WB SET 2020 Question Paper 2 Economics

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(Write Roll Number from left side
exactly as in the Admit Card) Signature of Invigilator
Question Booklet Series X
PAPER–II Question Booklet No.
Subject Code : 07 (Identical with OMR
Answer Sheet Number)

ECONOMICS
Time : 2 Hours Maximum Marks: 200

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3. This paper consists of One hundred (100) multiple-choice type questions. All the questions are compulsory. Each
question carries two marks.
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15783 [ Please Turn Over ]

X–3 07–II

ECONOMICS
PAPER II
1. Marginal product of CES production function is 5. The spirit of Engel’s Law is that with an increase
always in family income:
(A) negative (A) Proportion of income spent on luxuries
(B) cubic decline.
(C) positive (B) The savings rate increases.
(D) square (C) The proportion of income spent on food
declines.
(D) Expenditure on food declines.

2. Horizontal merger
(A) is a merger across firms that produces same
type of products.
6. If the CD production function is homogeneous of
(B) is a merger across firms that produces degree one, then the marginal product of labour
intermediate and final products.
(A) will depend only on input ratio.
(C) is a merger across firms that produces both
(B) will be homogenous of degree (–1).
homogenous and non-homogenous products.
(C) will depend on absolute quantity of labour
(D) is a merger across firms that produces only
only.
intermediate products.
(D) will be a rectangular hyperbola.

3. If Marginal Cost (MC) = αq + β q 2 − γq3 , then the
7. Match List-I with List-II
Average Cost (AC) is
List-I List-II
q q3 q4 (a) Oligopoly (i) Identical price
(A) α + β − γ
2 3 4 (b) Monopoly (ii) Price discrimination
q2 q3 q4 (c) Bilateral monopoly (iii) Collective bargaining
(B) α +β − γ
2 3 4 (d) Perfect competition (iv) Sales maximisation
q q2 q3 Codes:
(C) α + β − γ + AFC
2 3 4 (a) (b) (c) (d)
q q2 q4 (A) (iv) (ii) (iii) (i)
(D) α + β − γ + AFC
2 3 4 (B) (i) (ii) (iii) (iv)
(C) (iv) (iii) (ii) (i)
(D) (ii) (iii) (iv) (i)

4. In the uneconomic region of production
(A) marginal productivity of one factor is
negative.
(B) marginal productivities of both factors are 8. A given total outlay on factor inputs at given
positive. factor prices is reflected by
(C) marginal productivities of both factors are (A) Iso-revenue curve.
zero. (B) Iso-cost curve.
(D) marginal productivities of both factors are (C) Isoquant.
negative. (D) Production possibility curve.

07–II X–4
9. Match items of List-II with the items of List-I. 13. Social welfare is
List-I List-II (i) equal to dead weight loss.
(a) MRSxy = 0 (i) Indifference curve is (ii) maximum under perfect competition.
concave to the origin (iii) what the consumer is willing to pay minus
(b) MRSxy is constant but (ii) Indifference curve is the cost of production.
not zero right angled (iv) equal to consumer’s surplus plus producer’s
(c) MRSxy is decreasing (iii) Indifference curve is surplus.
straight line with (A) Only (i) is true
negative slope
(B) Only (i) and (ii) are true
(d) MRSxy is increasing (iv) Indifference curve is
convex to the origin (C) (ii), (iii) and (iv) are true
Codes: (D) Only (iii) is true
(a) (b) (c) (d)
(A) (ii) (iii) (iv) (i)
(B) (i) (iii) (ii) (iv) 14. In case income elasticity of demand for good Y be
(C) (i) (iv) (ii) (iii) zero, the income-consumption curve for good X will be
(D) (iv) (iii) (i) (ii)
(A) parallel to horizontal axis.
(B) parallel to vertical axis.
(C) positively sloped straight line.
10. What describes the graphical relationship between (D) negatively sloped straight line.
average product (AP) and marginal product (MP)?
(A) AP cuts MP from above, at the maximum
point of MP.
15. A risk-return trade-off function
(B) AP cuts MP from below, at the maximum
point of MP. (A) slopes upward for a risk averse decision
(C) MP cuts AP from above, at the maximum maker.
point of AP. (B) slopes downwards for a risk averse decision
(D) MP cuts AP from below, at the maximum maker.
point of AP. (C) slopes upward for a risk lover.
(D) slopes upward for a plunger.

