'5 0 I 2

F-DTN-M-FDPA

ECONOMICS
Paper I
Time Allowed Three Hours Maximum Marks 300

INSTRUCTIONS
Each question is printed both in Hindi and in English. Answers must be written in the medium specified in the Admission Certificate issued to you, which must be stated clearly on the cover of the answer-book in the space provided for the purpose. No marks will be given for the answers written in a medium other than that specified in the Admission Certificate. Candidates should attempt Questions no. 1 and 5 which are compulsory, and any three of the remaining questions selecting at least one question from each Section. The number of marks carried by each question is indicated at the end of the question. Graphs I illustrations, wherever required, may be done in the answer-book itself.
IMPORTANT : Whenever a question is being attempted, all its parts/sub-parts must be attempted contiguously. This means that before moving on to the next question to be attempted, candidates must finish attempting all parts/sub-parts of the previous question attempted. This is to be strictly followed.

Pages left blank in the answer-book are to be clearly struck out in ink. Any answers that follow pages left blank may not be given credit.

ertra: 37011).
vvT I

cem .-ff 5 i pm-rffy fir0 gzu qz

SECTION A 1. Answer the following in about 150 words each : (a) 12x5=60

"Validity of Marshall's equi marginal utility depends on the assumption of unitary elasticity of the marginal utility curves of the commodities under the budget." Clearly explain this assertion.

(b)

"For most developing nations fighting persistent balance of payments crisis and inflationary crisis, monetary contraction is a better option." Do you agree ?

(c)

Show how price output decision is taken by duopolists, taking into account, their mutual reaction. Under what condition will the duopolistic market be in equilibrium ?

(d)

"If firms produce differentiated products it is neither possible to identify the industry nor possible to draw its supply curve." Discuss and show how Chamberlin handles the problem.

(e)

"Agriculture is not just a sector contributing a small proportion of GDP, it is a way of life for the Indians." Discuss.

F-DTN- M-FDPA

[Contd.]

4.9 4
1. 17,14-.1 njd owiTn- 150
12x5=60

F :
"4-11 k

T-ThTr - 3441Picu f9-zrq 4144-16-1 a41 -1Ti7 at-vi 4Pidr

cot?

awl

c, i14 41 Hlk-Idi 1 f*{

I"

T2I7
030 "3 fa

ARs. :1T a1fT7 TTO

44-Rzir cci Tjc1fd 41H*-41

4 4,
* I" GEtii 3TrEt

T(Fq
4#TF e (Tr) tfirifTzft

F)

T?zth # I ft4 Trr rtf -T-24-rd et tfift -R ralAlt 3T4.2-4 4 6111 ?

- Tif A7f q# ftizt sft -R srcitftf WET

(Er) "alp Lb4 f49rq-a Tati a r .3c-41q4 T[ f1

37:11 -Tr lAcir evtirir TreiTa # ffiTcro-r I" otil(Nr a1f TW -- 71k 1k4 sr* -R J-cRo er 3ftT 3R-ta

*14-1+1-11

frcra.

1
`t -Fsr 4end To, 4q -111 .crITTrr t

Ufa

*, 1-744i

RIR tie,

tq-9. -11" 4 I" tiro TT -4 F-DTN-M-FDPA 3 [Contd.]

2. (a) Mention the different components of supply of money as specified by the Reserve Bank of India. In what sense is the narrow money 'narrow' ? (b) Why is under-employment equilibrium possible in Keynesian economics, but not possible in Classical economics ? Give reasons. (c) Is rent a surplus ? Give reasons in support of your assertion and point out the difference between 'rent' and 'quasi-rent'. 3. (a) What is the difference between private and social cost-benefit ? Which one of the two is more relevant to government investment decision and why ? (b) Explain why money supply remains unaffected if budget deficit is met by borrowing from the public. (c) Is there any significant difference between Value added tax and Sales tax ? If so, what is that ? 4. (a) "Industrial development and environmental degradation are highly correlated." If it is true what should be, in your opinion, the policy options for industrialization process vis-a-vis pollution control ?
F-DTN-M-FDPA 4 20 20 20 20 20 20 20

[Contd.]

