NTA UGC NET Economics Mock Test

Which of the following is not a monotonic transformation

An Indirect Utility function

Suppose a consumers preferences over commodities 1 and 2 can be represented by utility function U(x1, x2) = min{x1, x2} where x1, x2 ≥ 0. The utility function of the consumer is

Which of the following represents the same preferences as U(x1, x2) = min{x1, x2} + max{x1, x2}

Which of the following represents the same preferences as U(x1, x2) = min{x1, x2} + max{x1, x2}

For a utility function representing strictly convex preferences, the marginal rate of substitution between two commodities must be

Suppose a consumer’s preference are given by the utility function u =4(x^0.5) + y . Suppose the consumer’s original equilibrium was x = 9, y = 10. If the consumption of x reduces to 4, how many units of y must he consume to remain on the same indifference curve?

Rohit consumes soft drink which is available in ½ litre and 1 litre bottles. He allows himself only half litre of soft drink at a time, so if he has a bottle of 1 litre he will throw ½ litre in the sink. Considering 1/2 litre bottle as good 1, what is his utility function

A consumer is indifferent between two hamburgers (good 1) and 3 Puri's (good 2) so his indifference curves are

A consumer is indifferent between two hamburgers (good 1) and 3 Puri's (good 2) so his utility function is 

If the price of automobiles were to decrease substantially, the demand curve for automobiles would most likely

If the price of automobiles were to increase substantially, the demand curve for gasoline would most likely

As the price of a good increases, the change in the quantity demanded can be shown by

Holding all other factors constant, consumers demand more of a good the

According to the Law of Demand, the demand curve for a good will

The demand curve for a good connects points describing how much consumers

When two goods are substitutes, a shock that raises the price of one good causes the price of the other good to 

If pizza and tacos are substitutes, a decrease in the price of tacos would lead to a

An increase in the demand curve for orange juice would be illustrated as a

If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely

The market demand for a product is found by

Bo Dacious buys 10 classical albums and 15 tubes of suntan lotion along with quantities of other goods. Suppose that the price of records rises by 90 cents per album and the price of suntan lotion falls by 60 cents per tube. Other prices and Bo’s income remain unchanged. What will Bo do?

If price rises, what happens to quantity demanded for a product?

If price rises, what happens to demand curve for a product?

The demand curve for a typical good has

all Giffen goods are essentially inferior but it is not necessary that all inferior goods are Giffen goods.

When Income of a consumer increases, the demand for Giffen goods will

When price of a good increases, the demand curve of its complimentary good

The Demand Curve for Inferior Goods (Not Giffen) is

If two commodities are complementary, then a rise in the price of one commodity will induce

The fall in demand due to increase in the price of the good is called

Demand curve shifts due to change in the price of the related goods

Demand curve shifts due to change in price of the good

Increase or decrease in demand causes shift in the demand curve

Increase or Decrease in demand is also known as Movement along the same demand curve

The fall in demand due to decrease in the price of the substitute good is called

The rise in demand due to increase in the price of the substitute good is called

The fall in demand due to increase in the price of the complimentary good is called

The rise in demand due to decrease in the price of the complimentary good is called

The rise in demand due to decrease in the price of the good is called

When two or more than two goods are demanded together to satisfy a particular want, the demand is said to be

When a commodity can be put to several uses, it is said to possess

Composite Demand is same as Joint Demand

The rise in demand due to increase in the price of the substitute good is causes

The fall in demand due to decrease in the price of the substitute good is causes

If the demand function of the commodity is

Q = 100 - 5P

when Price changes from 10 to 20, the quantity demanded changes by

If the demand function of the commodity is

Q = 100 - 5P

at Price of 20, the quantity demanded is

If the demand function of the commodity is

Q = 100 - 5P

at Price of 10, the quantity demanded is

The Demand Function

Q = 100 + 5P

Represents

The demand Function 

Q = 100 - 5P

Represents

If the money supply is $3 trillion and nominal GDP is $12 trillion, the income velocity of money is :

If aggregate output is constant while the money supply and its velocity both double, the equation of exchange predicts that the price level will :

The Classical Quantity Theory of Money was based on assumptions that :

Velocity of money is : 

Quantity theory of money implies that :

Given the following information :

Quantity of Money (M) = Rs. 4,800

Nominal GDP = Rs. 96,000

Real GDP = Rs. 48,000

What is the Velocity of money in this country

Given the following information :

Quantity of Money (M) = Rs. 4,800

Nominal GDP = Rs. 96,000

Real GDP = Rs. 48,000

What is the Price Level

Consider the following statements

A : Fisher’s view that velocity is fairly constant in the short run transforms the equation of exchange into the quantity theory money, which states that nominal income is determined solely by movements in the quantity of money.

