econdse.org Entrance Examination for M. A. Economics Question Paper : Delhi School

Name of the University : Department of Economics, Delhi School of Economics, University of Delhi, India.
Exam : M.A. Economics Admissions Test
Department : Economics
Document Type : Sample Question Paper
Website : http://econdse.org/downloadable-question-papers-m-a-economics-entrance/
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Delhi Entrance Examination for M. A. Economics Question Paper

Series 01 :
Time. : 3 hours
Maximum marks : 100

General Instructions

Please read the following instructions carefully :
** Check that you have a bubble-sheet accompanying this booklet. Do not break the seal on this booklet until instructed to do so by the invigilator.
** Immediately on receipt of this booklet, ll in your Name, Signature, Roll number and Answer sheet number (see the top left corner of the bubble sheet) in the space provided below.

** This examination will be checked by a machine. Therefore, it is very important that you follow the instructions on the bubble-sheet.
** Fill in the required information in Boxes on the bubble-sheet. Do not write anything in Box 3 – the invigilator will sign in it.

** Make sure you do not have mobile, papers, books, etc., on your person. You can use non-programmable, non-alpha-numeric memory simple calculator. Anyone engaging in illegal practices will be immediately evicted and that person’s candidature will be canceled.

** You are not allowed to leave the examination hall during the first 30 minutes and the last 15 minutes of the examination time.
** When you finish the examination, hand in this booklet and the bubble sheet to the invigilator.

Before you start :
** Check that this booklet has pages 1 through 21. Also check that the top of each page is marked with EEE 2015 01. Report any inconsistency to the invigilator.
** You may use the blank pages at the end of this booklet, marked Rough work, to do your calculations and drawings. No other paper will be provided for this purpose. Your \Rough work” will be neither read nor checked.

Part I

** This part of the examination consists of 20 multiple-choice questions. Each question is followed by four possible answers, at least one of which is correct. If more than one choice is correct, choose only the `best one’. The `best answer’ is the one that implies (or includes) the other correct answer(s). Indicate your chosen best answer on the bubble- sheet by shading the appropriate bubble.

** For each question, you will get: 1 mark if you choose only the best answer; 0 mark if you choose none of the answers. However, if you choose something other than the best answer or multiple an- swers, you will get ??1=3 mark for that question.

Question 1. :
There are two individuals, 1 and 2. Suppose, they are oered a lottery that gives Rs 160 or Rs 80 each with probability equal to 1/2. The alternative to the lottery is a xed amount of money given to the individual. Assume that individuals are expected utility maximizers. Suppose, individual

1 will prefer to get Rs 110 with certainty over the lottery. However, Individual
2 is happy receiving a sure sum of Rs 90 rather than facing the lottery. Which of the following statements is correct?
(a) both individuals are risk averse
(b) 2 is risk averse but 1 loves risk
(c) 1 is risk averse but 2 loves risk
(d) none of the above
Answer: (a)

Question 2. Consider an exchange economy with agents 1 and 2 and goods x and y. The agents’ preferences over x and y are given. If it rains, 1’s endowment is (10, 0) and 2’s endowment is (0, 10). If it shines, 1’s endowment is (0, 10) and 2’s endowment is (10, 0).
(a) the set of Pareto ecient allocations is independent of whether it rains or shines
(b) the set of Pareto ecient allocations will depend on the weather
(c) the set of Pareto ecient allocations may depend on the weather
(d) whether the set of Pareto ecient allocations varies with the weather depends on the preferences of the agents
Answer: (a)

Question 3. Deadweight loss is a measure of
(a) change in consumer welfare
(b) change in producer welfare
(c) change in social welfare
(d) change in social inequality
Answer: (c)

Question 4. To regulate a natural monopolist with cost function C(q) = a + bq, the government has to subsidize the monopolist under
(a) average cost pricing
(b) marginal cost pricing
(c) non-linear pricing
(d) all of the above
Answer: (b)

Question 5. Suppose an economic agent lexicographically prefers x to y, then her indierence curves are
(a) straight lines parallel to the x axis
(b) straight lines parallel to the y axis
(c) convex sets
(d) L shaped curves
Answer: (c)

Question 6. Which of the following statements is correct?
(a) f is continuous and has partial derivatives at all points
(b) f is discontinuous but has partial derivatives at all points
(c) f is continuous but does not have partial derivatives at all points
(d) f is discontinuous and does not have partial derivatives at all points

Question 7. Which of the following statements is correct?
(a) f is continuous and dierentiable
(b) f is discontinuous and dierentiable
(c) f is continuous but not dierentiable
(d) f is discontinuous and non-dierentiable

Question 8. Consider the following system of equations:
x + 2y + 2z + s + 2t = 0
x + 2y + 3z + s + t = 0
3x + 6y + 8z + s + 4t = 0
The dimension of the solution space of this system of equations is
(a) 1
(b) 2
(c) 3
(d) 4