2.

() urrdlu

Erd --

fc44 a-A-@

qw ttr A-R

cr it 4,

fq-14 of 3421 4 Ti-tEri

20

'Eftur ?

(g)
*-14-44

chtu -7rrfq -zrrazr 3i21

3-T2fr

4
? 20

wirg

d'a

(Tr) r

d 114 -cr- 3TTN-47

? 37A

-4421.-R

A c1R -i,

72u

HJir-ri 74

'377R:it- TT7'

ih
20

3.

()

l;cE H11-115-141 (IHM-c11#

err

#
(+s) ow9e-r k* --{ 1u 4. e t I
3-1M7 ?

4,-Rohlk
3frt

fra-Tr ?

fir t - fart,

t1 3-Tfk
20

Errzr \lc'
form Tildf .; tt5iT

.1

4 ft-21 -{
20

., . 7;4: (IT) =HI cOvIf oh* 1:1,4 TERA Thdt7

4) HeroiTui 20

cwr ? i We:Rung sr4 T

I" 7 :Trq 7rt mr* cigcr

4. () "311 -err

6itir ffi-9-R 4,
TrRT-4T
20
[Contd.]

---zrr attfat* -(7 q[

44-wr r* -cru:r f tilik ?

5

1-tir
F-DTN-M-FDPA

f447T

(b)

Discuss the role of multinationals in employment creation, income generation and transfer of technology. 20

(c)

For optimal allocation of resources, which of the options market forces, planning exercise or a combination of both should he suitable for the third world countries ? Defend your stand. 20

F-DTN-M-FDPA

[Contd.]

(t) thlflR r49., 3llzT 7R- .0'r d

dur

rig,wJ 4 9,1-1-1 -41 t 1 -11 1 :E*7

tits: 1 -11 T1177 1

20

(Tr) Timit

3o -d4 33-rtd7 ife-

1 dtzr
cikrf I k TF5711 -,
20

4 TErt 3ITT te '

zrr 74* -r fidr37 too ?

F-DTN-M-FDPA

[Contd.]

SECTION B 5. Answer the following in about 150 words each : (a)

12x5=60

"The assumption of fixed coefficient production function is at the root of Harrod's instability." Discuss and explain whether giving up the assumption really helps.

(b)

Derive Marshall's welfare economics from his concept of consumer surplus after explaining consumer's surplus along with the underlying assumptions. What is prisoner's dilemma ? How is it related to a strictly dominant industry ? Show different stages of product life cycle. How do the shortcomings of diffusion lag of new technologies in recent years cause a time compression of the cycle'? Distinguish between Currency Board Arrangement and dollarisation. Why would a nation adopt one or the other ?

(c) (d)

(e)

6. (a) What do you mean by money multiplier ? What are the factors that determine the value of the multiplier ? (b) Why does the point of intersection of IS and LM curves coincide with two markets ? (c) What are the fiscal and monetary implications of vertical IS and vertical LM curves ?
F-DTN-M-FDPA 8 20 20 20

[Contd.]

t9114
5. ]-11-doi art{

AT*, 71 -sm)--

]a1 1 1 1 -1 1 150 .71 - ) ] 12x5=60

:
() "fart 4I II* 6O-11qd 1 FWd]

aTttgd7 qtri

t 1"

0LIR.q41

iimmr as =t .3fR +0-I*11 1-trilt11 t

(31) 1 :171 -@a1 a-criT)Tr 3T4qmirTr t oimiszt t r r77 tzi-r amgmTir 4 37q7 1 1 7t7 321777 chl f*itc, Rti T1f -ATT, -(T)

fit74 3r
a-aH] r1 fay

r a-zir t 2 zit 7T 3*- fm spirt wr* *TO-Rm t 2

(w)

ail fM W 3mT2Tr3:TT Temdobrilronzii a r fq*?rT* u argil fETW4R 3T4cMRIFT dr oh( !*1 t 2

]<][ .4q

trT -4R T41: 37-cmrdr t ?

