Mec

No. of Printed Pages : 12 MEC-001

MASTER OF ARTS (Economics)

Term-End Examination December, 2011

MEC-001 : MICRO ECONOMIC ANALYSIS

Time : 3 hours Maximum Marks : 100 Note : Attempt questions from each section as per instructions

given under each section .

SECTION - A Answer any two questions from this section. 2x20 =40

1. An economy comprises two consumers, 1 and 2, with two consumption goods bi-cycles (b) and wheat (w). Both consumers have the same utility function (b, w) = bw. Bi-cycles and wheat are produced by two firms which use only labour according to the production functions.

CD b = \r/T, and w = 0.5 \Ft, Both firms are owned by consumer 1, and

CD consumer 2 owns 200 units of labour. Cr.) (a) Find the production possibility frontier for

this economy. (b) Find the competitive equilibrium. (c) Find competitive equilibrium if every

consumer owns 100 units of labour and owns one firm.

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1 P.T.O.

(d) Find the pareto efficient allocations for this economy.

2. A consumer's preferences over a single good x and other goods y is represented by the utility function

p. (x, y) = log (x) + y. If the price of x= p and price of y =1, and income m > 1,

(a) Derive the Marshallian demand for x and y.

(b) Derive the indirect utility function. (c) Use the Slutsky equation to decompose the

effect of an own price change on the demand • for x into an income and substitution effect.

3. You are asked to solve a public good problem with 2 agents. Agent i has utility function a, log (g 1 + g2) + x, where g, is the amount of the public good contributed by agent i and xi = amount of private consumption of agent i. The budget constraint of agent i is x, + g i = w i

where w, is the initial endowment of agent i. Assuming w i > a i for each agent, (a) compute the Pareto — optimal level of public

good provision for this economy. (b) Describe the voluntary contribution

equilibria for different values of a 1 and a2 .

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4. Consider the market for used cars. There are 100 cars for sale, half of them are bad while the others are good. The owner of a bad car is willing to sell it for any price above 400 but the owner of a good car is only willing to sell it for at least

1000. The bad cars are worth 600 to buyers, and some are worth 1200 to them.

(a) At a Pareto efficient allocation which car will be sold ?

(b) If buyers cannot observe the quality of the car for sale, how much would they be willing to pay for a car ?

(c) Which cars will be sold in equilibrium in this market ?

(d) Suppose that the fraction g of the cars in the market are good. If buyer still cannot observe the quality, how large must g be for cars to be sold in equilibrium ?

MEC-001

3 P.T.O.

SECTION - B

Answer any four questions from this section. 4x10=40

5. (a) Distinguish between pure strategy Nash equilibrium and mixed strategy equilibrium. When would you use mixed strategy equilibrium ?

(b) Find all the Nash equilibrium of the following game :

Player 1

Player 2 Left Right

Up (5, 4) (1, 3) Down (4, 1) (2 , 2)

6. Assume that there are four firms supplying a homogenous product. They have identical cost 'functions given by C (Q) = 40 Q. If the demand curve for the industry is given by

= 100 — Q, find the equilibrium industry output if the producers are cournot competitors. What would be the resultant market price ? What are the profits of each firm ?

7. Rita faces the choice problem between two gambles. In gamble one, she wins 200 if a coin comes up head and loses 100 if the coin comes up tail. In gamble two, she wins 20, 000 if coin comes up head and loses 10,000 if coin comes tail. Assuming her initial wealth w is 10,000 find :

MEC-001 4

(a) if a risk neutral Rita would accept either, both or neither of the gambles.

•(b) What would be her decision on the gambles given her utility function U = ?

(c) Compare and explain your results in (a) and (b).

8. Discuss the approaches adopted by Pigou and Pareto for analysing the problem of welfare economics.

9. Why is there a social cost to monopoly power ? Suppose a Production Process gives rise to negative externalities, would your answer on social cost of monopoly change ? Explain.

10. The production function of firm is given as :

Q = K0 .5 1,05 .

Payment to labour (w) =1 and that of capital services (R) =1. Assuming that the amount of capital is fixed at k = io , derive the firms's short- run average cost curve and explain its shape.

MEC-001 5 P.T.O.

SECTION - C

Answer all the questions from this section : 2x10=20

11. Write short notes on any two of the following :

(a) Envelope theorem

(b) Hidden information.

(c) Actuarially Fair Premium

12. Differentiate between (any two ) :

(a) Profit function and cost function.

(b) First and second welfare theorem

(c) ISO cost and ISO grant functions

MEC-001 6

MEC-001

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No. of Printed Pages : 8

MASTER OF ARTS(Economics)

Term-End Examination

June, 2010


Time : 3 hours Maximum Marks : 100

Note : Attempt questions from each section as per instructions

given under each section.

SECTION - A

Answer any two questions from this section : 2x20=40

Present and explain Slutsky's theorem :(a) graphically and (b) mathematically.

A monopolist operates two plants : 1 and 2. Themarginal costs of the two plants are given by360-14x-2x2 and 310-15x—x2, with x

representing units of output produced in eachplant. If the price of this product is given by

396 — 4x2, construct the overall marginal cost anddetermine profit maximising output in each plant.

Explain the basic tenets of Rawl's theory of justice.

Define 'Nash equilibrium' and explain with thehelp of the game 'Prisoner's Dilemma'. Providean example of a game with multiple Nashequilibria.

MEC-001

1 P.T.O.

SECTION - B

Attempt any four questions from this section : 4x10=40

5. With Cobb - Douglas production functions, showthat :

the output elasticity with respect to eachinput is constant and

it can accommodate all types of returns to

scale.

6. How do you explain the prevalence of high wagerate along with unemployment in an economy,

using the efficiency wage model ?

Explain with a diagram the basic Williamsonmodel of managerial discretion and show that theexpenditure on staff is greater under this modelas compared to profit maximization.

Consider a two person, two commodity pure

exchange economy, with :

a RC112' U2 = -121(1.22'

q11 and a± C121 q l =12 + C122 = C12'

Derive the contract curve as an implicit functionof q11 and q12. What condition on the coefficientsa and p will ensure that the contract curve is astraight line ?

MEC-001 2

Illustrate the concept of adverse selection with theexample of medical insurance market. If age isused in this market as a signal by the insurancecompanies; under what condition would it beappropriate ?

In a duopoly situation, the market demand

function is given by P =100 — 0.5 (x), where x isthe total quantity produced. The costs of the twoproducers are given by C l = 10 x / and

C2 = 0 .25 4 . Find the joint profit and outputproduced by each firm under collusion. If thereis no collusion and each firm acts as a monopolistcompletely ignoring the other, what would betheir individual profits ? Does collusion increaseprofits ?

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SECTION - C



CES production function

Compensation principle and Kaldor-Hickscriteria

(c) Independence axiom

12. Differentiate between (any two) :

Hicks' and Slutsky's approach tomeasurement of real income andcompensated demand.

Joint profit maximising and market sharingcartels

(c) Risk pooling and Risk spreading

MEC-001 4

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June, 2009



Note : Attempt questions from each section as directed.-

SECTION-A

Ansrcer any trao questions from this section ' 2x20=40

Discuss the basic difference in approach adopted

by Pigou and Pareto to deal with problems of

welfare economics.

What is adverse selection problem ? Point out

the insight you gain from its formulation. Does

market signalling alleviate the problem of adverse

selection ? Give reason in support of your answer.

Consider an economy with two persons and two

goods. The utility functions of the individuals are

uA =x1A x2A ;

uB =(*18 x2B+s)2

and the initial endowments are given to be :

wn: (6,2) and wt: (2,6).

1..

2 .

3 .

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4 .

(u) Draw Edgeworth Box and show the initial

endowment of the economy.

(b) Find the set of Pareto efficient allocations

and show your result on the Edgeworth Box.

(.) Find the competitive equilibrium of this

economy.

Consider an industry with three firms each having

marginal costs equal to zero. 'Ihe inverse demand

curve facing this industry is :

P(qt, qz, q s) : 60 - (qt+ qz+ qs).

(u ) I f each f i rm behaves as a cournot

competitor, what is firm 1's best response

function ?

Ca lcu la te cournot equ i l ib r ium o f th is

problem.

Firms 2 and 3 decide to merge and form a

single firm (MC is still zero). Calculate the

new industry equilibrium and comment on

combined prof i ts from f i rms 2 and 3

considing pre and post merger profits.

(b)

\ L /

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N)rR 5.

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SECTION-B

Answer any four questions from th.is section. 4xl2=48

Take a consumer with a two period horizon.

His utility function is given as u = c.rcrand

actual and expected incomes are Y, :1-0,000

and Y2:5,250. if the interest rate is known

to be 5% Per annum, find the optimum

consumption expenditures of the consumer.

Suppose Kareena's ut i l i ty funct ion is

I( Y \ t

u= l -

l - . He r i n i t i a l i ncome when\ 1000 l

healthy is 36,000. However, there is a 50%

chance that she wili face financial loss on

being taken ill and the income is likely to

reduce by 20,000.

Find the expected value of her income.

What expected utility she will have

given the possible state of her health ?

\,Vhat is the risk premium she will be

willing to pay to cover the risk of

sickness ?

6 .

(a)

(b)

MEC-001 P.T.O.