11. For Giffen good
16. Information asymmetry exists when
(A) income elasticity of demand is positive and
price effect is positive. (A) both parties are equally informed.
(B) income elasticity of demand is negative and (B) both parties are equally knowledgeable.
price effect is negative. (C) one party has more information than the
(C) income elasticity of demand is negative and other.
price effect is positive. (D) one party does not take interest in the subject.
(D) income elasticity of demand is positive and
price effect is negative.

17. Under perfect competition, if the total cost of any
firm is C = 0·3x3 – 3x2 + 20x + 15, then find the supply of
12. Limit Pricing is also termed as the firm when P < 12·5?
(A) entry preventive pricing. (A) 0
(B) entry encouraging pricing. (B) 0·9x2 – 6x + 20
(C) competition enhancing pricing. (C) 12·5
(D) maximum profit generating pricing. (D) 1·5

X–5 07–II
18. The purchase or sale of a commodity at the present 22. According to Friedman, a key determinant of
price with the objective of sale or purchase at some future money is not
date at a favourable price is known as (A) aggregate wealth.
(A) Hedging (B) precautionnary motive.
(B) Speculation (C) relative rates of return obtainable on different
(C) Market intelligence forms of assets.
(D) Retailing (D) physical non-human capital goods and
human capital.

23. Augmented Phillips Curve makes allowance for
the
(A) effects of price expectations on money wage
19. In a market economy, the market mechanism can reductions.
achieve all the following except (B) effects of price expectations on real wage
(A) signaling changes in consumer tastes. increases.
(B) causing supply to respond to changes in (C) effects of price expectations on money wage
demand. increases.
(C) eliminating excess supply and demand. (D) effects of price expectations on real wage
(D) ensuring a fair distribution of all types of reductions.
goods.
24. Based on Mankiw, Romer and Weil (1992), with
conditional convergence, holding fertility rates, education
and government spending as a share of GDP constant
(A) income per capita is the same regardless of
poor or rich countries.
20. Interaction of the multiplier and accelerator is (B) income per capita in poor countries grows
known as faster than in rich countries.
(A) investment multiplier (C) income per capita in rich countries grows
(B) employment multiplier faster than in poor countries.
(C) super multiplier (D) income per capita in poor countries grows
(D) dynamic multiplier conditional upon foreign aid.

25. Which one of the following is not a behavioural
ratio in the H-theory of money supply?
(A) Reserve-deposit ratio
(B) Interest-deposit ratio
21. If C = a + b (Y − T ), where T = ty and I = I , (C) Time-deposit ratio
(D) Currency-deposit ratio
then investment multiplier is
1
(A) 26. ‘Crowding out effect’ implies
b (1 − t )
(A) too much private spending and investment is
1 not desirable.
(B)
1 − b (1 − t )
(B) too much public spending leads to recession.
1 (C) increased public sector spending encourages
(C)
1 − bt private sector spending.
1 (D) increased public sector spending replaces,
(D)
1 − b (1 + t ) or drives down, private sector spending.

07–II X–6
27. Need for a stronger banking system for which 31. Consider the following statements:
mergers of the PSBs and the financial institutions were
(i) Absolute income hypothesis is associated
suggested, were recommended by
with Keynes.
(A) Narasimham Committee II
(ii) S = –20 + 0·4y and C = 20 + 0·6y yield the
(B) Chelliah Committee same investment multiplier.
(C) Sarkaria Commission (iii) Investment multiplier rises whenever
income tax is introduced in the system.
(D) Narasimham Committee I
(iv) Bond price and interest rates are directly
related.
Which of the statement (s) is/are correct?

28. Tobin Tax is a tax on (A) (i) alone

(A) transactions in the share market. (B) (ii) and (iii)

(B) transactions in the commodity market. (C) (iii) and (iv)

(C) transactions in the money market. (D) (i) and (ii)

(D) transactions in the foreign exchange market.

29. Assertion (A) : Money is a link between the 32. A ‘fair bet’ is one
present and the future. (A) which increases expected income.
Reason (R) : Money is a store of value. (B) which reduces expected income of the
opponent.
(A) Both (A) and (R) are true and (R) is the correct
explanation of (A). (C) which leaves expected income unchanged.
(B) Both (A) and (R) are true and (R) is not the (D) which ensures victory.
correct explanation of (A).
(C) (A) is true and (R) is false.
(D) (A) is false and (R) is true.

