

EN 24/39

JAM 2024 ECONOMICS (EN)

Q.34 Consider a hypothetical economy where only apples and oranges are produced
for three years:

Apples Oranges

Year Quantity Price Quantity Price
(Kg.) (Rs. per Kg.) (Kg.) (Rs. per Kg.)
2015 10 180 5 200
2016 15 200 12 300
2017 18 250 15 350

Which of the following is/are CORRECT?

(A) Real GDP in the year 2017 (base year = 2016) is Rs. 4,250

(B) Real GDP in the year 2016 (base year = 2015) is Rs. 3,500

(C) Nominal GDP in the year 2015 is Rs. 6,600

(D) Price level, as measured by GDP deflator, increased in 2017 as compared to 2016
(base year = 2016)

EN 25/39

JAM 2024 ECONOMICS (EN)

Q.35 Let a random variable 𝑋 has mean 𝜇𝑥 and non-zero variance 𝜎𝑥2 , and another
random variable 𝑌 has mean 𝜇𝑦 and non-zero variance 𝜎𝑦2 . If the correlation
coefficient between 𝑋 and 𝑌 is 𝜌, then which of the following is/are CORRECT?

(A) |𝜌| ≤ 1

(B) The regression line of 𝑌 on 𝑋 is 𝑦 = 𝜇 + 𝜌𝜎𝑥 (𝑥 − 𝜇 )
𝑦 𝜎𝑦 𝑥

(C) The variance of 𝑋 − 𝑌 is 𝜎𝑥2 + 𝜎𝑦2 − 2𝜌𝜎𝑥 𝜎𝑦

(D) 𝜌 = 0 implies 𝑋 and 𝑌 are independent random variables

EN 26/39

JAM 2024 ECONOMICS (EN)

Q.36 Let 𝑋1 , 𝑋2 , … , 𝑋𝑛 be a random sample of size 𝑛 > 1 drawn from a probability
distribution having mean 𝜇 and non-zero variance 𝜎 2 . Then, which of the
following is/are CORRECT?

(A) The sample mean has standard deviation 𝜎
√𝑛

(B) Σ𝑛
𝑖=1 (𝑋𝑖 − 𝜇)
The probability distribution of will tend to follow standard
𝜎 √𝑛
normal distribution as 𝑛 → ∞

(C) (𝑛 − 1) 𝑆 2
will follow 𝜒 2 distribution with (𝑛 − 1) degrees of freedom, where
𝜎2
𝑆 2 is the sample variance

(D) The sample mean is always a consistent estimator of 𝜇

EN 27/39

JAM 2024 ECONOMICS (EN)

Q.37 Let 𝑀 = (
𝛼 −6
) , 𝛼 ∈ 𝑅 be a 2 × 2 matrix. If the eigenvalues of
−1 1
𝑀 are 𝛽 and 4, then which of the following is/are CORRECT?

(A) 𝛼 + 𝛽 = 1

(B) An eigenvector corresponding to 𝛽 is [2, 1]𝑇

(C) The rank of the matrix 𝑀 is 2

(D) The matrix 𝑀2 + 𝑀 is invertible

Q. 38 Let 𝑓 ∶ 𝑅 2 → 𝑅 be a function defined as

𝑥2𝑦
, if (𝑥, 𝑦) ≠ (0, 0),
𝑓(𝑥, 𝑦) = {𝑥 4 + 𝑦 2
0, if (𝑥, 𝑦) = (0, 0).

Then, which of the following is/are CORRECT?

(A) lim 𝑓(𝑥, 𝑦) = 0
(𝑥,𝑦) →(0,0)

(B) 𝑓𝑥 (0, 0) = 0

(C) 𝑓(𝑥, 𝑦) is not continuous at (0, 0)

(D) Both 𝑓𝑥 and 𝑓𝑦 do not exist at (0, 0)

EN 28/39

JAM 2024 ECONOMICS (EN)

Q.39 Which of the following is/are NOT CORRECT?

(A) Under the Reserve Bank of India Act, 1938, every scheduled bank has to keep
certain minimum cash reserves with the RBI

(B) CRR is the statutory reserve requirements to be kept by every scheduled bank
with the RBI

(C) A higher SLR increases the capacity of commercial banks to grant loans and
advances

(D) A high SLR can be considered as a tax on the banking system

EN 29/39

JAM 2024 ECONOMICS (EN)

Q.40 According to the NITI Aayog’s “National Multidimensional Poverty Index: A
Progress Review 2023”, which of the following is/are CORRECT?

(A) The rural areas in India have experienced fastest decline in percentage of
multidimensional poverty from 35.59 percent in 2015-16 to 21.28 percent
in 2019-21

(B) The incidence of poverty in urban areas in India increased from 5.27 percent
in 2015-16 to 8.65 percent in 2019-21

(C) A decline in India’s Multidimensional Poverty Index in 2019-21 is due to
improvement in all the 12 indicators

(D) At the national level, there is a decline in the intensity of poverty between
2015-16 and 2019-21

EN 30/39

JAM 2024 ECONOMICS (EN)

Section C: Q.41 – Q.50 Carry ONE mark each.

