IAS Mains Economics 2021 Topic-Wise Important Questions

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Advanced Micro Economics

  1. Examine the relation between own and cross price elasticities for a compensated demand function (2014 – 10 marks)
  2. What do you mean by the existence and uniqueness of equilibrium in a market? Examine these concepts in a market where both demand and supply curves are downward sloping. (2014 - 10 marks)
  3. Discuss the cobweb model of dynamic equilibrium with lagged adjustment. Explain how the existence of a stable equilibrium depends on the nature of the demand and supply curves. (2014 – 20 marks)
  4. Examine the process of reaching the Ricardian steady state. How can the tendency towards steady state be countered? (2014 – 20 marks)
  5. The conventional analysis of profit maximization breaks down if the entrepreneur sells his output and possesses a production function which is homogenous of degree one. Explain (2014 – 10 marks)
  6. Write out the conditions for a Walrusian equilibrium in a pure exchange economy with no production, and two different goods. Two people A and B. Show that for such an economy for any equilibrium set of prices populate the economy; the absolute price level is indeterminate. (2013 – 10 marks)
  7. Show how investment and savings propensities determine distributive shares in the Kaldor theory of distribution. Suppose the investment is not exogenous as in Kaldor՚s original model but that it varies with profits. What does this mean for the stability of the Kaldor model of distribution? (2013 – 10 marks)
  8. Derive the equilibrium conditions of an individual firm and of the industry in a monopolistic competition scenario? (2013 – 10 marks)
  9. Under Bertrand competition with homogenous products in an oligopoly demonstrate how is the equilibrium price that will prevail arrived at? (2013 – 25 marks)
  10. Market demand curve for carbonated water: P = 20 – 9Q/2
  11. Two firms producing carbonated water, each with a marginal cost of INR 2.
  12. What is the market equilibrium price and quantity when each firm behaves as a Cournot duopolist? What are the firms՚ profits?
  13. What is the market equilibrium price and quantity when each firm behaves as a Bertrand duopolist? What are the firms՚ profits? (2013 – 25 marks)
  14. If workers supply labour based on an expected real wage, how is the aggregate supply of output determined in the economy? Suppose aggregate demand and supply are below the natural rate of employment and output. Would the New Classical economists advocate any particular policy intervention in this situation?
  15. Macroeconomics is usually approached via the outcomes of economic interaction in the following four markets – commodities, money, bonds, and labor markets. The Classical economists focused on which three of these four markets? In which market does the loanable fund theory of interest rate determination of the Classical economists focus and how is the interest rate determined? The Neo Classical synthesis focuses on which three markets? In which market is the interest rate primarily determined in the liquidity preference theory?
  16. Explain the determination of output and employment in a macro economy under the conditions when individuals are subject to i) no money illusion ii) money illusion.

International Economics

  1. What is an offer curve? Draw two offer curves such that the offer curve of the home country has a section reflecting inelastic import demand and the foreign country՚s offer curve is elastic throughout. Indicate in the diagram which portion of the home country՚s offer curve is inelastic. What is the reason for this shape of the offer curve? Demonstrate the implications on trade of a tariff imposed on imports by the home country. (2013 – 10 marks)
  2. What do you understand by a small open economy in the context of both goods and money markets? (2014 – 10 marks)
  3. What is meant by factor abundance? How does it affect the shape of the production frontier of a nation? (2014 – 10 marks)
  4. Analyze the partial equilibrium effects of a tariff imposed by a large country on its imports in terms of consumers՚ surplus (2014 – 10 marks)
  5. “With the Doha Round of multilateral trade talks stalled, regional trade agreements (RTAs) have emerged as an alternative approach to increase trade, spur stronger economic growth and lower unemployment rates in the participating countries.” Explain (2014 – 20 marks)
  6. Explain the conditions under which complete specialization will be possible for two nations in case of comparative advantage

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