33. Choose the correct answer :
The short-run aggregate supply curve is upward
30. Choose the correct answer :
sloping because
The aggregate demand curve is downward
(A) nominal wages are sticky in the short run,
sloping because of
i.e. higher aggregate price level leads to
(A) wealth effect and interest rate effect of a higher profit per unit of output and increased
change in aggregate price level. aggregate output in the short run.
(B) only wealth effect of a change in aggregate (B) elasticity of wages with respect to price
price level. exceeds unity.
(C) only interest rate effect of a change in (C) elasticity of wages with respect to price is
aggregate price level. equal to unity.
(D) equal wealth effect and interest rate effect of (D) elasticity of demand with respect to price is
a change in aggregate price level. equal to unity.

X–7 07–II
34. Markets in ‘State-contingent commodities’ refer 37. The size of the money multiplier is larger in the
to markets Keynesian IS-LM model, if
(A) where goods are distinguished by their
(A) the more interest inelastic is the demand for
physical characteristics.
money.
(B) where goods are distinguished by the state
of the world in which they will be consumed. (B) the more interest elastic is the demand for
investment goods.
(C) where goods are sold at the command of the
government. (C) the less interest elastic is the demand for
investment goods.
(D) both (A) and (B)
(D) the demand for investment goods is perfectly
inelastic.

38. If a card is chosen from a standard pack of cards,
what is the probability of getting a three or a seven?

35. Choose the correct statement— (A) 4
52
(A) In the vertical portion of LM curve, fiscal 1
policy is highly effective while monetary (B) 26
policy is not effective.
8
(B) In the vertical portion of LM curve, fiscal (C)
52
policy is ineffective, while monetary policy
is highly effective. 1
(D)
169
(C) In the horizonal portion of LM curve, fiscal
policy and monetary policy both are
effective.
(D) In the horizonal portion of LM curve, 39. By nature, Quota sampling, Judgement sampling
neither fiscal policy, nor monetary policy is
and Convenience sampling are classified as
effective.
(A) random sampling.
(B) non-random sampling.

(C) direct sampling.

(D) indirect sampling.

36. When a linear consumption funciton shifts
40. Regression slope coefficient of the equation
downwards parallely, the investment multiplier will
Yi = α + βX i is independent of changes in
(A) fall.
(A) origin but not of scale.
(B) rise marginally.
(B) both origin and scale.
(C) remain as before. (C) scale but not of origin.
(D) become double. (D) neither origin, nor scale.

07–II X–8
41. Choose the correct statement: 44. Choose the correct answer :
For a linear regression model Y = α + βX + u In a linear regression model the Durbin-Watson
the OLS estimators will be BLUE implies test cannot be used if
(A) the OLS estimators will not be effecient. (A) the model contains lagged values of the
explanatory variables.
(B) the OLS estimators will be unbiased and
have minumum variance among the class of (B) the model contains more than one
all unbiased estimator. explanatory variable.
(C) the OLS estimators will be unbiased but its (C) the model contains the disturbance term.
variance will not be minimum. (D) the model contains the lagged value of the
(D) the variance of OLS estimator will be current dependent variable.
minimum even if it is not unbiased.

42. Choose the correct answer:
45. Choose the correct answer :
The existence of multicollinearity for a linear For a simultaneous equation model, the reduced
regression model implies
form of the model
(A) the disturbance terms of the model are
(A) does not contain the current value of
correlated.
endogenous variable as explanatory variable
(B) there is significant correlation between the (B) does contain the current value of the
explanatory variables. endogenous variable as explanatory variable.
(C) there is significant correlation between the (C) does not contain lagged values of the current
dependent and the independent variables.
dependent variables as explanatory variables.
(D) there is no significant correlation between
(D) does not contain lagged values of current
the explanatory variables.
exogenous variables as explanatory
variables.

