NTA UGC NET/JRF Exam, June 2019 Economics (Shift-II)

Total Questions: 100

1. Match List-I with List-II:

Correct Answer: (d) A-iii B-ii C-i D-iv
Solution:

2. Which of the following statements are true regarding Cobb-Douglas production function?

A. It is long period production function
B. It is short period production function
C. It is based on increasing returns to scale
D. Output elasticities with respect to factors are constant
Select the correct option:

Correct Answer: (b) A and D
Solution:

Cobb-Douglas production function-
Q = ALαCß, where Q is output; L & C are inputs of labour and capital respectively. A, a and b are positive parameters where = α > 0, B > 0, A = total factor productivity.
Q depends directly depends upon L & C.
1. It is long period production function.
2. Output eleasticities with respect to factor are constant.

3. Which of the following methods of selecting a strategy is consistent with risk averting behavior?

Correct Answer: (a) If two strategies have the same expected profit, select the one with smaller standard deviation
Solution:

When selecting a strategy, the method that is consistent with risk-averse behavior is to choose the strategy with the smaller standard deviation if two strategies have the same expected profit.
Risk aversion is a tendency to avoid risk and have a low tolerance for it. Risk-averse investors tend to:
Prioritize the safety of their principal over the possibility of a higher return on their money.
Prefer liquid investment, like CD's, savings accounts. and municipal and corporate bonds.

4. Under non-cooperative games, it is

Correct Answer: (c) essential to understand one's opponent's point of view and to deduce his likely responses accordingly
Solution:

Under non-cooperative games it is. Essential to understand one's opponents' point of view and to deduce his likely response accordingly.

A non-cooperative game is a mathematical model used to study strategic decision situation where players don't cooperate or for alliances. In these games, there are no external rules or binding agreements that force players to cooperate.

5. Question Numbers : (5 to 7) Go through the following paragraph and diagram and answer the questions given below: Monopoly charges a price above marginal cost, not all consumers who value the good at more than its cost, buy it.

Thus, the quantity produced and sold by a monopoly is below the socially efficient level. The deadweight loss represented by the area of the triangle between the demand curve and the marginal cost curve.
What price will be charged under monopoly?

Correct Answer: (c) OE
Solution:

OE price will be charged under monopoly.

6. Which is the socially efficient level of production?

Thus, the quantity produced and sold by a monopoly is below the socially efficient level. The deadweight loss represented by the area of the triangle between the demand curve and the marginal cost curve.

Correct Answer: (b) OX²
Solution:

OX² is the socially efficient level of production.

7. Deadweight loss is represented by the area of

Thus, the quantity produced and sold by a monopoly is below the socially efficient level. The deadweight loss represented by the area of the triangle between the demand curve and the marginal cost curve.

Correct Answer: (d) BAC
Solution:

Deadweight loss is represented by the area of BAC.

8. The firms are competitive and profit maximizing the demand curve for labour is determined by

Correct Answer: (b) the value of marginal product of labour
Solution:

When firms are competitive and profit maximizing, the demand for labour is determined by the value of the marginal product of labour.

Competitive firms take the market wage rate as given.
The optimal level of output is determined by the marginal revenue product of labor.
The quantity of labor demanded is determined by the value of the marginal product of labor.

9. General equilibrium analysis determines

Correct Answer: (b) prices and quantities in all markets simultaneously and explicitly takes feedback effects into account
Solution:

General equilibrium analysis is the branch of economics concerned with the simultaneous determination of prices and quantities in multiple interconnected markets.
It constrasts with partial equilibrium analysis-models that consider only a single sector.

10. Pareto's marginal condition for efficiency in composition of output (product-mix)requires

Correct Answer: (c)
Solution:

The marginal conditions for a Pareto optimal or efficient composition of output requires that the MRPT (Marginal rate of Product Transformation) between any two commodities be equal to the MRS between the same two goods. MRPT says that rate atwhich a good can be transferred into another.

Pareto's marginal condition for efficiency in composition of output (product mix) requires.