7. Consider the following game given in extensive

form :

i ?(u) use backwards induct ion to compute an

equilibrium of the game.

(b) write this game in normal form.

Derive the indirect utiiity function from the given

direct ut i l i ty funct ion tL=alogxt+lr . Use Roy's

identity to conskuct clemand functions for the two

goods .r:, and xr. Ate these the same as demand

func t ions der ived f rom the d i rec t u t i l i t y

function ?

Explain the equity - efficiency ffade off in optimal

resource use with' welfare considerations'

Explain how Shephard's Lemma can be used to

cler ive the product ion funct ion from the cost

function.

8 .

g

10 .

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12.

SECTION-C

Ansuer all the questions from this section : 2x6='1.2

Write short notes oi1 any iws of the following :

(u) CES Production functicn

(b) Hoteliing's lernma

(.) Firsi welfare theorem

Differentiate between (any tano) :

(u ) H icks and S l r - r tsky 's approach to

decomposition of Price effect

lVtonopoly and monopsony

External economies and diseconomies.

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(b)

/ c )

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MEC-001



December, 2009



Note : Attempt questions from each section as directed.

SECTION - A

Answer any two questions from this section : 2x20=40What do you mean by a social welfare function ?If you assume that such a function exists, whatproperties of social optima would be consideredby you ? Discuss such properties.

How the efficiency wage theory can explain thepresence of unemployment and wagedetermination ?

3. Suppose that there is a pure exchange economywith 2 consumers and 2 goods. The endowmentsare w 1 = (2, 4), w 2 = (4, 3). Consumers areotherwise identical and they have utility function

11u(x,y) =x3y3.

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1 P.T.O.

Construct an Edgeworth Box for this

economy.

Give a definition of a Pareto Optimal

Allocation in this economy. Find all Pareto

optimal allocations and graph them in the

Edgeworth Box.

(c) How would you define a competitive

Equilibrium for this economy. Solve for the

equilibrium and check if the competitive

equilibrium is Pareto Optimal.

4. A monopolist has a cost function of c(y) =y so

that its marginal cost is constant at Re. 1 per unit.

It faces the following demand curve :

L0

for P > 20

D (P) =L 100

for P 20P

Find the profit maximising output.

If the government could set a price ceiling

on this monopolist to force it to act as a

competitor, whet price should they set ?

What output it will produce in such a

situation ?

MEC-001 2

SECTION - B

Answer any four questions from this section : 4x12=48

cVt) 5.

cVO

A consumer's utility function from consumptionin two-period horizon is u = C 1 C20 h. His incomestream is given as y1 =1000 and y2 = 648. If themarket rate of interest is 8% per annum, find thevalues for consumption in two periods whichmaximises his utility.

6. John's utility function is given as u ( x) =,5 where

x = wealth. His present wealth is Rs. 40,000. Heearns no other income. There is 0.5 probabilitythat he will need a surgery in connection with ahealth problem. In case the surgery is done, itwill cost Rs. 20,000. He is thinking of going for ahealth insurance presently which costs Rs. 10,000.

Find his expected wealth with and withoutinsurance.

Show how much he would be willing to payfor buying the insurance.

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3 P.T.O.

7. Two players first simultaneously declare Yes orNo. If any of the players declares No, then eachplayer gets 80. If both players declare Yes, thenthey play the following game :

2nd Player

1st Player

Invest Consume

Invest 100, 100 0, 60

Consume 60, 0 60, 60

Find all the subgame-perfect equilibria of theentire game involving pure strategies only.

Suppose that consumer's preferences are given bythe utility function

1u( x1 , x2 ) =( xf +x12" ) P -Find its indirect utility function and expenditurefunction.

What is the theory of Second Best ?Prove the theorem with the help of a diagram.

10. Let the optimal incentive plan be given ass (x)=wx+k where

s(x) = incentive schemex= output, w= wage and k = constant

A worker can produce x units of output at a cost2

of C(x) = —x 2 and he can achieve a utility level

of II =0 working elsewhere. What is the optimalwage-labour incentive scheme s(x) 1 for thisworker ?

MEC-001 4

SECTION - C



Production possibility frontier.

Second welfare theorem.

(c) Third degree price discrimination.

12. Differentiate between (any two) :

Homogenous and homothetic productionfunctions.

Basing point price and limit price.

(c) Pooling and separating equilibria.

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MEC-001

5 P.T.O.

uesren oF ARTS (ECONOMICS)

Term'End Elramination

June, 2OO8

MEGOOI : MIGROEGONOMIC ANALYSIS

Tlme : 3 hours Maxlmum Marks : 700

Note: Attempt guesiions from eoch sertlon ds per

instrucrions gitren under each seuon'

SECTION A

Answer any two guestions frcm this ser,tlon' 2x2O=4O

1. (i) Describe the role of reaction funcdons in Cournot's

model of duoPolY.

0i) Two firms producing a homogeneous product, {ace

the demand and cost firnctions given by

p = 100 - 0.5 (x, + xr);

Cr = 5x1 and

cz- o '5 *22'

Derirre the reaction functions of th€ finns and obtatn

the Coumot's solution for the market.

P.T.O.MEC-OO1

2. $l What ls a pure o<change econornr ?multimarket equilibrium attained Ineconomy ?

How issuch an

3.

4.

(ii) Take an economy wtth turo eommodities (Q, andQy' and two lndvlduals (l and II). Assume thatindivtdual I is endowed unth 78 units of Q, and noQz. Her utility ftmction ls glven as

Ur - 9rt <112 + 2Q11 + 5912'

Agatn assume that lndivldual II is endowed with154 units of Q, and no Qr. Her utility function isgirren as

Uz = 9zt CzZ + 4qZL + 2qzz.If these two individuals enter Into Cade, whaf wil bethe equilibrium o(change rate of commodities, andalso prices that clear the market ?

Show how Pigou attempted to derir,re the maxirnlsattron ofsocial welfare.

Do you agree with the proposition that a risk-averseperson will optimally hry firll inslrance if the indjrance isactuarially fair ? Gire reasons in support of llour an$ rer.

MEC-OO1

D.

6.

SECTION B

Answer ony !ou? questlons lrom i,hls sectton. 4x7O40

What insight is gained from the efliclenqr wage model

de\relop€d by Shaplro and Stiglitz ? Disdrss its important

conditions that help solve for equilibrium conditior\s.

Two firms are deciding slmultaneously whether to enter a

market. If neither enters, they make zero profits. lf both

erter, they make profit -1, since the market ls too small

for two firms. lf only one enters, that firm makes high

profits. Such a game is summarlsed in the following lable :

*)K Enter Do Not Enter

Enter -1) (10, 0)

Do Not Enter (0, 5) (0, 0)

What are the pure and mixed stratery Nash equilibria of

thls game ?

7. A representatiw household's consumption in an economy

is denoted h7 Co and C, lor present and fuhte

consumption- The market rate of borror'ving is given as

10%. Suppose you have cunent wealth Wo = Rs. 100 and

future wahh Wr - Rt' 120. Determine the total present

value of your wealth.

MEC-ff}1 P.T.O.

E. How does Stone€eary ufllity function help in bringingtogether conzumer demard and a<pendifure relation toanalyse the opUmal behaviour of conzumer ?

9. Why r,vould you acceprt Baumol's theory of salesmaximisation as a better altematirre to usual profttmaximisation models analysing the behaviour of flfm ?Girre reason in support of pur ansrer.

1O. The utility attactred by an individrnl to different lewls ofirrcome is gir,en as

Income (in Rs.) Utility

5,000 12

10,000 22

15,000 30

20,000 36

25,000 40

30,000 42

She is cunently eaming 1096 rehrm on her Rs. 2,00,000inrrestment in a riskless inr,rcstment. Suppose stre has thechoice of in\resting in a project that has a 0.4 probabilityof yielding a retum of Rs. 30,000 on her in',estnent anda 0'6 probabi.lity of payrng Rs. 10,000. Wll she morae her

. capital to the risky proJeci ?-

MEC-OO1

sEcTloN cAnswer oll the quesrions lrom this ser;fion' *7O=2O

11. Write short not€s on any troo of the following :

(i) Envelope theorem

0i) Public goods

(iii) Pro{it function

12. Dfferentiate between (any firo) :

(0 CES and Translog production ftmction

til Moral hazad and Adverse selection

(ul) Homogeneous utility function and Honotlretic utiltty

function

Mrc-oo1 5 4.OOO

I MEc4o1 |

MASTER OF ARTS (ECONOMICS)'

Term-End Bramination

December, 2OOB

MEC-001 : MICBOECONOMIC ANALYSIS


Note : Attempt guestions Jrom eoch section os

directed.

SECTION A

Answer ong two questions from thiLs section2x20=40

1. (i) Discuss the role of conjectural

Stackelberg's model oJ duopoly.

(ii) Two firms producing a homogeneous product

face the demand and cost functions given by

P = 100 - 0.5 (x, + x2)

C, = 5x, and C, = 0'5 *!.

Find the equilibrium output and profit of the

firms . using Stackelberg's model of price

leadership.

MEC-001

2. (i) What is Walras's law ? How do you determine

multimarket equilibrium with its help ?