43. Choose the correct answer:
The existence of autocorrelation for a linear
regression model implies
46. For a simultaneous equation system, which of the
(A) the disturbance terms of the model are
following statement is incorrect?
correlated over time.
(A) If an equation is exactly identified then ILS
(B) the explanatory variables of the model are and 2SLS would give the same result.
correlated over time.
(B) ILS can be applied to an over identified
(C) there is correlation between dependent equation.
variable and the explanatory variables. (C) 2SLS can be applied to an over identified
(D) there is correlation between the dependent equation.
variable and the explanatory variables over (D) ILS cannot be applied to an over identified
time. system.

X–9 07–II
47. Choose the correct answer: 50. If TC = 5+3q then

Consider a time series process yt = yt −1 + xt (i) AFC is rectangular hyperbola.
Where xt is a stationary ARMA (q, p). (ii) AC is decreasing function of output.

Then yt is an (iii) AVC is fixed.
5
(A) integrated series of order 1 (iv) is rectangular hyperbola.
q
(B) stationary series (A) only (i) is correct
(C) integrated series of order 2 (B) only (i), (iii) and (iv) are correct.
(D) MA series (C) only (i), (ii) and (iii) are correct.
(D) All are correct

48. Choose the correct answer:

Consider a time series process yt − yt −1 = α + εt
51. Following information are given:
Where εt is a white noise process and also suppose
3
α ≠ 0 . Such a process is known as C = 20 + Y and Y = 80
4
(A) random walk process with drift. What is the value of APC?
(B) random walk process without drift. (A) 0
(C) ARMA process with drift. (B) 1
(D) ARMA process without drift. (C) 0·5
(D) 0·075

49. Choose the correct answer:
White noise process is a random process of random
variable 52. In case of two variables X and Y, given that
Covariance ( X,Y ) =0·40 and Var (X)=4.
(A) that are uncorrelated, have mean zero and
finite variance. Then for what value of variance of Y, correlation

(B) that are correlated, have mean zero and between X and Y will be 0·50 and β4 x = 0 ⋅ 10 ?
finite variance.
(A) 4
(C) that are uncorrelated, have constant non-
(B) 2
zero mean and finite variance.
(C) 16
(D) that are correlated, have constant non zero
mean and finite variance. (D) 0·4

07–II X–10
53. In the input-output model if the input coefficient 56. When a country exports a product at a price below
its cost of production, then it is said to be
⎡ 0 ⋅1 0 ⋅ 8⎤
matrix be ⎢ ⎥ then (A) Price skimming
⎢⎣0 ⋅ 7 0 ⋅ 3⎥⎦
(B) Dumping
(i) Hawkins-Simon condition is satisfied. (C) Discriminating
(ii) feasible output solution is possible. (D) Excessive invoicing
(iii) Hawkins-Simon condition is not satisfied.
(iv) final demand vector would be solvable. 57. Most favoured nation clause means
(A) only (i) correct. (A) some nations should be given more favour.
(B) only (i) and (ii) are correct. (B) advantage granted by one member country
(of WTO) to another member country must
(C) only (iii) is satisfied.
be granted to all other member countries of
(D) only (i) and (iv) are correct. WTO.
(C) some countries are listed as most favoured
members and they get some special
treatment.
54. Choose the correct answer : (D) All the above.
Heckscher-Ohlin model shows how differences
in factor endowment determine comparative advantage :
goods differ in factor intensity and 58. Trade creation refers to a situation where
(A) countries tend to export goods that are (A) imposition of trade barriers between
intensive in the factors they have in members of the trading bloc enables various
abundance. products to be pruchased at lower prices,
thereby stimulating intra-regional trade.
(B) countries tend to import goods that are
intensive in the factors they have in (B) removal of trade barriers between members
abundance. of the trading bloc enables various products
to be purchased at lower prices stimulating
(C) countries tend to consume goods that are intra-regional trade.
intensive in the factors they have in
abundance. (C) removal of trade barriers between members
of the trading bloc enables various products
(D) countries tend to produce goods that are to be purchased at higher prices thereby
intensive in the factors they have in stimulating intra-regional trade.
abundance.
(D) imposition of trade barriers between
members of the trading bloc enables various
products to be purchased at lower prices,
thereby dampening intra-regional trade.
55. Stolper-Samuelson theorem establishes a relation
between
(A) prices of factors and relative factor awards. 59. According to equal sacrifice principle, total
sacrifice of people in payment of tax is minimised under
(B) relative prices of output and relative factor
(A) equal proportional sacrifice.
rewards.
(B) equal absolute sacrifice.
(C) relative prices of output and absolute factor
rewards. (C) equal relative sacrifice.
(D) prices of factors and factor rewards. (D) equal marginal sacrifice.

