UGC NTA NET/JRF Exam, December-2024 Economics

Total Questions: 100

51. Match List-I with List-II:

List-I (Concept/Theory)List-II (Economist)
A. Life Cycle HypothesisI. Karl Marx
B. Cash Balance ApproachII. François Quesnay
C. Organic Composition of CapitalIII. Alfred Marshall
D. Tableau EconomiqueIV. F. Modigliani

Choose the correct answer from the options given below :

Correct Answer: (b) A-IV, B-III, C-I, D-II
Solution:
List-I (Concept/Theory)List-II (Economist)
A. Life Cycle HypothesisIV. F. Modigliani
B. Cash Balance ApproachIII. Alfred Marshall
C. Organic Composition of CapitalI. Karl Marx
D. Tableau EconomiqueII. François Quesnay

52. Which of the following is NOT true?

Correct Answer: (b) Public borrowing reduces consumption.
Solution:

Statements 1, 3, and 4 are correct, while statement 2 is incorrect.
Public borrowing, on one hand, will reduce private investment due to the crowding out effect, but on the other hand, expenditure on public goods will increase income, which will in turn increase consumption.

53. Ecological Footprint refers to :

Correct Answer: (d) The measure of the pressure exerted by humans on the natural resources available to them in their environment.
Solution:

The Ecological Footprint is a measure of the impact that an individual or a group of people has on their environment.

It represents their demand on natural resources and the pressure they exert on the ecosystem's capacity to regenerate resources and assimilate waste.

54. Solve the following questions?

Correct Answer: (a)
Solution:

GDP (Gross Domestic Product) is the market value of all final goods and services produced within the domestic boundaries of a country in a year. Its calculation includes the output provided by all residents and non-residents, regardless of whether the ownership of the production belongs to a local or foreign company.

As per the question:
Consumption, Investment, and Government expenditure on domestically produced goods and services are Cd, Id, and Gd, respectively. X and M denote the aggregate value of exports and imports
GDP is expressed as

55. Match LIST-I with LIST-II

LIST-I (Economist)LIST-II (Concept)
A. Adam SmithI. Size of the market
B. David RicardoII. Natural resource constraint
C. Karl MarxIII. Forces of Production
D. Amartya SenIV. Freedom of choice

Choose the correct answer from the options given below:

Correct Answer: (a) A-I, B-II, C-III, D-IV
Solution:
LIST-I (Economist)LIST-II (Concept)
A. Adam SmithSize of the market
B. David RicardoNatural resource constraint
C. Karl MarxForces of Production
D. Amartya SenFreedom of choice

56. In the presence of an externality, the Coase Theorem argues that which of the following can be achieved :

Correct Answer: (b)'Social optimum can also be achieved through mutual agreement/contract among private parties.
Solution:

The Coase Theorem is an economic principle that illustrates the potential for mutual agreement between private parties to solve the problem of an externality.

According to the Coase Theorem, if a problem of externality exists between two parties, they can resolve the issue through mutual agreement without government intervention, provided that transaction costs are low and property rights are clearly defined.

57. A continuous supply shock leads to which of the following:

Correct Answer: (b) Continuous shift of the Phillips Curve to the right such that both unemployment and inflation increase.
Solution:

When a continuous supply shock occurs (e.g., persistent increases in oil prices or production costs), it shifts the Phillips Curve to the right. The Phillips Curve is an economic model that shows the relationship between unemployment and inflation.

The result of a continuous supply shock is:
* The Phillips Curve shifts to the right.
* Unemployment increases.
* Inflation increases.
* Economic growth slows down (Stagflation).
* Production costs increase. Businesses raise their prices.

58. The tangency point between a non-linear Isoquant and an Isocost line implies which of the following :

Correct Answer: (a) The point of production efficiency where a firm can produce the desired output at the lowest possible cost.
Solution:

The Tangency Point is the point where the Isoquant (equal product curve) and the Isocost line (equal cost line) touch each other.

At this point, the slope of the Isoquant (Marginal Rate of Technical Substitution, MRTS) is equal to the slope of the Isocost line (ratio of input prices).

This equality shows that the firm is producing the maximum possible output for a given cost, or equivalently, producing a given output at the minimum possible cost. This is the point of cost minimization for a given output level.

59. Which of the following statements are correct:

(A) Gross Domestic Product is free from all kinds of double counting.
(B) Donations are included in National Income.
(C) Begging is included in Personal Income.
(D) Inventory is included in Investment.
(E) Income of foreign workers is included in Gross National Product (GNP) and not in Gross Domestic Product (GDP).
Choose the correct answer from the options given below:

Correct Answer: (d) Only C and D
Solution:

(C) Begging is included in Personal Income: This statement is correct, as money received from begging is a form of transfer payment and, while not earned income, is an income received by individuals and thus included in Personal Income (though typically excluded from National Income/GDP).

(D) Inventory is included in Investment: This statement is correct, as changes in inventory are considered a component of Investment in GDP calculation. An increase in inventory is viewed as investment, while a decrease is disinvestment.

Statements (A), (B), and (E) are incorrect:

60. Consider the following statements :

(A) Price leadership equilibrium strategy is a Nash Equilibrium strategy.
(B) Bertrand equilibrium strategy is a Nash Equilibrium strategy.
(C) Stackelberg equilibrium strategy is a Nash Equilibrium strategy.
(D) Monopolist equilibrium strategy is a Nash. Equilibrium strategy.
(E) Cournot equilibrium strategy is a Nash Equilibrium strategy.
Choose the correct answer from the options given below:

Correct Answer: (c) Only A, B, C, E
Solution:

(A) Price leadership equilibrium strategy is a Nash Equilibrium strategy: This is correct. In price leadership, the dominant firm sets the price, and the smaller firms follow, maximizing their own profits given the leader's price.
This satisfies the definition of Nash equilibrium.

(B) Bertrand equilibrium strategy is a Nash Equilibrium strategy: This is correct. In the Bertrand model (where firms compete on price), the Nash equilibrium occurs when both firms set their price equal to marginal cost.

(C) Stackelberg equilibrium strategy is a Nash Equilibrium strategy: This is correct. In the Stackelberg model, the leader firm sets its output first, and the follower firm reacts to the leader's output.

Given the leader's output, the follower acts optimally to maximize its own profit, and neither firm regrets its decision. This leads to a Nash equilibrium.

(D) Monopolist equilibrium strategy is a Nash Equilibrium strategy: This is incorrect. A monopolist has no competitors, so the concept of Nash equilibrium (which involves interaction between players) does not apply.

(E) Cournot equilibrium strategy is a Nash Equilibrium strategy: This is correct. In the Cournot model (where firms compete on quantity), each firm chooses its output level, assuming the other firm's output level is fixed.

The resulting intersection of the reaction functions is a Nash equilibrium.