(iil Consider a hrro-person, two-commodity pure

exchange competitive economy. The

consumer's utility functions are

- Ur = errelz + 12 ur, + 3 qtt and

Uz :ez tgzz+ Iq t + 9 q r r .

Consumer I has initial endowments of 8 and 30

units of Q, and Q, respectively. Consumer II has

endowment of 10 units of each commodity.

Determine an equilibrium price ratio of this

economy and construct of{er curves as

mathematical functions from the lirst order

condition lor the two consumers.

What are the conditions of Pareto optimality ? Detive

these. Point out the main weakness of Paretian

analysis.

Consider a person having vNM expected utility

preferences over lotteries. Discuss how she maximises

her utility.

MEC-001

SECTION B

Answer any Jour questions Jrom this section.4x12=48

5. Prove the following implications ol the single-crossingproperty :

If Ci(x) > Ci(x) for all x, then {or any two distinct

levels of output xl and x, for which x, > xl, we mlrst

have Cr(x2) - Cr(xr) > Cr(x2) - Cr($.

6. The pay-off matrix of strategies adopted in run and

hide game between a hunter and a prey is given as

PreyHunter Run Hide

Run (60,201 {0, 0)

Hide (0, 0) (20,60)

Find the mixed shategy equilibrium of the game.

7. Suppose there are t'wo goods, consumption C withprice P = l and leisure R with price W = 8. The

endowments of the two goods are given by d = 0and F = 24. The utility function is

U(C, R) = 2 log R + Iog C. How much labour should

be supplied and how much consumption should bechosen ?

MEC-001 3 P '

8, How do you formulate an indirect utility funciion ?

Discuss the information it gives in contrast to utility

function.

9. How does managerial discretion in Williamson's

model help in determining the equilibrium of a firm ?

Elaborate your viewi:oints.

1O. Consider a lottery with three possible outcomes, viz',

Rs. 100 will be received with probability 0'1

Rs. 50 will be received with probability 0'2

Rs. 10 will be received with probability 0'7.

(i) What is the expected revenue of the lottery ?

(ii) What would a risk neutral person pay to play

the lottery ?

sEcTloN c

Answer all the questions from this section. 2x6=12

11. Write short noles on any troo of the following '

(i) Hotelling's lemma

(ii) Merit goods

(iii) Consumer'ssurplus

12. Differmtiate between (any trlo) :

(i) Adverse selection and Moral hazard

(iil Collusive and Non-collusive oligopoly

(iiil Short-run and Long-run cost functions

3,OO0MEC-001

No. of Printed Pages : 4 I MEC-0021

MASTER OF ARTS (ECONOMICS)

Irt) Term-End Examination 00 c\1 December, 2011

MEC-002 : MACRO ECONOMIC ANALYSIS


Note : Answer any two questions from section-A and five questions from section-B.

SECTION - A

Answer any two questions in about 500 words each. 2x20=40

1. In the solav model what is meant by steady state ? Explain the impact of population growth and change in savings rate on steady rate.

2. What is meant by business cycle ? How do the new classical economists explain business cycle ?

3. What is meant by rational expectations ? What are its impact so far as inflation unemployment trade off is concerned ?

4. Explain how internal and external balance are achieved under flexible exchange rate ?

MEC-002 1 P.T.O.

SECTION - B

Answer any five questions in about 250 words each. 5x12=60

5. Critically examine the endogenous growth theory.

6. How do you derive the LM curve ? What are the implications of LM curve ? What are the factors that influence the shape of LM curve ?

7. Why do firms not change their price frequently even when other variables are changing ? Explain in light of new Keynesian perspectives.

8. Why do firms offer a higher wage rate to workers than the equilibrium wage rate ? What are its impact as the macro economy ?

9. Critically examine the political business cycle model as propounded by Kalecki.

10. Bring out the main tenets of permanent income hypothesis.

11. Examine the points raised by Lucas while criticising Keynesia economics.

12. Write short notes on the following : (a) Insider-Outsider model of unemployment. (b) Rules versus discretion.

MEC-002 2

MEC-002No. of Printed Pages : 4



June, 2010

MEC-002 : MACRO ECONOMIC ANALYSIS


Note : Answer any two questions from section-A and Five

questions from section-B.

SECTION - A

Answer any two questions from this section in about

500 words each : 2x20=40Critically examine the Solow model of economicgrowth.

Distinguish between natural, cyclical andstructural types of unemployment. Criticallyexamine the Keynesian view on unemployment.

Explain equilibrium output and interest rate onthe basis of IS-LM model. How do you derive theIS and LM curves ?

How is the exchange rate determined underflexible exchange rate system ? What are thefactors that affect flexible exchange rate ?

MEC-002

1 P.T.O.

SECTION - B

Answer any five questions from this section in about

250 words each : 5x12=60

Explain the concept of Phillips Curve. Why is itvertical in the long run ?

Distinguish between the New classical and NewKeynesian views with respect to price rigidity.

Explain the political business cycle theory of

Kalecki.

What do you understand by real rigidities ? Whydo real rigidities occur in the credit market ?

How does the efficiency wage theory justify theexistence of higher than market-clearing wagerate ?

Distinguish between the concepts of adaptiveexpectations and rational expectations.

Bring out the salient features of the search theoryof unemployment.

Write a short note on the New Classical business

cycle theory.

MEC-002 2

lMEC-ootlCS)

N[nO

MASTER OF ARTS (ECONOMI


]une, 2009

MEC-002 : MACRO ECONOMIC ANALYSISTime : 3 hours Maximum Marks : 100

Note : Anszuer any tzao questions from section A and Fiae

!___ _SECTION A

Answer any two questions in about 500 wordseach: 20x2=40

L. What do you understand by steady state in 20neoclassical growth model ? Explain how steadystate is maintained when population growth andtechnological progress are taking place.

\Mhat do you understand by endogenous growth ?What are the various models of endogenous growththeory ? Discuss.

Explain briefly Lucas' critique of economic policyevaluation. What is the role of microfoundationsin Lucas' critique ?

Briefly discuss the l i fe cycle hypothesis andpermanent income hypothesis theories ofConsumption.

3 .

202.

20

204 .

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'12

L 2

LU .

ry

a

{ n

\ 2

SECTION BAnsrver any fiue questiorrs in about 250 wcrdseach : 12x5=50

5. Explain the vie'.vs i l f Keynesian and new- 1,2Keynesians cn unemployrrient.

l\rhat do you understand by real rigidities ? 'v\4ry

do rigiciities ccc-rir in goods rr.arket ?

Explain hcw an ecilnom)/ rnaintains internal and

external balance under {ired exchange rate.

Wr:te shcl t r ' : les On :

{u) Purchasing lrcwer Parity (PPF)

ib) NEEi3. and REER

Wirai io yo'r understand by marginai propensity

tc ccnsume" -i>cplatn ;ts l"cie.in Ceterrnjnaiicn of

irrvestn,ent multipiier.

Does social secnri.ty sn/si;el:n necessariiy eiiminate

d ; " 'narn ic ine f f i c ie : rc ; r in the cve i lapu ing

generatir:ns f:arr.ework ? Expiain briefly.

Differeirtiaie between neraz classicai business cycle

theorv anci real "business cycle thecry.

How dces rationai expectaiions infiuence policy

making ?

1 f lI U .

r - { "

12.

1 2

" t2

MEC-OO2

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I MEC-0021



December, 2009

o MEC-002 : MACRO ECONOMIC ANALYSIS


Note : Answer any two questions from section A and Five

questions from section B.

SECTION - A

Answer any two questions in about 500 words each.

Under what conditions does an economy realise 20

steady state ? In the neo classical growth modelexplain how Golden Rule is different from steadystate.

Explain Rational Expectations hypothesis. How 20do you explain the unemployment inflationtrade - off on the basis of rational expectation ?

Explain the basis on which Lucas criticises 20

econometric modelling. What is the role of microfoundations in Lucas critiqued ?

What do you understand by business cycle ? 20Explain Michal Kalecki's views on business cycle.

MEC-002

1 P.T.O.

SECTION - B

Answer any five questions in about 250 words each.

Classify various theories of unemployment based 12on the possible responses of the firm.

What are the specifications and solutions of the 12efficiency wage model ?

Briefly explain the Fisherian concept of 12consumption as an intertemporal choice.

What is an IS curve ? Explain how equilibrium in 12the real market can be presented through IS curve.

Critically evaluate the endogenous growth theory. 12

Write short notes on : 12

Menu cost

Non - accelerating inflation rate ofunemployment (NAIRU)

Explain the mechanism through which internal 12and external balance takes place under flexibleexchange rate.

Explain briefly the basic tenets of new classical 12business cycle theory.

- o 0 o -

MEC-002 2


Term-End Enamination

June, 20O8

MEC-{IO2 : MACROECONOMIC ANALYSIS

Tlme : 3 hours Mc,ximum Marks : 70O

Note : Answet ony turo questions ftom &ctlon A ond

,rue questions from Section B.

SECTION A

Answer any tu,o questions in oboul 5OO wotds each'

1. The trade-off between inflation and unemployment is not

possible wtder rational exp€ctations hypothesis'

Substantiate. 20

2. Explain why prices need not be flexible in the real world'

What is the viewpolnt of New Kaynesian economists on20real rigidities ?

