W.B.C.S Main 2006 Optional Question Paper Economics.

W.B.C.S Main 2006 Optional Question Paper Economics paper 1

Group – A.Continue Reading W.B.C.S Main 2006 Optional Question Paper Economics.

1. What is the difference between :

(a) Real and Nominal prices ;

(b) Perfect Substitutes and Perfect Complements ;

(c) Short-run and long-run elasticities ;

(d) Micro-economics and Macroeconomics.

2.  Answer the following :

(a)  Show that the elasticity of demand is the same at all points on the demand curve q = cp°

(b)  The demand for a commodity is given by p = a + bq.  Prove that the slope of the marginal revenue associated with a linear Marshallian demand curve is always twice that of the demand curve.

(c)  Given    Y = C + I + G

c = Co + bY,

I = Io

and   G = Go

Where Co = 135,   b = 0.8,   Io = 75,   and Go = 30

(i) Find the equation for the equilibrium level of income in the reduced form,

(ii) Solve the equilibrium level of income

(a) directly,    (b) with the reduced form.

(iii)  Find the profit-maximizing level of

(a) output,    (b) price, and     (c)  profit for a monopolist where demand functions are given as

x = 50 – 0.5  P ……..(eqn. 1)

y = 76 – Py  …………. (eqn. 2)

and the total function

C = 3×2 + 2xy + 2y2  + 55 ……….. (eqn. 3)       5×4 = 20

3.  The marginal cost pricing has some limitations. That is why the firms like to adopt average cost pricing technique and follow the so-called ‘Mark-up Rule’ method.  Explain average cost pricing method along with the Mark-up Rule.     20

4.  Define bilateral monopoly.  How is price determined under bilateral monopoly ?   Do you think game-theoretic strategy can throw some light on the pricing process ?     16+4

5.  The quantity theory of money emphasises the substitution of money for goods. The Keynesian approach by contrast, emphasises the substitution of money for bonds or, more generally, interest-bearing financial assets. —Discuss.

Group – B

6.  (a)  Explain the complete Keynesian model of income determination with the help of given LM and IS Schedules.  Draw diagram,

(b)  What are the weaknesses of the model ?      16+4

7.  In both Keynesian and Classical macroeconomics a cut in money wages will raise employment if, and only if, it reduces the real wage. —Explain.   Why does a cut in money wages always reduces the real wage in classical economics, but not in the Keynesian system ?      20

8.  Answer any two of the following :

(a)  According to the Harrod-Domar model, if the marginal output/capital ratio is 0.5, the saving rate is 0.2, and the foreign aid to GNP is 0.5, what will be the equilibrium growth rate of output ?   Give reasons,

(b)  In a Cobb-Douglas neoclassical growth model with constant returns to scale, the elasticity of labour is 0.60.  If labour remains constant while capital increases by 5%,  how much will the output increase ?   Give reasons,

(c)  Under perfect competition wnen does the price system ensure an efficient output selection ?  Give reasons,

((d) Assume that you are a New Classical theorist.  What will, according to you, be the impact of a contractionary Fiscal policy ?   Give reasons.      10×2 = 20

9.  Briefly discuss the following :      5×4 = 20

(a) Vertical equity,

(b) Tax-push inflation,

(c) Spread effects,

(d) Tariff.

10.  What are some of the assumptions on which the Heckscher-Ohlin theory of trade is based ?  Why does the Heckscher-Ohlin model needs to be extended ?     15+5

Group – C

11.  Critically examine the ‘Big-Push’ theory of economic development.     20

12.  Trace the relationship between the marginal revenue and the price elasticity of demand.  Use algebraic manipulation to prove the result.     20

W.B.C.S Main 2006 Optional Question Paper Economics paper 2

Group – A

(Answer any three questions.)

1.  Define ‘economic drain.’  How would yon account for it ?   Do you think it was responsible for India’s, economic backwardness ?     4+8+8

2.  How Would you explain the enormous growth of foreign trade in India in the 19th Century ?  What was its impact on the Indian economy and its people ?     12+8

3.  Why was the Village Community called the backbone of India’s economy ?  What did the British do to weaken it ?     10+10

4.  Why is it that the Tatas came out so successfully with the Iron and Steel Industry ?  Was it due to ‘economies’ available from ‘location’ alone ?     12+8

5.  Do you subscribe to the view that India’s poor economic performance and low productivity of agriculture can be ascribed to poor attention paid to land reform both before and after independence ?

Group – B

(Answer any two questions.)

6.  Why is it that the Indian economy did not experience continuous growth during plan period ?     20

7.  Define Infrustructure.  Discuss its role in the economic development of India under globalization.     14+6

8.  How would you account for the excessive growth of foreign exchange reserves in India ?  What sort of problems such growth may create for the economy ?   How would you address them ?       3+6+6

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