IEcoS General Economics Paper 1 Papers 2002

IEcoS General Economics Paper 1 2002


  1. Candidates should attempt any five parts of the following question (Answer to each part should be approximately of 50 words): 5 × 7 = 35

    1. Define the marginal rate of substitution (MRS) in indifference curve analysis.

    2. Briefly explain the term expansion path.

    3. What is the shut-down point of a firm?

    4. How does the Ricardian theory of rent differ from the modem theory of rent?

    5. What is the ‘social welfare function’

    6. How is the multiplier different from super-multiplier?

    7. Explain the basic limitations of Leontief's input-output model.


  1. Candidates should attempt any flue parts of the following question (Answer to each part should be approximately of 150 words): 5 × 15 = 75

    1. Distinguish between the income effect and substitution effect in indifference curve analysis. Show how they are related to the price effect.

    2. Explain briefly the Cobb-Douglas production function and its usefulness in economic analysis.

    3. Mention the problems of pricing of factors of production under imperfect competition.

    4. Explain under what conditions does an economy happen to be in a state of under-employment equilibrium.

    5. What is the dual problem in linear programming (LP)? Explain how the variables in a dual are interpreted.

    6. Distinguish between demand-pull and cost-push types of inflation.

    7. Compare perfect competition and monopoly in respect of price, output and profit.


Candidates should attempt any three of the following questions (Answer to each question should be approximately of 500 words)

  1. Evaluate critically the revealed preference theory (RPT) propounded by Prof. Samuelson. How is this theory superior to the indifference curve approach? 30

  2. What are the characteristics of public utilities? How is price determined by public utilities? 30

  3. Discuss the marginal productivity theory of distribution. Does it provide a satisfactory explanation for the determination of the reward of a factor of production? 30

  4. State and explain the necessary and sufficient conditions for Pareto optimality. 30

  5. What are the different methods of measuring national income? Bring out clearly the interrelationship between these measures. 30