B : For the classical economists, the quantity theory of money provided an explanation of movements in the price level.

The equation of exchange states that

You are given the following data on an economy in 2001 and 2007:
2001              2007

Money Supply                      200                300

Real GDP                               100                 150   

Price Level                             10                     ?

The velocity of circulation is the same in both years.

In the standard IS LM framework if you introduce endogenous money supply such that money supply depends positively on the nominal rate of interest, the corresponding rate of interest 

Which of the following would make the LM curve flatter in the (Y, r) space?

Which of the following would make the LM curve flatter?

The LM curve slopes upward to the right because

The LM curve will shift to the

When LM curve is almost horizontal, a ________ change in the interest rate must be accompanied by a _________ change in the level of income in order to maintain money market equilibrium.

If demand for money is highly sensitive to the interest rate, then

If demand for money is relatively insensitive to the interest rate, then

The LM curve would be steeper

The LM curve would be steeper

Investment increases proportionately with the increase in capital stock implies that, for a given rate of saving _______

In the Solow Model, The production function becomes __________ as k increases indicating that it gives _____________ marginal product of capital

The aggregate production function for the Solow growth model assumes (A) ___________ returns to scale and (B) _____________marginal productivity of labour and capital.

In the Solow Model, the point where investment is equal to depreciation is known as the ______________.

According to the Solow Model, _____________________ is a function of capital.

Consider an economy described by the following production function :

F(K, L) = K^0.5L^0.5  

Assume that the rate of depreciation is 10% per year and rate of saving is 30%. Find the steady state level of Investment of Solow’s model.

Consider an economy described by the following production function :

F(K, L) = K^0.5L^0.5  

Assume that the rate of depreciation is 10% per year and rate of saving is 30%. Find the steady state capital stock per worker of Solow’s model.

In the Solow Model, the change in saving rate produces

In the Solow Model, the economy which is not at steady state

In the Solow Model, at the steady state we have

What is the probability of 53 Sundays in a leap year

Tickets numbered 1 to 200 are mixed and a ticket is drawn at random from them. What is the probability that the ticket drawn is a multiple of 3

Two dice are thrown simultaneously. What is the probability of getting two numbers whose product is even?

What is the Probability of getting a sum 9 from two throws of a dice

Two dice are rolled simultaneously. The probability that total score is prime number is

Let A and B be two mutually exclusive events with positive probability each, defined on the same sample space. Find the correct answer:

An unbiased coin is tossed until a head appears. The expected number of tosses required is

A card is drawn at random from an ordinary deck of cards. If an ace is drawn you win Rs. 100; if a king is drawn you win Rs. 75; if a queen is drawn you win Rs. 50; and if a jack is drawn you win Rs. 25. What is the probability of winning at least Rs. 25? What would you expect to win on average?

Among 25 articles, 9 are defective, 6 have only minor defects and 3 have major defects. The probability that, if a selected article is defective, then the defect is major is

A student must choose one of the subjects - Physics, Chemistry or Mathematics for study. She is equally likely to choose Physics or Chemistry and twice as likely to choose Mathematics. The probability that student chooses Mathematics is

If A and B are independent events, P(A) = 0.5, P(A U B) = 0.7, then P(B) is

A car with six spark plugs is known to have two defective spark plugs. If two plugs are pulled at random, then the probability that both are defective is :

If E(XY) = 36, E(X) = 9, E(Y) = 4 then

Events A and B are equally likely and are independent. The probability of the event A and B is 0.36. The probability of A is :

If P(A) = P(B) = p, then P[A ∩ B] 

Given P(A) = 0.5, P(B) = 0.4 if A and B are independent then P(A U B) is

If a fair coin is tossed twice, the probability of getting 'head' at least once is 

If two fair dice are tossed, the probability that the sum of the points on the dice equals 7 is 

If A and B are independent events then

Given P(A) = 0.4, P(A U B) = 0.7, and A and B are independent, P(B) is equal to

Two patients share a hospital room for two days. Suppose that, on any given day, a person independently picks up an airborne infection with probability 1/4. An individual who is infected on the first day will certainly pass it to the other patient on the second day. Once contracted, the infection stays for at least two days. What is the probability that fewer than two patients have the infection by the end of the second day? 