3. Explatn how equilibrium is maintained in both goods and

monetary sectors by rsing IS-LM curves' 20

4. Explain hour steady slate is achieved in the Solou' model'

What additional conditions need to be {ulfilled for attaining

gotden nrle ? 20

MEC-OO2 P.T.O.

5.

SECTION BAnswer any ,iae questtons in sbut Zi| words each.

hplain the role of money In the orerlapptng generadonsmodel.

E<plaln the concept of investment muldplier in thepresence of govemrnent sector. What are the factors thataffect the value of the mulbplier ?

Explain why monetary policy is ineffecti\re in controllingadverse balance of payrnent under fixed exchange rate.

Bring out the salient features of search and matchingmodel.

9. Gve a brief account of the contracfing models in uragefixation by ftrms.

lO. E<plain the important tenets oI real hsiness qlcle theory.

11. Write short notes on the following :

(a) Efficlency wage theory

(b) Lucas critique

12, Distinguish betwem the concepts of adaptitre expectationsand rational expeciations. _

1 2

72

72

12

72

12

12

7.

1 2

MEC-OOz 4,OOO

fMrc{orll--- ----J



December, 2O08

MEC-002 : MACROECONOMIC ANALYSIS

Time : 3 hours Moximum Marks , 700

Nole : Ansurer any two questions Jrom Section A

and Jiue questions from Section B.

SECTION A

Answer ony t&to qusstions in obout 5OO words

each.

1 . The Phillips curve describes

inflation and unemployment.

explain. stagflation and

unemployment ?

a trade-off between

Can it be used to

natural rate of

Rigidities in goods and credits markets are reaFworld

phenomena. Substantiate with appropriate theories. 20

MEC-002 P.T .O .

3.

4.

Steady state value of the K - L ratio is obtained whenmarginal product of K is equal to the sum of the rateof population grov,/th and the rate of time preference.

Substantiate in light of the Ramsey model.

Explain how simultaneous equilibrium is achieved ingoods and money market with the help of IS - LMcurves.

MEC.OO2

SECTION B

Answer any fio:e questions in about 250 wordseach.

5. Why is it difficult to include expectations in economic

models ? What are the implications of expectations on

economic theory and policy-making ? 12

6. Explain the salient features of efficiency wage theory. 12

7. How does search theory help in explainingunemployment in the economy ? 12

8. . In an economy with flexible exchange rate, show howfiscal and monetary policies can be used to maintaininternal and external balances. 72

9. What do you understand by fixed exchange rate

system ? Explain how price adjustments take place

under such a system. 12

10. Write a short note on the political business cycle of

Kalecki. 12

11. Distinguish between the concepts of NEER and

REER. 12

MEC-OO2 P.T .O .

12. Write short notes on the following :

(a) Endogenous growth models

(b) Steady state in Solow model

1 2

MEC,OO2

No. of Printed Pages : 11

I MEC-003 I


Term-End Examination December, 2011

MEC-003 : QUANTITATIVE TECHNIQUES


SECTION - A Attempt any two questions from this section.

1. A revenue maximising monopolist, requires a profit of at least 1500. Her demand and cost functions are : 2x20=40

P=304 -- 2q and C=500 +4q+8q2

Determine her output level and price. Contrast these values with those that would be achieved under profit maximisation.

2. (a) Given the supply and demand for the cobweb model as :

CD Qst 61Y--5-t CD 0 Qdt = 19 —6Pt OD Find the inter temporal equilibrium price CO

and determine whether the equilibrium is stable.

(b) Establish the stability condition of samuelson's multiplier-accelerator interaction model.

MEC-003 1 P.T.O.

3. (a) Given the marginal propensity to import M' (y) = 0.1 and the information that M=20 when y=0, find import function M(y).

(b) Marginal propensity to consume C'(y) =0.8 + 0.1 y -112 and information that C = y when y =100, find consumption function C(y)

4. (a) If xi , x2, --, xn is a random sample from a normal population N(p,,1). Show that

1 ,2 X - L A.i

11 • =. 11

is an unbiased estimator of

µ2 + 1. (b) Derive the least squares normal equation for

fitting a parabolic curve. What change will be necessary if there was a change of origin for the X data only ?

MEC-003 2

SECTION B

Answer any 5 questions from this section. 5x12=60

5. A bag contains 8 red balls and 5 white balls. Two successive draws of 3 balls are made without replacement. Find the probability that the first drawing will give 3 white balls and the second 3 red balls.

6. Consider the matrices :

A= —1 6 5

—2 12 10

3 - 6 5

B = and

1 2 3

1 —3 —2

--1 - 4 3

Find the rank of matrices A, B, A + B, AB, BA.

7. Ten competitors in a musical contest were ranked by 3 judges A, B, C in the following order :

Contestant 1 2 3 4 5 6 7 8 9 10 Rank by A 1 6 5 10 3 2 4 9 7 8 Rank by B 3 5 8 4 7 10 2 1 6 9 Rank by C 6 4 9 8 1 2 3 10 5 7

Use rank correlation method to discuss which pair of judges has the nearest approach to common liking in music.

MEC-003 3 P.T.O.

8. Marks obtained by 12 students in college test (x) and university test (y) are as follows :

x 41 45 50 68 47 77 90 100 80 100 40 43

y 60 63 60 48 85 56 53 91 74 98 65 43

What is your estimate of the marks a student would have got in the university test, if he got 60 in the college test but was ill for the university

test.

9. What is a Poisson Distribution ? Find the mean and variance of a poisson distribution.

10. (a) Solve the following problem graphically :

Min C = 0.6x 1 +x2

Sub to 10x 1 + 4x2 20

5x1 + 5x2 20

2x1 + 6x2 > 12

x1 , and x2 > 0.

(b) Why does the solution occur at a corner point only ? Give reasons.

11. Given the input-output matrix :

0.1 0.3 0.1 A = 0.0 0.2 0.2

0.0 0.0 0.3

MEC-003 4

and final demands are F 1 , F2 and F3 . Find the output level consistent with the model what would be the output levels if : F1 =20, F2 = 0, F3 100.

12. (a) The demand curve for a consumer is

p — d = — where d and b are constants. Find

the price elasticity of demand.

•

(b) Find --, when : ax

(i) y =-- log (ex +3)

(ii) y = 1

a2

MEC-003 5 P.T.O.

M EC-003No. of Printed Pages : 12


co Term-End Examination

June, 2010O



Note : Answer the questions from each section as directed.

SECTION - A

Answer all the questions from this section : 2x20 =40

1. A competitive firm has the following productionfunction :

y=f (x) = 400x + 60x2 — 6x3

Where y= output, x = input. The firm faces anoutput price of P=10 and an input price ofW = 5440.

Write a profit function of this firm in termsof output and input prices and the inputlevel.

What is the profit maximising level of inputfor this firm ? Verify that the input levelyou choose is the profit maximising point.

Find the marginal product (MPx) of thevariable input.

Verify that P(MPx)=W at the profitmaximising input level.

OR

MEC-003

1 P.T.O.

What are the differences between open andclosed input-output models ?

An economy has two sectors, agricultureand manufacturing. The input-outputcoefficients for these sectors are given as :

Output SectorInput Sector

Agriculture Manufacturing

Agriculture 0.1 0.5Manufacturing 0.2 0.25

If the final demands for these sectorsare 300 and 100 units respectively,determine the gross output for the twosectors.

If the input coefficients for labour ofthe two sectors are 0.5 and 0.6respectively, determine the total unitsof required labour.

2.

What is Bayes theorem ? Explain how would youmake use of the results of this theorem to derivethe law of total probability.

OR

Define the standard error of a statistic. Explainhow it is helpful in testing of hypothesis anddecision making.

MEC-003 2

SECTION-B


3. The following data are available for an industrywhich produces three products A,B and C.

ProductRequired time (hrs) Profit

per unitAssembly FinishingA 10 2 80B 4 5 60C 5 4 30

Industry's capacity 2000 1009

Write the compact linear programmingmodel using the above information.

Derive the optimal solution of the model byusing simplex method.

OR

Distinguish between the characteristics of first andsecond order difference equations. Give examplesof economic problems that are solved with thehelp of each category of such equations.

MEC-003

3 P.T.O.

4. (a) Consider the following national incomedetermination model :

Y=C+I +G

C=a+b (Y —T)

T=d+ty

Where

Y = national income

C = Consumption expenditure

T = Tax collection

If you are given that Y,C and T areendogenous variables ; I and G areexogenous variables and t is the income taxrate, using cramer's rule solve the model forendogenous variables.

(b) Solve the equation

OR

dy _ X2 - y2

dx 2 xy

A production function is given as

—2(axi X2 - bx i2 — cx2 )

ax1 + bx2

Determine its degree of homogeneityand derive the marginal products ofx1 and x2.

Show that marginal products derivedare homogenous of degree zero. Whatmeaning will you describe to such afeature of the production function ?

MEC-003 4

5. Assume that on an average one telephone numberout of 15 is busy. Find the probability that if 6randomly selected telephone numbers are pickedup,

not more than three are busy

at least three of them are busy

OR

A sample survey was conducted to see whetherthere is any significant difference in the sales bytwo salesmen (A and B) in a district. Thefollowing data have been obtained from survey.

