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120 questions · 120 marks · 2 hours
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Correct answer: (C) When the point is the midpoint of the demand curve
On a straight-line demand curve the point elasticity is one exactly at the midpoint—above it greater than one, below it less.
Correct answer: (A) Production in comparison to consumption
The classical economist prefers production to consumption, holding that a nation's wealth grows by producing.
Correct answer: (C) P > MC = MR
A monopolist is in equilibrium at MR = MC, but his demand curve slopes down, so the price stays above marginal revenue—that is P > MC = MR.
Correct answer: (B) Low
Under discriminating monopoly the monopolist keeps the price low in the market where demand is more elastic, so as to sell more there.
Correct answer: (C) MR₁ = MR₂ = MC
Under discriminating monopoly there is equilibrium when the marginal revenues of the two markets are equal to each other and to marginal cost—MR₁ = MR₂ = MC.
Correct answer: (B) AR > MR
Under monopolistic competition the demand curve slopes down, so average revenue stays above marginal revenue (AR > MR).
Correct answer: (A) Price acceptors
In perfect competition the industry fixes the price and the firm takes it, so firms are price acceptors.
Correct answer: (C) Mrs. Joan Robinson
This definition of price discrimination is Mrs. Joan Robinson's.
Correct answer: (C) To some extent it applies in every economic activity
The law of diminishing returns applies to some extent in every economic activity, not to agriculture or industry alone.
Correct answer: (E) None of the above
Under monopolistic competition firms are part of the group and each fixes its own price—no statement given holds, so the answer is ‘None of the above’.
Correct answer: (B) Perfectly elastic
Perfect competition prevails when the demand for each producer's output is perfectly elastic, that is when his demand curve is a horizontal line.
Correct answer: (B) Pigou
This definition of national income is Pigou's, counting only the income that can be measured in money.
Correct answer: (D) More than one of the above
National income is written from the expenditure side as C + I + G + (X − M) and from the income side as C + S + T, and the two are equal—so the answer is ‘more than one’.
Correct answer: (A) P = ATC
Under monopolistic competition the firm earns only normal profit in the long run, the price coming down to average total cost (P = ATC).
Correct answer: (C) Both are funding agencies for social and economic issues
The Census of India and the National Sample Survey are both national agencies that collect and process data; they do not fund social and economic research—so that is the statement which is wrong.
Correct answer: (C) Monopolistic competition
Few sellers and buyers, goods that are not homogeneous and incomplete knowledge of the market are the marks of monopolistic competition.
Correct answer: (B) Non-sampling error
Errors arising in the process of acquiring the data are called non-sampling errors; a sampling error comes from the choice of the sample.
Correct answer: (A) NNP = GNP − Depreciation
Net national product is gross national product less depreciation—NNP = GNP − depreciation.
Correct answer: (A) Temporal classification
When data are grouped according to time, the classification is called temporal.
Correct answer: (A) High
Under discriminating monopoly the monopolist keeps his price low in the market where the elasticity of demand is high.
Correct answer: (D) More than one of the above
Price discrimination is made possible by the nature of the goods, by the particular consumer and by legal acceptance alike, so the answer is ‘more than one’.
Correct answer: (C) APC + APS = 1
The average propensity to consume and the average propensity to save add up to one—APC + APS = 1, since whatever income is not spent is saved.
Correct answer: (C) $28, $38·6
In FY2023 net FDI inflows fell to about $28 billion, from $38·6 billion in FY2022.
Correct answer: (A) 2·3 thousand MW
In 1950–51 the country's electric production capacity was only 2·3 thousand MW.
Correct answer: (A) The column’s division into ten equal parts is known as a decile
The values dividing the column into ten equal parts are the deciles, and option 1 states that correctly.
Correct answer: (A) $1·3 billion or 2% of GDP
In the January–March quarter of 2023 India's current account deficit narrowed to about $1·3 billion, that is 2% of GDP.
Correct answer: (B) Full employment
Keynes's employment theory is short-period, favours government interference and holds that full employment is not the normal state—so ‘full employment’ is not true of it.
Correct answer: (B) ₹9,640 crores
Of the ₹56,415 crores under the Special Assistance Scheme, Bihar received ₹9,640 crores.
Correct answer: (D) More than one of the above
Casteism, the law of inheritance and the joint family system are all counted among the social causes of poverty in India, so the answer is ‘more than one’.
Correct answer: (C) 1951
The Central Statistical Organization was established in 1951.
Correct answer: (A) Micro Units Development and Refinance Agency
MUDRA stands for Micro Units Development and Refinance Agency, which lends to small units.
Correct answer: (C) Both applied economics and theoretical economics
International economics has its theory and the practical application of that theory alike, so it is called both applied and theoretical.
Correct answer: (A) ₹1,50,326
On the 2011–12 series, per capita income at current prices in 2021–22 was ₹1,50,326.
Correct answer: (C) Time
In a chronological classification the data are grouped on the basis of time—by year, month or day.
Correct answer: (A) Primary data
Data gathered at first hand for an investigation are called primary data.
Correct answer: (D) More than one of the above
By Schumpeter, economic equilibrium takes in the stable, the unstable and the neutral kind, so the answer is ‘more than one’.
Correct answer: (D) More than one of the above
Consumer's equilibrium is analysed by cardinal utility, by ordinal utility and by revealed preference alike, so the answer is ‘more than one’.
Correct answer: (C) AR is equal to MR
In perfect competition the price stays constant, so average revenue equals marginal revenue (AR = MR).
Correct answer: (C) Social accounting method
The modern method of estimating national income is social accounting, in which accounts are drawn up for the whole economy.
Correct answer: (B) Boddington
“Statistics is a science of estimates and probabilities” is Boddington's definition.
Correct answer: (B) 1881
India's first official—simultaneous—census was that of 1881; the 1872 count was not taken across the country at one time.
Correct answer: (C) Classification
Arranging related facts into classes is classification; diagrams and graphs are only ways of presenting them.
Correct answer: (B) 1991
Liberalization, privatization and globalization are the main parts of the New Industrial Policy of 1991.
Correct answer: (B) 1956
The Life Insurance Corporation of India was incorporated in 1956, when life insurance was nationalized.
Correct answer: (E) None of the above
By the 2011 Census Bihar's literacy rate was 61·80%, which is not among the options—so the answer is ‘None of the above’.
Correct answer: (B) Central Statistical Organization
National income statistics are collected by the Central Statistical Organization.
Correct answer: (C) M₃
By the Reserve Bank's standards broad money is M₃, which takes in currency with the public, demand deposits and time deposits.
Correct answer: (B) A change in one variable accompanied by a change in the other variables
Correlation means that a change in one variable is accompanied by a change in the other; it need not be read as cause and effect.
Correct answer: (A) Gottfried Achenwall
Gottfried Achenwall is called the father of statistics, having given the word ‘statistik’.
Correct answer: (C) Collection of data
The order of a statistical investigation is planning, collection of data, editing, classification. Here collection is put third, so that is the stage out of order.