Suppose 1/10 of the population has a disease. If a person has the disease, then a test detects it with probability 8/10. If a person does not have the disease, then the test incorrectly shows the presence of the disease with probability 2/10. What is the probability that the person tested has the disease if the test indicates the presence of the disease?

There are 3 red and 5 black balls in an urn. You draw two balls in succession without replacing the first ball.
The probability that the second ball is red equals

An insurance policy-holder can submit up to 5 claims. The probability that the policyholder submits exactly n claims is p_n, for n = 0, 1, 2, 3, 4, 5. It is known that
(a)  The difference between p_n and p_{n + 1} is constant for n = 0, 1, 2, 3, 4, and 

(b)  40% of the policyholders submit 0 or 1 claim.
What is the probability that a policy-holder submits 4 or 5 claims?

A tour operator has a bus that can accommodate 20 tourists. The operator knows that tourists may not show up, so he sells 21 tickets. The probability that an individual tourist will not show up is 0.02, independent of all other tourists. Each ticket costs 50, and is non-refundable if a tourist fails to show up. If a tourist shows up and a seat is not available, the tour operator has to pay 100 to that tourist. The expected revenue of the tour operator is 

In a roll of two fair dice, X is the number on first die and Y is the number on second die. Which of the following statements is True

A family has two children, what is the probability that both are girls given that at least one child is girl?

A student is answering a multiple‐choice examination. Suppose a question has m possible answers. The student knows the correct answer with probability p. If the student knows the correct answer, then she picks that answer; otherwise, she picks randomly from the choices with probability 1/m each. Given that the student picked the correct answer, the probability that she knew the correct  answer is

Suppose two fair dice are tossed simultaneously. What is the probability that the total number of spots on the upper faces of the two dice is not divisible by 2, 3, or 5?

A coin toss has possible outcomes H and T with probabilities 3/4 and 1/4 respectively. A gambler observes a sequence of tosses of this coin until H occurs. Let the first H occur on the n^th toss. If n is odd, then the gambler’s prize is −2ⁿ , and if n is even, then the gambler’s prize is 2ⁿ . What is the expected value of the gambler’s prize?

Malaysia has 200 units of labor, while there are 400 units of labor in Indonesia. When they produce, the countries have the following unit labor requirements.

                        Malaysia     Indonesia

Cameras             10                  20

Rugs                    10                  40

For which product does Malaysia have comparative advantage?

Malaysia has 200 units of labor, while there are 400 units of labor in Indonesia. When they produce, the countries have the following unit labor requirements.

                        Malaysia     Indonesia

Cameras             10                  20

Rugs                    10                  40

What is the relative price of rugs to cameras in Indonesia if there is no trade?

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of com or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Sylvania will now be able to consume a maximum of

The before-trade price of fish in Denmark is $10.00 per pound. The world price of fish is $6.00 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become:

Suppose that a worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year, and a worker in Sylvania can produce either 2 units of com or 6 units of wheat per year. Each nation has 10 workers. Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat. Suppose that trade is then initiated between the two countries, and Freedonia sends 30 units of corn to Sylvania in exchange for 30 units of wheat. Sylvania will now be able to consume a maximum of

The Ricardian Theory of comparative advantage states that a country has a comparative advantage in widgets if

The production possibilities of two countries, Homeland and Foreign, capable of producing two goods, cloth and wheat, are given as follows:

                                             Output per labour year

Country         Cloth          Wheat

Homeland      250             200

Foreign           300             400

Homeland and Foreign would be willing to trade with each other if the relative price of cloth is set at

The production possibilities of two countries, Homeland and Foreign, capable of producing two goods, cloth and wheat, are given as follows:

                                             Output per labour year

Country         Cloth          Wheat

Homeland      250             200

Foreign           300             400

Then each country can benefit if

The theory of Comparative Advantage in a two country, two commodity world can only work if

The fixed labour requirements per unit of wine and clothing production before trade for England and Portugal are given below :
Wine         Clothing

England          6                    10

Portugal         3                      5

If trade opens up between England and Portugal, what will be the pattern of trade according to comparative advantage?