A BNo. of Transaction 20 18Average value of transaction (Rs. 000) 170 205Standard deviation (Rs.000) 20 25

What conclusion can be reached on the differenceof sales by A and B ? (Table value at 5% levelof significance for the test of difference is givenas 1.9)

6. A problem in statistics is given to 5 students Al,A2, A3, A4 and A5. Their chances of solving it

1respectively, are 1 1 1 1

—2 , 3 , 4 , —5 and —6 . What is the

probability that the problem will be solved ?

OR

Explain the relevant considerations of making achoice between one-tailed and two-tailed tests.How would you determine the level of significancein the above tests ?

MEC-003

5 P.T.O.

SECTION-C


7. Estimate the regression equation of Y on X fromthe following data :

X 1 2 3 4 5Y 2 5 3 8 7

OR

Find the expected value E(X) and Var(X), whereX is the outcome when we roll a fair die.

8. Write short notes on any two of the following :Monotone functionEigen value and eigen vector

(c) Rank of a matrix

MEC-003 6

NfMASTER OF ARTS (ECONOMTCS)


June, 2009

MEC.OO3 : QUANTITATIVE TECHNIQUES



SECTION . A

Attempt any hao questions from this section.

L. Consider the utility function u:f (xt--_*x,.,)

where xi, i=1, 2, ..., n are the quantities of the

n goods consumed. Let the price of good xi be

pi, i: L, 2, ..., n. Let M be the consumer's income

show that the Lagrangian multiplier of the utility

maximisation problem equals the marginal utility

of income.

What is a first order linear differential

equation ? List the steps to obtain the

solution to homogeneous differential

equation.

(u))

2x20=40

MEC-003 P.T.O.

(b) When the price of a commodity is P, Let

D(P) :a -bP deno te the demand and

S(P):a+ BP the supply. Here a,b, a, P, are

constants and posit ive. Assume P is a

funct ion of t ime, P( t ) , supPor"S is

proportional to excess demand. Solve for

P. Show that the solution is stable.

\Mhat is the normal probability distribution

function ? State its properties.

The concentration of impurit ies in a

semiconductor used in the production of

microprocessors for computer is a normaliy

distributed random variable with mean 127

parts per million and standard deviation 22-

A semiconductor is acceptable only if its

concentration of impurities is below 150

parts per million. \44rat proportion of the

semiconductors are acceptable for use ?

(The area under the standard normal curve

for the value of z:1.5 is 0.668).

If i is the sample mean prove that the

expected va lue of v , E(x) equals the

population mean (p).

Describe the process of testing hypotheses

about popuiation proportion of a given

atllibute.

\ c l l

(b)

3 .

(a)4 .

(b)

MEC-003

SECTION. B

Answer any fiue questions from this section. 5x12=60

5. A monopolist 's demand curri /e is given byp :100 - 2q ,

(u) Find his marginal revenue function.(b) \Atrhat is the relationship between the slopes

of the average and marginal revenue curves ?(.) At what price is marginal revenue zero ?

6. Find the inverse of the matrix.

Explain the Hawkins - Simon condition forthe viability of an input - output table.

Given the input matrix and the final -

demand vector.

0.250.100.38

Write down the specific input - outputmatrix for this model. Check whether thegiven data satisfy the Hawkins - Simon -

condition.

(a)

(b)

f+ t -t l

l 0 3 2 |L 3 0 7 J

o34l fraool0.12 | D:l 200 |o j l m o j

[o.osa: | 0.33

10.1e

MEC-003 P.T.O.

0 2 3 4

P(n ) n ? 0.2 0 .1 0.3 0.2

8 .

9 .

11.

L2.

Find the extreme value (s) of z=2x12-x1x2 +

4xr2 +x1x3 + xuz+2. and using the Hessian

matrix check whether the extreme value (s) is /

are maximum or minimum.

Suppose we roll a die and are told that the number

is even what is the probability that it was 2 ?

10. Suppose x has the fol lowing probabil i ty

distribution.

Find the mean and variance of the distribution.

Explain the method of maximum likelihood for

estimating the vaiue of a population parameter.

What is the relationship between confidence

interval and hypothesis testing ? Distinguish

between Type i and Type II error and explain

what is meant by the power of a test.

- o O o -

MEC-003

I MEC-003 I


Term-End Examinationc0December, 2009

O




SECTION - A

Attempt any two questions from this section : 2x20=40

1. Consider a monopolist who produces two goods.Let the demands facing the monopolist be :

Qi = 40 — 2p 1 + p2

Q2 =15 ± Pi —P2

where Qi (i =1, 2) are the goods and pi (i=1, 2)are prices. Let the total cost function be

= (212+ (21 (22 ± (222

Find the profit maximising output levels andprices. Also find the Hessian matrix.

MEC-003

1 P.T.O.

2. Consider an aggregate production :

Function Q = K" L l ', where Q, K and Lare all functions of time. Depict and solvefor the time - path of the capital output ratio.

Solve the equation :

(t +2y)dy+ (y+3t2)dt= 0

3. (a) Write down the distribution functions of thebinomial distribution and poissondistribution. When do we say that a poissondistribution is an approximation of binomialdistribution ? Obtain the mean andvariance of the binomial and poissondistribution.

(b) Write down the properties of the normaldistribution. For a standard normaldistribution, write the density function.

4. (a) Explain the process of drawing inferencesand testing hypothesis about the differencebetween two population means, when thepopulation variances are known.

(b) How would you draw inferences about the•variance of a population.

MEC-003 2

SECTION - B

Answer any five questions from this section : 5x12=60

c`l 5. Find the inverse of the matrix

4 —200 1_O 7 3 0

2 0 1

(a) The supply functions of a certain commodityis :

Q =a +bP2 + (a<0, b>0)

where R is rainfall. Find the price elasticityof supply.

(b) Find the total differential, given :

Suppose a large jar contains eight red balls, sixyellow balls, and six blue balls. Two balls are tobe selected at random from the jar, and the firstball selected will not be placed back into the jar.

What is the probability that the first ball willbe red and the second yellow ?

What is the probability that neither will bered ?

MEC-003

3 P.T.O.

8. Suppose the technology matrix is0.2 0.3 0.2

A = 0.4 0.1 0.20.1 0.3 0.2

10Let the final demand vector be D = 5

6Find the level of production of the three goods.

9. Given the rate of investment is I(t)= 12tY3 and

that initial capital stock is K(o) = 25.Find the time path of capital stock K.

Find the amount of capital accumulationduring the time intervals [0, 1] and [1, 3].

10. (a) What is sampling distributions ?State the Central Limit Theorem.State the properties of point estimators.

11. (a) Given the values of X and Y

X 1 2 3 4 5Y 3 7 5 11 14

Regress X on Y

(b) Given the values of X and Y

X 25 25 30 30 16Y 2 3 5 1 8

Regress Y on X

MEC-003

4

12. (a) What is a test statistic ?

Distinguish between one-tailed andtwo-tailed lists.

What is p-value ?

- o 0 o -

MEC-003 5 P.T.O.

Tlme:3 hours l


Term-End Enamination

June, 2OO8

MEG003 : OUANTITATIVE METHODS

Maximum Morks : 70O

l\bte : Answer the guestlons ltom eoch sectlon os

dtrected.l

SECTION A

Answer ony auro questions from thls sectton. 2x20=4O

1. A prtc€ discriminating monopollst opemting in three

market segments has demand functions $wn by

P r = 6 3 - 4 Q r

P 2 - 1 0 5 - 5 Q 2

P s - 7 5 - 6 Q s

where Q, + Qz + Qs - Q (toial outprn).

Its co6t function is

C = 2 0 + 1 5 Q .

Fud the equilibrium quantities o{ Qt, Qz and Qa; total

ptofit and price charged in each market segment.

MEC-OO3 P,T.O.

2. Why do ylou examlne the Hawktns - Stmon conditionswhile solving input-output problerns ? Are th€ Hawkins -Simon condiflons satidied ln the follming .tdJurology

matrix A ?

fo07 0.2s.lA = l I

10.20 0.15j

3. (i) l{lhen do you use the addition theorem ofprobability ? How is it dlfferent from that of themultiplication theorem of probabillty ?

(iD A and B throrr altematively with a palr of dice, Awlns if sh€ throqrs 'six' before B throws ,seved: ..and B wins if she throws 'ser,ren' before A throws'six'. If A begins, what is the probability that shewins ?

4. (i) Give examples of the problems where you canmake rse of Poisson distrtbufion. Does it haw a

' probability density function ? Why or why not ?Discuss 5our anslrer in the context of rnean andvariance of Poi$son dlstritution.

0i) In a sequence of 4 trials with probablltty ofI

success P = 3, what ts the probability that thereJ

will be e:<actly two slccess€s ? .,

MEC-OO3

SECTIONBAnswer ony lour questions lrom this sec on, 4x1O=40

5. A linear programming problem ls giwn as

M a x . z = 3 o x r + 5 0 x ,

subject to x, + x, > 9

x, + 2x" > L2

where x, l 0; x, I 0.

Fhd its opbmal solution.

lf the standard deviation of output per acre from a sampleof 34 representatir,re firms producing paddy is gS kg, is thehypothesis that standard deviation of output per acre of allflrms prodrcing paddy is lO7 kg rejected at 5% level ofsignificance ? (Use large sample test)

Let output be a funAion of three inputs such that

Q - A K u L b N "

(i) What is the degree of homogeneity of the furrction ?