X–11 07–II
60. Which of the following is not a test of 64. Which of the following is not a quasi-public
heteroscedasticity? good?
(A) Gleszer test (i) National defence
(B) White’s test (ii) An automobile
(C) Breusch-Pagan test (iii) Libraries
(D) Breusch-Godfrey test (iv) Fire protection

Select the correct code:

(A) only (ii)
(B) (ii) and (iv) both
61. Fiscal Deficit means– (C) (ii), (iii) and (iv)
(A) Public expenditure debts from sources other (D) only (iii)
than RBI.
(B) Public capital expenditure surplus of revenue
account.
(C) Government expenditure revenue receipts.
(D) Public expenditure tax and non-tax revenue
receipts. 65. An external benefit is most likely to arise when
(A) firms are able to reduce their costs of
production by undertaking research and
development.
(B) a reduction in the tax on profits increases the
amount of money firms have available for
62. Lindahl tax is a form of taxation in which investment.
(A) individuals pay for public goods according (C) the government subsidizes commuter rail
to their marginal benefits. services in order to reduce road congestion
(B) individuals pay for private goods according (D) a firm is able to dispose off waste products
to their marginal benefits. into rivers free of charge.
(C) individuals pay for public goods according
to their willingness to pay.
(D) individuals pay for public goods according
to their average utility.

66. In the presence of a stagnant economy a
government should
(A) spend more, tax less and/or pursue a
contractionary monetary policy.
63. In which of the following tax, the burden cannot
be shifted by the taxpayer to others? (B) spend less, tax less and/or pursue an
expansionary monetary policy.
(A) Sales Tax
(C) spend more, tax less and/or pursue an
(B) Excise duty expansionary monetary policy.
(C) Customs duty (D) tax more, spend less and/or pursue an
(D) Inheritance tax expansionary monetary policy.

07–II X–12
67. Under IPO method 71. Stagflation represents a situation where
(A) shares of public sector undertakings are sold (A) rate of growth is faster than the rate of rise in
to retail investors and institutions. prices.
(B) shares of private sector undertakings are (B) rate of economic growth is slower than the
sold to retail investors and institutions. rate of rise in prices.
(C) shares of retail undertakings are sold to (C) economic growth is indifferent to changes
public sector units. in prices.
(D) shares of private sector are sold to public (D) both national income and prices are
sector. declining.

68. Which of the following is not related to the
concept of financial inclusion? 72. According to the Capability Approach to
development
(A) Extension of financial services to unbanked
areas. (A) human beings are means to an end and the
end is income generation.
(B) Reaching out to the people who are still
deprived of banking services. (B) income is a means to an end in human
welfare.
(C) Provide access to usuful and affordable
financial products and services that meet (C) human beings and income are both means
the people’s needs. and the end is utility maximization.

(D) Enhance the profitability of the financial (D) higher price leads to rise in income and
institutions. entitlement to reach the goal.

69. The banks are required to maintain a certain ratio
between their cash in hand and total assets, which is 73. Who among the following advocated the ‘‘Basic
called Needs Approach’’ (BNA) to development?
(A) Central Liquidity Reserve (A) A. K. Sen
(B) Statutory Liquidity Ratio (B) D. Romer
(C) Statutory Bank Ratio (C) S. Kuznets
(D) Central Bank Reserve (D) Paul Streeten

70. Fictional Unemployment is defined as
(A) having no jobs when workers are willing to
74. Who among the following developed the Theory
work.
of Circular Causation?
(B) short term movement of workers between
(A) G. Myrdal
jobs.
(B) R. Nurkse
(C) having no jobs due to changing seasons in
agriculture. (C) J. Robinson
(D) unemployment due to business cycles. (D) J. R. Hicks

X–13 07–II
75. Which of the following variables are used to 79. “Knife-edge” instability in Harrod Model arises
measure the fertility rate of a population? due to the fact that

(i) Women in the reproductive age group (A) savings ratio, output capital ratio and natural
15-49. rate of growth are determined by three
distinct factors.
(ii) Females in the total population.
(B) savings ratio and output capital ratio are
(iii) Number of children below 15 years of age. determined by the same factor, but mutual
(iv) Number of girls below fifteen years of age. rate of growth is determined by a different
set of factors.
(A) (i) and (ii)
(C) entrepreneurs contribute to the constancy of
(B) (i) and (iii) savings ratio but not to the population
growth.
(C) (i) and (iv)
(D) all the savings ratio, output capital ratio and
(D) (ii) and (iv)
natural rate of growth are jointly determined.