(srd*Izmut) ft*t

6. ()

i t zr7 c
(U) IS

ain 4**1 *TIT-4M t 2 TT Ttuich fqq-ffm ctiM Tai ?

LM

20

*dig fq3 wrAt srqiIm

20

aTEI - TT dr
(T) 3e,%1 LS W4

dqg LM a TriziMITT e 2
9

ld tI I4Ig14 20
[Contd.]

F-DTN-M-FDPA

7. (a) Discuss the impact of FDI on level of output and employment of the host country. Why do we need some precaution in allowing FDI in retail sector in India ? (b) "Transaction demand for money is interest rate elastic." Explain in reference to the post Keynesian theories of demand for money. (c) Why are trading blocks formed ? Explain the welfare impact of such trading blocks for non-member countries. 20
20 20

8.

(a) Distinguish between backwash and spread effects of Myrdal. How do they operate in backward economies ? (b) "The solution of long term development needs of India lies in promoting public-private partnership." Discuss. (c)
20 20

Examine Kalecki's model of distribution. Do you consider it a correct explanation of distribution ? 20

F-DTN-M-FDPA

10

7@, 34-drawr ( ) 9ac41q4 is k

T1 f4 ARTfa c ITT 1T--4art Tuit sT T fqtt weir I luta. To fvi Trrqtrr* 1(74 fir a1 3T14f7 a4 ant ? t c.ilticik g I" ogicgtir d 1 fizrz.ri amr:rr7 Ti.r4v k dt-R-abi+alc

20

(N) " (4-a-1 at-Ttr

20

(TO

N-fir -<Fr t7tf TEff kH-7 Ala oqlt9tIr cbetlIur 711-14 few, n ,4811 TT-77 l kIf --7 3r- 1R WA e4 Tnrr Tfrf T-Ca fcrot aykraT-2fra4 4 .4 fwff d-r34 Tf Thrt-a- z1 Nticrik facer aTr47.4w(rt (Public-Private TP1T f1c,1W--o41{9eir 14:6d. Partnership) t 31)7TTF Tlf -$7 - I

20

20

20

(TO

aC

T I ci-qi itaTtrr ii5@ 3IPT 5N +-178r1 T). f477 a;1 T 1 omsiI is

fq71 11 1 2 20

F-DTN-M-FDPA

11

F-DTN-M-FDPA

3Takiff
c19-Eff I
Wig (1-1 fiat RuTM

300

r f atZ

fr-j)W

M t5c- 311T 3f7-

'"Ztauf 4 rak TI7EZ77 74 c11 61cd 71t 1 71T /fell fr, 3fIT $%"1 1 31T9* YW-Y1 # G f7 eF211 rff t5- qz 3rK -HRFTM7 1 P7- U t7T 3G1Rid rntan 31rffr War 7 JrN rIT )131W .157. P/#4 4 77L 31-123t #Tea# APYRY- JrN

Wg?)1 Is Y -4- dror g l &TA. a Wrf tiSit 1 305 yr arnv 9 fl dri< e -TA7 a7acPH-tcbH MR139- g- nva aid # f e nu rRa ft:iv a 31 ;inn/ rhr 73ui e aaTV" aiw gfl 15# pail3ffT wemriuf =air 377d3z1 17771 arC wr27-wrzr ad 327sera&wi ll RPTI/Jt74 Rfr f swn-4 gra w arC Ava4 I rfw 312f wi l siTtn-9774 3771 Eir? RI. art Nod . sisa Cl arr eAu ant TT Fprgef e Jig I pi. di#FituwErt hznToTgRa--7PluraSe- gugtE5Y -Ad arpj 37T zalk t,t2 u Fal a au am:1 ev7T e wed! g Note :
English version of the Instructions is printed on the front cover of this question paper.