(i0 Flnd the share of the input N in the product if thefactors are paid by the amount of their marginalproducts.

8. There are four part-time workers who are paid Rs. 20,Rs. 25, Rs. 40 and Rs. 45 as their wage. Btirnate theaverage daily wages of the workers on the basis of asample slze 2 and comment on the variance of samolemeans.

7.

MEC-OO3 P.T.O.

9. What economic interPretatlon wond you attribr'te to ttre

lssre oI linding' the 'time path' throqgh' a difrsr6

equation ? Explain 5our vtew taking the atample of cobunb

1O. For 150 beams of a partianlar varieiy, the mean and

standard devlations of breadth were found to be 8'5 mm

and 0'5 mm respectively. Test if the observed mean dilfers

significant! from 8 mm.

MEC-OO3

sEcrloN C

Answer ony tuto questtons !rcfl thls t*r:tion' 2x10-2O

11. 0 Given the tollowing data' estimate the regression

equa t ionY=a+FXN - 42, tX = 1978; )Y ' 2135' ̂

X'XY = 102847; >X2 = 9232 and EY' - 111399'

(iil Frnd the profit of the firm when its output (d is 100'

if it records a marginal cost and total rerrcnue of

M C - 4 + 0 ' 8 q a n d T R = 1 2 '

12. (d Differentiate between

(a) Homogeneous andNon-homogeneors functlons

b) Probability mass function and Ptobabtlity density

ftrnction

(ii) Define the following ierms :

(a) Mathemabcalexpectation

(b) Rank conelation coefficient

f3. (i) (a) Solve the equation

2 t d Y + Y d t ' 0

(b) Two dice are rolled simultaneotsly' Find the

ProbabilitY of (six' six)'

(iil Solw the equation Yt+ 1 - o Y, - p with iniual

condition Yt = Yo when t = o'

MEC-OO34,ooo



December. 2OO8

MEC-0O3 : OUANTITATIVE METHODS

Time : 3 hours Moximum Morks : 700

Note : Ansu.rer the questions from eoch section as

directed.

SECTION A

Answer any tuo questions from this section.2x20=40

l. Suppose a monopolist producing two products, Q,and Qr, faces the demand function of

Q l : 4 0 - Z p t + p z

Q 2 = 1 5 + P r - P z

Let the total cost function of the firm be

c = a i + Q r Q z + Q ? .

Find the optimal price and quantity for the

monopolist and examine the second order conditionsof optimisation.

MEC.OO3 P.T .O .

2. The input coefficient matrix A, for an economy which

is described by three sectors is given as

[oo 0.3 or.ln = l o s 0 1 0 1 l

Lor o.4 ool

l{ the final demand vector of this economy is given

by

find the output levels of the three sectors.

3. (il When do you use the multiplication theorem of

probability ? Discuss the theorem including its

underlying rationale.

A and B play a match to be decided as soon as

either has won hryo games. The chance of

either winning a game is j and its being20

drawn is I Wnu, is the probability that the10

match is finished in 2 games ?

['*lD=120 I

L e0 l

(tu

MEC.OO3

4. (i) Give examples of problems where you canmake use of binomial distribution. Write itsprobability density function and discuss theproperties of parameters therein.

(i1) In an experiment with N = 7 and P : 9, what4 '

is the probability of getting no more than

2 successes ?

MEC-003

,SECTIONB

Answer ony four questions t'rom this section.4x1,0=40

5. Solve the following Linear Programming model in Xt

and Xr.

Maximise Z = 45Xr + 55 Xz

subject to

6 X , + 4 N z < 1 2 0

3 X r + 1 0 X 2 < 1 8 0

where X, > 0, X2 > 0.

5, The standard deviation of the distribution of income

for a sarnple o{ 100 households was found to be

Rs. 6,970. Test the hypothesis that the standard

deviation of the dishibution of income for all

households is Rs. 4,700. (Use large sample test)

7. Let the production function Q = f (K, L) be

homogenous oI degree 2. If you know that Q, Ko and

L are output, capital and labour, find

the MPPU {unction.

Is MPP* function homogenous in K and L ? lf

so, of what degree ?

(0

(ir)

MEC-003

8, Suppose a population consists of 5 distinct elements.If you draw a sample of size 3 from this populationusing non-replacement sampling method, what wouldbe the number of samples you could draw ?

9. What economic interpretation would you attribute tothe method of finding the 'time path' through adifference equation ? Explain your view with the helpof Cobweb model.

1O. Two random samples give the following informationon weights in kg of a group of boys and girls.

Boys Girls

Sizeof sample 300 625

Mean 145 150

S,D. 2 5

Do you think that the girls are significantly heavierthan the boys ? What are the assumptions underlyingyour test ?

MEC.OOS

sEcTroN c

Answer ony taoo questions Jrom this section-2x70:20

1 1. (i) Given the following data, estimate the

regression equation X = cr + BY.

N = 42; rX = 1978; :,Y = 2135;>XY :102847.tX2 = 9232izYz : t:73gg

(ii) The marginal revenue function of a firm is

given as MR = 8 - 6x - 2x2 . Find the total

revenue and demand curves.

f 2. (i) Differentiate behueen ;

(a) Differentiation and Integration

(b) Stratified and Purposive sampling

(ii) Define the {ollowing terms :

(a) Saddle point

(b) Type II error

MEC-003

13. (i) (a) Solve the equation

3y2dy - td t = o

(b) Find the probability of getting tuuo

when two unbiased coins are tossed.

(ii) Solve the equation

Vt+1 = Vt + I given the initial condition

Y o = o

MEC-O03

No. of Printed Pages : 5 I MEC-004


Term-End Examination 02553 December, 2011

MEC-004 : ECONOMICS OF GROWTH AND DEVELOPMENT


Note : Attempt questions from the sections as directed.

SECTION - A (Long Answer Questions)

Answer any two questions from this section. 2x20=40

1. Describe the structure of the Solow model of economic growth. Compare the Solow model with the Harrod - Domor model.

2. Describe Joan Robinson's model of economic growth. Discuss its drawbacks.

3. Critically examine Schumpeter's theory of capitalist development through innovations.

4. Discuss Marx's theory of economic development. Do you think it marks an improvement over Ricardo's theory of development ? Give reason for your answer.

MEC-004 1 P.T.O.

SECTION - B (Medium - length Answer Questions)

Answer any five questions from this section. 12x5=60 5. Discuss the capital turnover and the time - series

criteria for investment in developing nations.

6. Bring out the role of social norms and the community in economic development.

7. Critically examine the Prebisch - Singer and Myrdal thesis of deteriorating terms of trade.

8. What do you understand by an endogenous growth model ? Discuss briefly Romer's contribution to endogenous growth theory.

9. What are the properties that a suitable measure of income inequality should possess ? Explain Lorenz curve and the Gini coefficient.

10. Describe the Lewis model of economic development. How does it differ from Boeke's theory of dualism.

11. Explain the concept of government failure and point out the factors responsible for it.

12. Critically examine Real Business Cycle Theory.

MEC-004 2


MASTER OF ARTS (ECONOMICS)..o


June, 2010O

MEC-004 : ECONOMICS OFGROWTH AND DEVELOPMENT



SECTION - A

(Long Answer Questions)


What do you mean by economic growth ? Brieflyexplain the significance of economic growth.How do we measure economic growth ?

Critically explain the Kaldor's model of economic

growth.

Explain the concept of choice of techniques.

Briefly discuss the various approaches to choiceof techniques.

Explain nature and scope of planning ? Discussvarious kinds of planning.

MEC-004

1 P.T.O.

SECTION - B(Medium-length Answer Questions)

Answer any five questions from this section : 5x12=60Briefly discuss Lewis model of economic growth.

Critically explain 'Big Push' theory to overcomethe obstacles of development.

Analyse Schumpeter's theory of capitalistdevelopment through innovations.

Critically describe the Ricardian theory ofdevelopment.

Explain the concept of cost-benefit analysis. Whatare the reasons for divergence of private costs andsocial costs ?

Differentiate between equalities and inequalities.How do we measure the inequalities of income ?

"Human resources are both instruments and goalsof economic development". Discuss:

Explain golden age of accumulation as explainedby Joan Robinson.

13. Explain the concept of money as discussed in theneo-classical growth model.

MEC-004 2

|q

co


Term-End Examination]une, 2009


Maximum Marks : L00Time : 3 hours


1 .

SECTION - A

Answer any tzoo questions from this section in about

600 words each : 2x20=40

Distinguish between Harrod and Domar models

of economic growth. Why are they clubbed

together ? Bring out the major limitation of the

Harrod-Domar model.

2. \44rat is meant by total factor productivity ? Why

is i t considered to be bet ter than par t ia l

productivity ? Give an outline of the approaches

to measure total factor productivity.

MEC-004 P.T.O.

J ,

4 .

Dist inguish between economic gror.nrth and

economic deve lopment . Br ie f l y d iscuss the

impor tan t methods o f measur ing economic

welfare through composite indices.

Br ing ou t the l inks be tween t rade and

deve lopment . Does t rade he lp deve lop ing

countries ? Substantiate your answer.