Q.41 A firm has a production function that is homogenous of degree one given by
𝑄 = 2√𝐿𝐾, where 𝑄 is quantity, 𝐿 is labour and 𝐾 is capital. The unit price of 𝐿
is Rs. 4 and the unit price of 𝐾 is Rs. 16. Assuming that there is zero fixed cost,
the total cost (long run) of producing 10 units of 𝑄 is Rs. __________ (in integer).

Q.42 Two students 𝐴 and 𝐵 are assigned to solve a problem separately.
The (conditional) probability that 𝐴 can solve the problem given that 𝐵 cannot
1
solve it, is . The (conditional) probability that 𝐵 can solve the problem given
5
3
that 𝐴 can solve the problem is . The probability that 𝐴 can solve the problem
5
1
is .
10

Then, the probability that 𝐵 can solve the problem is __________ (rounded off
to one decimal place).

Q.43 Suppose the cash reserve ratio is 5 percent in a country. Assume that commercial
banks keep zero excess reserve and the cash-to-deposit ratio is 5 percent.
To increase the money supply by Rs. 10,500 crores, the central bank of the
country should inject Rs. __________ crores (in integer).

EN 31/39

JAM 2024 ECONOMICS (EN)

Q.44 Suppose an Indian company borrowed 300 dollars from a foreign bank at the
beginning of the year and repaid it in dollars along with the agreed interest rate
of 12 percent per annum. At the time of borrowing, the exchange rate was Rs. 70
per dollar. Assuming zero inflation rate in both the countries, the real cost of
borrowing will be zero if the exchange rate is Rs. __________ per dollar at the
time of repayment (rounded off to one decimal place).

Q.45 There are 32 students in a class. Three courses namely English, Hindi and
Mathematics are offered to them. Each student must register for at least one
course. If 16 students take English, 8 students take Hindi, 18 students take
Mathematics, 4 students take both English and Hindi, 5 students take both Hindi
and Mathematics, and 5 students take both English and Mathematics, then the
number of students who take Mathematics only is __________ (in integer).

𝑥
Q.46 −
Let an inverse demand function for a commodity be 𝑝 = 𝑒 2 , where 𝑥 is the

quantity and 𝑝 is the price. Then, at 𝑝 = 0.5, the consumer surplus is equal
to __________ (rounded off to two decimal places).

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JAM 2024 ECONOMICS (EN)

Q.47 The linear system of equations

𝑥 + 𝑦 = 3,

𝑥 + (𝑘 2 − 8)𝑦 = 𝑘, 𝑘 ∈ 𝑅

has no solution for 𝑘 = __________ (in integer).

Q.48 A manufacturer producing pens has the following information regarding the cost
of production of pens:

Output (𝑄) 1 2 3

Total Costs (𝑇𝐶) 4 13 32

If the total cost function is of the form 𝑇𝐶(𝑄) = 𝑎𝑄 2 + 𝑏𝑄 + 𝑐 where 𝑎, 𝑏, and
𝑐 are constants, then the value of 𝑇𝐶(𝑄) at 𝑄 = 4 is __________ (in integer).

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JAM 2024 ECONOMICS (EN)

Q.49 Consider the information given in the table below:

Number of Labour Force
Unemployment
Year unemployed Participation Rate
Rate (in percent)
(in millions) (in percent)

2010 15 30 70

2020 20 50 80

The percentage change in working-age population from 2010 to 2020
is __________ (rounded off to two decimal places).

Q.50 Consider the following information:

Consumption (𝐶) = 250 + 0.25𝑌𝑑 , where 𝑌𝑑 is disposable income

Autonomous Investment (𝐼0 ) = 100

Government Expenditure (𝐺0 ) = 50

Income tax rate (𝑡) = 20 percent

The equilibrium level of consumption in the economy is __________ (in integer).

EN 34/39

JAM 2024 ECONOMICS (EN)

Section C: Q.51 – Q.60 Carry TWO marks each.

Q.51 An individual owns a mobile phone, currently valued at Rs. 40,000. The current
wealth of the individual is Rs. 2,00,000 (including the value of the mobile phone).
According to reports, there is a 20 percent chance of mobile phone theft and an
actuarially fair insurance policy is available to insure the loss of the mobile phone
against a theft. The individual’s von-Neumann-Morgenstern utility of wealth
function is given by 𝑈(𝑊) = √𝑊, where 𝑊 is the wealth. Then, the maximum
willingness to pay for such an actuarially fair insurance policy is Rs. __________
(rounded off to nearest integer).