76. Perfectly elastic supplies of labour play a crucial
role in
80. Choose the correct statement:
(A) Malthus’ model of growth.
Considering two inputs capital and labour, Solow
(B) Kuznets’ model of growth. residual which is taken as a measure of the rate of
(C) The Prebisch hypothesis. technical progress refers to
(D) Lewis model of growth. (A) growth in output which cannot be explained
by growth in capital and labour.
(B) growth in output which cannot be explained
by growth in labour only.

77. The ‘Technological Dualism’ in underdeveloped (C) growth in output which cannot be explained
countries could be broken through by growth in capital only.

(A) a gradualist approach of development. (D) growth in output which cannot be explained
by growth in demand.
(B) family planning.
(C) planning for increased productivity in rural
sector.
(D) focusing on IT sector.
81. Indicate the correct statement:
In case of Sweezy duopoly model
(A) the discontinuity in MR curves does not
78. The Rostow’s model postulates that economic
depend on elasticity of demand curves.
growth occurs in five basic stages of development.
Which among the following is not one of those stages? (B) demand curves are Iso-elastic.
(A) Traditional society (C) increasing difference between elasticity of
demand curves raises the discontinuity in
(B) The Pre-conditions to take-off
MR curves.
(C) Entrepreneurial growth
(D) MR curve is discontinuous because of
(D) High mass consumption consumption rigidity.

07–II X–14
82. Match the following: 85. Which of the following is a measure of market
performance?
List-I List-II
(A) Product discrimination
(a) Group equilibrium (i) Hicks-Hansen
(B) H.H. index
(b) IS-LM theory (ii) Chamberlin
(C) Concentration ratio
(c) Quasi-Rent (iii) Walras
(D) Rate of return
(d) General equilibrium (iv) Marshall
Codes:
(a) (b) (c) (d)
(A) (i) (ii) (iv) (iii) 86. ‘Warm glow’ refers to a situation faced while
asking respondents about their willingness to pay for an
(B) (ii) (i) (iv) (iii) environmental service; this implies
(C) (iv) (iii) (i) (ii)
(A) the question makes the respondent feel warm.
(D) (i) (ii) (iii) (iv)
(B) that the respondents state high willingness
to pay regardless of the impact of such
statement, just to experience the joy of being
treated as a person valuing environment.
(C) that the respondents state high willingness
83. Answer which one is most appropriate:
to pay so that others are compelled to pay
Sustainable economic development depends upon that price.
(A) investment in both natural and man-made (D) that the respondents state low willingness
capital but not on savings. to pay to protect themselves from paying
high prices.
(B) both savings and investment with
maintenance of a minimum level of critical
natural resources.
(C) savings and investment without any regard 87. Which of the following statements is not true?
to the maintenance of natural capital.
(A) Contingent valuation method is applied in a
(D) neither savings, nor investment but only hypothetical market situation.
maintenance of natural resources.
(B) To estimate the value of environmental
quality with hedonic pricing, actual price in
which houses are sold is required.
(C) Multicollinearity may be encountered in
contingent valuation method.
84. According to Prof. Sen
(D) Starting point bias is associated with
(A) Labour intensive technology should be contingent valuation method.
employed for maximising production while
capital intensive technology should be
employed in case of maximising investment.
(B) A labour surplus country should employ 88. Which of the following is not related to the Travel
labour intensive technology. Cost method?
(C) Labour intensive technology should be (A) Zonal approach
adopted for putting an end to disguised
unemployment. (B) Individual approach

(D) Developing countries should always adopt (C) Utility approach
labour intensive technology. (D) Random utility approach