MEC.OO4

6 .

SECT{ON" . 8

Ansroer anu fkte questi*ns from this sectiau irc about

3AA words each : 5x1"2=60

Critically exan-iine the Malthusian tl-leory of

economic devei*pment"

lVhat aie ihe factors thai f ind piace in

Leibensteir,,'s theor',v cf critical minimum effect ?

On what glounei is the aborre theory criticised ?

Bring out the sal ieni . features of endogenous

growth modeis. In i ,vhat respects are they

different from neoclassical growth models ?

In the i\{arxian framework explain how the rate

of profit has a tendency to decline. IA'hat are itsimpiications ?

What is meant by Technical change ? Discuss

Harrod's classification of technical change.

Explain the Harris-Todaro model and examine

its relevance to developing countries.

Explain the concept of 'golden rule' in

neoclassical growth rnodel.

Write short notes on anu tzua of the following :

(u) Theory of sociai dualism

(b) Sen's approach to choice of technique

(.) Distinction between indicative planning and

imperative planning

- o 0 o -

7.

9 .

10.

1 1 .

12.

MEC-OO4 P.T.0.

I MEC-004 I


N Term-End Examination

December, 2009




SECTION - A

Answer any two questions from this section in about 600

words each. 2x20=40

Analyse the Ramsey model of economic growth.In what way does the Cass - Koopmans modelextend the Ramsey model ?

Explain Kaldor's model of economic growth.What modifications does Pasinetti bring to thismodel ?

Explain the salient features of the Solow model ofeconomic growth. How does the model changeif the savings rate is allowed to vary ?

"Terms of trade of the developing economies tendto decline over time". Examine the abovestatement in the light of the Prebisch - Singer -Myrdal thesis.

MEC-004

1 P.T.O.

SECTION - B

Answer any five questions from this section in about 300

words each. 5x12=60

What are the determinants of choice oftechnique ? Explain Maurice Dobb's approachto choice of technique.

Explain the various elements that should be takencare of while designing a plan model.

Critically examine the low level equilibrium traptheory put forth by R.R. Nelson.

Distinguish between embodied and dis - embodiedtechnical change. Discuss Hicks' classification oftechnical change.

Explain the concept of effective rate of protection.How is it calculated ?

What is meant by golden age according toMrs. Joan Robinson ? What are the criticismslevelled against the concept of golden age ?

What is meant by human development index.How is it constructed ?

Write short notes on any two of the following :Government failureRole of social norms in economicdevelopment

(c) The concept of shadow price.- o 0 o -

MEC-004 2

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- 0 0 -

MEC-004 4

lMEc4o4l

Mr\sTER OF ARTS (ECONOMrcS)


June, 2OO8

MEC-004 : EGOM)MIGS OF GROWTH ANDDEVELOPMENT

Time : 3 hours

Note: Attempt questions from eoch section os directed.

SECTION A

(Long Answer Questlons)

Answer any two questions frcm this *. on. 2x2O=4O

l. Discuss Kaldor's model of economic growth. In what way is

Paslnetti's theory of growth diflerent from that of Kaldor ?

' 2. Discuss the various approaches to the measurement ol

total factor productMty.

3. Analyse the Ramsey model of economic grovuth. Explain

the "Golden Rule of Capiial Accumulation". ln u*rat way

does the Cass-Koopman's model of economic grourth

:xtend the Ramsey model ?

MEC-OO4 I

Maximum Morks : I00

P.T.O.

\

Discuss Marx's theory oI economic development. Do youthlnk lt rrnrks an improvement owr Ricardo's theory ofdevelopment ? Give reasons for 1rcur ansler. . : .

MEC-OO4

SECTION B(Medtum-Length Answer QueCions)

Ansuer ony fiue guestlons lrom thls section. 5x72-6O

5. Discuss the 'Critical Minimum Effort' theory. Also bririg outits limitations.

l6. E:<plain the Hanis - Todaro model and examind its

relelrance. .

, . ;

7. Critically examine the Social Marglnal Productivity c{itdrlonof in\ esbnent in deueloping nations.

E. Describe the static gains that a nation can obtain from

foreign t-ade.

9. Discuss how the role of monev can be introduced in the

Solory model,

1O. Dlscrss Hicks's classification oI technical change.

11. Examine Gary Field's ohsenrations on the relationslrip

beturein economic growth and inequalites in developing

nations.

12. Disclrss the concept oI market failure.

13. Explatn the concept of effective raie of protection. Horl is

it caloiated ?

4,O00MEC-OO4

MASTER OF ARTS (ECONOMTCS)


December, 2OO8

MEC-004 : ECONOMICS OF GROWTH ANDDEVELOPMENT


Note : Attempt questions from eoch section ds

directed.

SECTION A


Answer ong froo questions from this section-2x20:40

1. Discuss Harrod's model of economic growth. How

does this model explain the occurrence of trade

cycles ?

2. Describe Joan Robinson's model of economic groMh.

What are its main drawbacks ?

MEC-004

3.

4 .

Discuss the capital fumover and the time-seriescriteria for investment in developing nations.

Discuss the two-sector growth model of Hirofumi

Uzawa. How does this model differ from Feldman'shrJo-sector qrowth model ?

5.

6 .

7.

SECTION B

(Medium-l,ength Answer Questions)

Answer ong Jiue questions from this section.5x12=60

Discuss the concept of government failure. How does

it di{fer from market failure ?

Bring out the role of social norms and the community

in economic development.

Critically examine the Prebisch - Singer and Myrdal

thesis o{ deteriorating terms oJ trade.

8. Explain the concept ol poverty trap. How can the

Solow model be used to analyse the emergence oI

poverty traps ?

9. How would you measure total factor productivity

using growth accounting method ?

1O. What do you understand by endogenous groMh

model ? Discuss briefly Romer's contribution to

endogenoqs grou,th theory.

11, What are the basic properties that a suitable measure

of income inequality should possess ? Explain Lorentz

curve and the Gini coef{icient.

MEC-Oo4 P . T , O .

12. Discuss the basic demographic characteristics ofdeveloping countries and explain how do they affectthe nature of the population problem in thesecountries.

13. Briefly describe the Lewis model of economicdevelopment. How does it differ lrom Boeke's theoryof dualism ?

MEC-004




December, 2011 00 CO CT) MEC-005 : INDIAN ECONOMIC POLICY C\J C) Time : 3 hours

Note : Attempt questions from each section as per instructions given.

SECTION - A

Note : Attempt any two of the following questions in about 700 words each : 2x20=40

1. State the various forms of privatisation. Critically 20 examine the problems associated with privatisation in India.

2. "Declining share of agriculture in GDP in India 20 has not been accompanied by corresponding decline in workforce in agriculture." - comment.

3. Distinguish between Human Development index 20 and human poverty index. India's rank in terms of GDP per capita has improved but, its relative rank in HDI has not changed much why ? What are policy implications ?

Maximum Marks : 100

MEC-005

1 P.T.O.

4. Distinguish between foreign direct investment 20 and port folio investment. Would you advocate a policy of encouraging investment by multinationals in India. Explain with reasons.

MEC-005 2

SECTION - B

Note : Attempt any five questions from this section

in about 400 words each : 5x12=60

5. Examine the consequences of decline of 12 investment in agriculture in India in recent years.

6. Do you think that total factor productivity in 12 post-reform period has declined in India. Explain with reasons.

7. Distinguish between social infra-structure and 12 economic infra-structure ? Evaluate the policy towards development of social infrastructure in India.

8. State in brief the principles of federal finance. 12 How far the centre-state financial relations in India adhere to these ?

9. "Black economy is one of the major factors 12 responsible for ineffectiveness of many of our economic policies." Comment.

10. "An effective delivery system has to ensure 12 people's participation." Comment.

MEC-005

3 P.T.O.

11. Make a brief assessment of trade liberalisation 12 policy pursued in India since 1991.

12. Explain any three of the following : (a) World Trade organisation (b) Primary deficit

(c) Employment elasticity

(d) Gadgil formula

(e) Second. Generation Reforms (f) Marginalised sections

3x4=12

MEC-005 4

MEC-005No. of Printed Pages : 8


Term-End ExaminationO

June, 2010

O MEC-005 : INDIAN ECONOMIC POLICY


Note : Answer the questions as per instructions given for each

section.

SECTION - A



What is an 'economic policy' ? What are itsdifferent forms ? Why do we need state

intervention in the economic affairs of a country ?

"There has been no uniformity of views about the

necessity for Privatisation. Controversies aboundwith regard to the mode of disinvestment.Ultimately, the issues relating to disinvestmentturn around three questions - why, how and howmuch". Explain this statement.

MEC-005

1 P.T.O.

Make a case for inviting foreign capital in India.Critically evaluate the Government policy toencourage inflow of foreign capital. Also indicatethe hurdles in the way of foreign investment.

Examine the role of Planning Commission inreducing regional disparities in India. In thiscontext also examine the role of FinanceCommission.

MEC-005 2

SECTION - B

(Medium Answer Questions)

Answer any five questions from this section : 5x12=60

"No economy is strong enough to stop the tide ofglobalisation and neither is there a viablealternative. As such, what Government must dois to embrace globalisation, and strengthendomestic institutions to cope with the strains itplaces upon the society". Examine this statement.