Question 9. The vectors v0; v1; : : : ; vn in <m are said to be anely independent if with scalars c0; c1; : : : ; cn, Pn i=0 civi = 0 and Pni =0 ci = 0 implies ci = 0
for i = 0; 1; : : : ; n. For such an anely independent set of vectors, which of the following is an implication
I. v0; v1; : : : ; vn are linearly independent.
II. (v1 v0); (v2 v0); : : : ; (vn v0) are linearly independent.
III. n m.
(a) Only I and II are true
(b) Only I and III are true
(c) Only II is true
(d) Only II and III are true

Question 10. <2 ! <2 be a linear mapping (i.e., for every pair of vectors (x1; x2); (y1; y2) and scalars c1; c2, F(c1(x1; x2) + c2(y1; y2)) = c1F(x1; x2) + c2F(y1; y2).) Suppose F(1; 2) = (2; 3) and F(0; 1) = (1; 4). Then in general, F(x1; x2) equals
(a) (x2; 4×2)
(b) (x2; x1 + x2)
(c) (1 + x1; 4×2)
(d) (x2;??5×1 + 4×2)

Question 11. A correlation coecient of 0.2 between Savings and Investment implies that:
(a) A unit change in Income leads to a less than 20 percent increase in Savings
(b) A unit change in Income leads to a 20 percent increase in Savings
(c) A unit change in Income may cause Savings to increase by less than or more than 20
(d) If we plot Savings against Income, the points would lie more or less on a straight line

Question 12. In a simple regression model estimated using OLS, the covariance between the estimated errors and the regressors is zero by construction.
This statement is:
(a) True only if the regression model contains an intercept term
(b) True only if the regression model does not contain an intercept term
(c) True irrespective of whether the regression model contains an intercept term
(d) False

Question 13. Consider the uniform distribution over the interval [a; b].
(a) The mean of this distribution depends on the length of the interval, but the variance does not
(b) The mean of this distribution does not depend on the length of the interval, but the variance does
(c) Neither the mean, nor the variance, of this distribution depends on the length of the interval
(d) The mean and the variance of this distribution depend on the length of the interval

Question 14. If F has a jump at x, say c = F(x) > a F(x??), then
(a) b has a jump at c
(b) b has a jump at a
(c) b is strictly increasing over (a; c)
(d) b is constant over (a; c)

Question 15. If F is constant over (x; y) with F(z) < F(x) for every z < x, then
(a) b has a jump at y
(b) b has a jump at x
(c) b is continuous at F(x)
(d) b is decreasing over [0; F(x)]

Part II

** This part of the examination consists of 40 multiple-choice questions. Each question is followed by four possible answers, at least one of which is correct. If more than one choice is correct, choose only the `best one’. The `best answer’ is the one that implies (or includes) the other correct answer(s). Indicate your chosen best answer on the bubble- sheet by shading the appropriate bubble.

** For each question, you will get: 2 marks if you choose only the best answer; 0 mark if you choose none of the answers. However, if you choose something other than the best answer or multiple an- swers, then you will get ??2=3 mark for that question.

The next Two questions are based on the following. Consider a pure
exchange economy with three persons, 1, 2, 3, and two goods, x and y. The
utilities are given by u1(:) = xy, u2(:) = x3y and u3(:) = xy2, respectively.

Question 21. If the endowments are (2,0), (0,12) and (12,0), respectively, then
(a) an equilibrium price ratio does not exist
(b) pX=pY = 1 is an equilibrium price ratio
(c) pX=pY > 1 is an equilibrium price ratio
(d) pX=pY < 1 is an equilibrium price ratio
Answer: (b)

Question 22. If the endowments are (0,2), (12,0) and (0,12), respectively, then
(a) an equilibrium price ratio does not exist
(b) equilibrium price ratio is the same as in the above question
(c) pX=pY < 1 is an equilibrium price ratio
(d) pX=pY > 1 is an equilibrium price ratio
Answer: (d)

Question 24. Now, assume that the supplier cannot observe type of the consumer. Suppose, he puts on oer both of the packages that he would oer in the above question. If consumers are free to choose any of the oered packages, then
(a) Both types will earn zero utility
(b) Only low type can earn positive utility
(c) Only high type can earn positive utility
(d) Both types can earn positive utility
Answer: (c)

Question 25. Suppose buyers of ice-cream are uniformly distributed on the interval [0; 1]. Ice-cream sellers 1 and 2 simultaneously locate on the interval, each locating so to maximize her market share given the location of the rival. Each seller’s market share corresponds to the proportion of buyers who are located closer to her location than to the rival’s location.
(a) Both will locate at 1=2.
(b) One will locate at 1=4 and the other at 3=4.
(c) One will locate at 0 and the other at 1.
(d) One will locate at 1=3 and the other at 2=3.
Answer: (a)