X–15 07–II
89. Choose the best possible combination of List I 92. In the IPAT expression propounded by Prof.
with List II. Ehrilch
List-I List-II (A) I ⇒ Impact, P ⇒ Population, A ⇒ Affluence,
(a) Contingent valuation (i) Market price T ⇒ Technology
(b) Valuation of (ii) Hedonic pricing (B) I ⇒ Impact, P ⇒ Price, A ⇒ Affluence,
a monument T ⇒ Trade
(c) Rental value of a park (iii) Travel cost (C) A ⇒ Annuity, P ⇒ Price, I ⇒ Investment,
(d) Pricing of soap (iv) Hypothetical market T ⇒ Technology
Codes: (D) A ⇒ Assets, P ⇒ Population, I ⇒ Impact,
(a) (b) (c) (d) T ⇒ Trade
(A) (iv) (iii) (ii) (i)
(B) (i) (ii) (iii) (iv)
(C) (i) (iii) (iv) (ii) 93. As per the sectoral distribution of national income
(D) (iv) (i) (ii) (iii) in India, the percentage share of agriculture is
(A) 70-80 per cent

90. Go through the following statements: (B) 40-50 per cent

(i) In case of negative externality socially (C) 50-60 per cent
optimum output of a commodity must be (D) less than 20 per cent
lower than the private optimum output.
(ii) Coase’s theorem states that a costless
negotiation can bring about a solution to
externality. 94. The Minimum Support Price (MSP) for food
grains was introduced in India in the year
Choose the correct explanation given below.
(A) 1954
(A) (i) is correct but (ii) is incorrect.
(B) 1974
(B) (i) is correct and statement (ii) is applicable
to (i). (C) 1964
(C) (ii) is correct but it has no connection with (D) 1994
(i).
(D) (ii) is correct but (i) is not always correct.
95. Which of the following is a function of NABARD?

91. Which one of the following is an example of (i) Monitoring flow of ground level credit to
market failure? agriculture.

(A) Prices do not reflect the full social costs of (ii) Credit planning and monitoring.
production. (iii) Formulation of operational guidelines for
(B) Prices rise so that consumers cannot afford rural financial institutions.
to buy all the goods that they used to Choose the correct code:
purchase.
(A) only (i) is correct.
(C) Demand falls so that firms have to make
(B) (i) and (ii) are correct but (iii) is incorrect.
workers redundant.
(C) all (i), (ii) and (iii) are correct.
(D) A firm goes out of business because it cannot
find a market for its products. (D) (ii) is correct and others are incorrect.

07–II X–16
96. Which of the following statements is not true 98. Which of the following are the causes of low
about the National Food Security Act 2013? productivity in Indian agriculture?

(A) It is also known as the Right to Food Act. (i) Rural industrialisation
(ii) Land ceilings
(B) It was notified in September 2013.
(iii) Sub-division and fragmentation of land
(C) It ensures enhanced production of food holdings
grains.
(iv) Rainfed areas
(D) It ensures food and nutritional security in
(A) (i) and (iii)
human life cycle approach.
(B) (iii) and (iv)
(C) (i), (iii) and (iv)
(D) (ii) and (iv)

97. Consider the following statements about the idea
of ‘inclusive growth’: 99. Food based security acts by Government of India
involve the following three schemes; Choose the correct
(i) The idea of ‘inclusive growth’ entered into option from below:
the domain of planning with the eleventh
plan. (A) PDS, ICDS and MDM
(ii) This is not only about economics but also (B) MDM, MGNREGS and NRLM
about ‘social’ inclusion. (C) ICDS, PDS and IRDP
(iii) The main idea behind inclusive growth is to (D) PMRY, RLEGP and PDS
include SCs, STs, OBCs, minorities and
women in the country’s development
process.
(iv) The 3rd Generation of Economic Reforms
runs parallel to the idea of inclusive growth. 100. The Goods and Services Taxes aimed at integrating
the
Select the correct statement using the code below:
(A) indirect taxes of Centre and the states.
(A) (i), (ii) and (iii) (B) direct taxes of Centre and the states.
(B) (ii), (iii) and (iv) (C) direct taxes of the Centre and indirect taxes
of the states.
(C) (i), (iii) and (iv)
(D) indirect taxes of the Centre and direct taxes
(D) (i), (ii), (iii) and (iv) of Centre.

X–17 07–II

ROUGH WORK

07–II X–18

ROUGH WORK

X–19 07–II

ROUGH WORK

07–II X–20

ROUGH WORK