Do you consider that the agricultural sector inIndia still continues to be the back bone of theIndian economy ? Also comment on the fact thatthe declining share of agriculture in GDP has notbeen accompanied by commensurate decline inwork force in agriculture.

What do you mean by infrastructure ? What areits different forms ? Do you agree that inadequateavailability of infrastructure has adverselyaffected the growth process in India ?

Unlike many other central banks, why is it

difficult for the RBI to adopt price stability as thesingle objective of monetary policy ? Also examinethe mechanism of RBI intervention in the moneymarket.

MEC-005 3 P.T.O.

Do you think that the collaboration between thelaw violators and law - makers on one hand andenforcers on the other has been strengthening theblack economy ? Give reasons in support of youranswer.

Point out the available delivery mechanism in

implementation of economic policies. How domeasures of good governance ensureimplementation of economic policy ?

Examine the important changes in the valuecomposition and direction of India's foreign tradeduring the post-reforms period.

Explain any two of the following :

World Trade Organisation (WTO)

International Monetary Fund (IMF)

(c) Value Added Tax (VAT)

13. State, in brief, the principles of federal finance.

Why have the question of centre-states relationsbecome the focal point of discussion ?

MEC-005 4

r)6r<t'

:



june, 2009

MEC-005 : INDIAN ECONOMICS pOLICy

Time : 3 hours Maximum Marks : lA0

Note : Attempt questions fi.om each section as directed.

SECTION-A

Attempt nny two questions front this section in ahout500 uords each : 2x20=40

Examine the changes in the structure of India,sNational Income since 1960-61,. Explain theimplications of these changes for wide spreadpoverty and inequality in India.

State the constituents of economic reforms. Towhat extent the reform process has succeedecl inachieving the economic and social objectives ?

L .

2.

20

2A

MEC.O05 P.T.O.

J . Critically examine the various repercussions of

shrinking land base and declining land access'

How far the poiicy measures taken by the

Government of India have been effective in

putting a halt to shrinking land base ?

'An effective delivery system has to ersure people's

part icipation'. In the l ight of this statement

examine the role of pressure groups in the effective

implementation of economic policies' Give

illustration in support of your answer'

2A

204 .

MEC.OO5

5 .

6 .

SECTION-B

Ansr.uer sny fiwe qtttstians lrom this section in abatLt3AA wards e,ncit : 5x12=60

Examine the features of inter_regionai cropping 12pattern in India.

Evaluate the diversificatior"r that has taken place Xzin the industriai sector cluring the pre_reformperiod.

How is soc ia l in f ra -s t ruc tu re d is t inc t f rom Lzeconomic infra-structure ? Evaluate the growthof economic infra-structure in India.

Identify the institutionar reforms introduced in theCapital market. How have these reforms affectedthe Indian Security Market ?

"The fiscal position of the State Governments hasbeen under stress since mid 19g0s,, * Comment.

What is the difference between Foreign DirectInvestment and portfolio Investment ? Evaluatethe Government policy towards foreign capital inIndia.

Explain with example the nexus between toprungs of bureaucracy, politicians and corporatepromoters as explanatory factor for blackeconomy.

,7

8 .

9 .

10.

L 1 .

1 2

1 2

1 2

t 2

MEC-OO5 P.T.O.

't2. Explain any three of the following :

(u) Consumerism

(b) Inter-State Counci l for Centre-State

Relations

(.) Fiscal Deficit

(d) Performance Budget

(") Dematerialisation

(f) Reserve MoneY

- o 0 o -

3x4='j"2

MEC-OO5

I MEC-005 I


Term-End Examinationc\1 December, 2009OO

MEC-005 : INDIAN ECONOMICS POLICYO


Note : Answer the questions as per instructions given for each

section.

SECTION - A

Attempt any two questions from this section in about

500 words each.

What do you mean by inequality ? How isinequality of income measured ? Explain theimplications of prevailing levels of inequality inIndia. 5+5+10=20

What is the difference between unemploymentand under - employment ? Examine the variousdimensions of deterioration in the quality ofemployment in India since 1977-78. 5+15=20

MEC-005 1 P.T.O.

Critically examine the roots, process andinter - connection of black economy in India. 20

What is the distinction between primary marketand secondary market ? State the problemsassociated with Indian equities market as of 1992.To what extent these problems have beenovercome by the reforms introduced in the Indiancapital market ? 5+15=20

MEC-005 2

SECTION - B

Attempt any five questions from this section in about

300 words each.

Briefly discuss the salient features of changes in 12the cropping pattern in India.

Examine the overall performance of small scale 12

industry sector in terms of growth, production andexports.

Discuss the basic demographic features of India. 12

"The fiscal position of the state governments has 12

been under stress since mid 1980s." - Comment.

What do you mean by infrastructure ? Evaluate 12

the growth of social - infrastructure in India.

Critically examine the role of MNCs in a 12

developing economy.

11. How is WTO different from GATT ? Examine 12

the impact of WTO on Indian economy.

MEC-005 3

P.T.O.

12. Explain any three of the following : 3x4=12

De - mutualisation

Value Added Tax

Performance Budget

De - Nationalisation

Poverty Gap Index

Non - Government Organisations (NGOs)

- o 0 o -

MEC-005


Term-End Examinadon

June, 2OO8

MEC-fi,S: INDIAN ECONOMIC POLICY

TIme : 3 hours Maxlmum Marks ; 7b0

Note ; Answer the guesllons as per instrucuons glven loreach section.

SECTION A

Attempt ony trro guestions lrom thls setton in obout

500 words each. 2y20:40

l. State the altemative me:lsures of poverty that take note of

income as urell as non-income aspects of po@rty. E(amine

the inter-State variations in the performance of Human

Development Index and Human Poverty Index in India. 20

2. ln the wake of economic reforms, do you think that the

gor€mment has abandoned the objective of social justice ?

Give reasons in support of your answer. 20

MEC-OO5 P.T.O.

4.

F:<amine the growth of production and agrio:lturalproductivity in krdia. Which policy measures would you liketo suggest for susbined and steady growth of agriculturalprodwton in the near fuhue ?

"Apart from the need to get the sector contribute rnore tothe excheqr.rer, the case for bdnglng servic€s under taxationrests also on consideration of elficiency and equlty." -

Comment.

MEC-OO5

5.

7.

SECTION B

Answer any ,iue questions lrom thls section in obout

300 vnrds each. 5x72=60

5. Do you think that economic policy in India is purely a

political process ? Giw reasons ln support of !'our

an$,ver.

Critically examine the employment policy embodied In the

recent {ive year plans.

Critically examine the diversification of industrial sector in

India during the post-reform period.

Discuss the key strategies of Foreign Trade Policy

2004 - 09.

9. How does black elonomy enhance consumertsm in the

society ?

1O. Which administratlu€ reforms would you like to suggest to

encounter bureaucratic hurdles in the implementation of

economic policies ?

11. E<amine in brief the trends in India's balance of payments

since 1990-91. 72

72

72

72

72

72

E.

MEC-OO5 P.T.O.

12. Explain any three of the folkuing : Jx4=72

(i) Economic Danelopment Indo<

(ii) Contract farming

(iii) Crosszubsidisation

(iv) Disinveshnent

M Capability poverty measure

(vi) Socialinfrastnrture

MEC-OO5 4 4,OOO



December, 2OOB

MEC-005 : INDIAN ECONOMIC POLICY


Note : Answer the questions os p€r instructionsgiuen Jor each section.

SECTION A

Answer any tu)o questions from this section in

about 500 words each. 2x20=40

1. What do you mean by regional inequalities ? Examine

the regional variations in income and consumption in

India. 5+15=20

2. Identify the current issues and concems of lndian

agriculture. How far have the measures taken by thegovemment been effective in putting a halt to

shrinking land base and declining access to land ?

MEC-005

5+75=20

3. Do you think that black economy is one of the major

{actors responiible for the inef{ectiveness of many of

our economic poticies ? Give reasons in support of

your answer. 5+15=20

4. "States should have their due share in responsibilities

as well as in rights." In the light of this statement,examine the important issues of fiscal federalism in

lndia. 20

MEC-005

5.

6.

7 .

SECTION B

Answer any fiue questions from this section inabout 300 words each. 5x72=60

Examine the 'r,arious dimensions of deterioration in

the quality of employment in India. 12

Give a brief account of trends in India's balanca ofpayments during 1990 - 91 to 2004 - 05. 12

What do you mean by fiscal imbalance ? What steps

have been taken bv the Central Government in lndiato overcome its fiscal imbalances ? 4+8=72

8. Critically examine the Government of India's policy

towards foreign capital.

Explain how far India has

membership of the World(wro)

, 1 2

benefited {rom the

Trade Organisation

1O. Explain in brief the various instruments ol economicpoliry in India.

11. To what extent have the well-being and welfare of thepeople improved during the iive year plans in lndia ?

1 2

MEC-OO5

12

12. Explain any three of the following :

(i) Economic Development lndex

(ir) Human Development Index

(iii) Privatisation

(iv) Economic infrastructure

(v) Contract farming

(vi) Crosssubsidization

3x4=72

MEC.OOS

Mec

Documents

end examination

end examination

pareto efficient

micro economic

production

mixed strategy

write short

micro economic