Q.52 Consider the following AK model where the production function is given by

𝑌 = 𝐴𝐾

where 𝑌 is output, 𝐾 is capital, and 𝐴 is a constant that reflects the level of
technology. Suppose there is zero technological progress in the economy and
𝐴 = 0.50. In the economy, the savings rate equals 0.60 and the depreciation rate
for the capital stock equals 0.05. The population growth rate equals zero and the
size of the labour force is normalised to 1. Based on the AK model, the steady
state growth rate of output per capita in the economy equals __________ percent
(in integer).

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JAM 2024 ECONOMICS (EN)

Q.53 A regression equation 𝑌 = −2.5 + 2𝑋 is estimated using the following data:

𝑌 2 5 9 14
𝑋 2 4 6 8

The coefficient of determination is __________ (rounded off to two decimal
places).

Q.54 A consumer’s utility function is given by:

𝑢(𝑥1 , 𝑥2 ) = (2𝑥1 − 1)0.25 (𝑥2 − 4)0.75

If the consumer has a budget of 73 and the unit prices of 𝑥1 and 𝑥2 are given by
2 and 1, respectively, then the value of (𝑥1 + 𝑥2 ) is __________ (rounded off
to two decimal places).

Q.55 An industry has 6 firms in Cournot competition. Each of the 6 firms has zero
fixed costs, and a constant marginal cost equal to 20. The product is homogenous
and the industry inverse demand function is given by 𝑃 = 230 − 𝑄, where 𝑃 is
the market price and 𝑄 is the industry output (sum of outputs of the 6 firms).
The market price under Cournot-Nash equilibrium is equal to __________ (in
integer).

EN 36/39

JAM 2024 ECONOMICS (EN)

Q.56 Let the value of a random sample drawn from a normal distribution with mean 5
and unknown standard deviation 𝜎 be 4.8, 4.5, 5.1, 5.2, 5.3, 5.5. Then, the
maximum likelihood estimate of 𝜎 2 is __________ (rounded off to two decimal
places).

Q.57 An economy produces a consumption good and also has a research sector which
produces new ideas. Time is discrete and indexed by 𝑡 = 0, 1, 2, …

The production function for the consumption good is given by

𝑌𝑡 = 𝐴𝑡 𝐿𝑦𝑡

where, at time 𝑡, 𝑌𝑡 is the amount of consumption good produced, 𝐴𝑡 is the stock
of existing knowledge, and 𝐿𝑦𝑡 is the amount of labour devoted to production of
consumption good. It is known that 𝐴0 = 1.

The production function for new ideas is given by

1
𝐴𝑡+1 − 𝐴𝑡 = 𝐴𝐿
250 𝑡 𝑎𝑡

where 𝐿𝑎𝑡 is the amount of labour devoted to production of new ideas at time 𝑡.
Suppose that for all 𝑡, 𝐿𝑎𝑡 = 10 and 𝐿𝑦𝑡 = 90. Then, the growth rate of the
consumption good (𝑌𝑡 ) at 𝑡 = 50 is __________ percent (in integer).

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JAM 2024 ECONOMICS (EN)

Q.58 Consider a closed economy IS-LM model. The goods and the money market
equations are respectively given as follows:

𝑌 = 90 + 0.8𝑌𝑑 − 100𝑖 + 𝐺

𝑀𝑠 = 750 + 0.2𝑌 − 260𝑖

where, 𝑌 = national income; 𝑌𝑑 = disposable income; 𝑇 = total tax given by
𝑇 = 5 + 0.2𝑌; 𝑖 = interest rate; 𝐺 = government expenditure = 300;
𝑀𝑠 = constant money supply = 950.

The value of 𝑇 at equilibrium 𝑌 is __________ (rounded off to the nearest
integer).

Q.59 The supply curve is given as 𝑝 = 10 + 𝑥 + 0.1𝑥 2 , where 𝑝 is the market price
and 𝑥 is the quantity of goods supplied. The change in the producer surplus due
to an increase in market price from 30 to 70 is __________ (rounded off to nearest
integer).

EN 38/39

JAM 2024 ECONOMICS (EN)

Q.60 There are two goods 𝑋 and 𝑌 and there are two consumers 𝐴 and 𝐵 in a pure
exchange economy. 𝐴 and 𝐵 have Cobb-Douglas utility functions of the form
𝑈𝐴 = 2𝑋 0.4 𝑌 0.6 and 𝑈𝐵 = 𝑋 0.3 𝑌 0.7 , respectively. Initially, 𝐴 is endowed with 50
units of good 𝑋 and 20 units of good 𝑌. Similarly, 𝐵 is endowed with 50 units of
good 𝑋 and 20 units of good 𝑌. If the unit price of good 𝑌 is normalised to 1, then
the equilibrium unit price for good 𝑋 is __________ (rounded off to two decimal
places).

EN 39/39

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