JNU

[neha:)]

1. The nature of long run equilibrium for a monopolistically competitive firm differs from that of a perfectly competitive firm because of
a. presence of supernormal profits
b. presence of excess capacity
c. equality between firm MR and MC
d. None of the above


2. In IS-LM model, if economy is NOT in a liquidity trap, then an increase in government spending in equilibrium
a. reduces private investment spending
b. increases private investment spending
c. has no effect on private investment spending.
d. has no effect on private consumption expenditure.

3. A monopolist faces a demand curve with unit price elasticity of demand. For such a monopolist, if marginal costs are positive
a. profit maximizing output doesn't exist
b. profit maximizing output is where MR=MC, and MR is decreasing.
c. profit maximizing output is where AR=MR, and AR is decreasing.
d. None of the above

4. If a lumpsum tax is imposed on a monopolist, would his output
a. increase
b. decrease
c. same
d. can't say

5. Suppose the critical region for a test statistics S in a given test of significance is given by S1 less than equal to S less than equal to S2.
Suppose that probability (S<S1) =0.03 and probability (S>S2)= 0.45. What is the level of significance being used here?
a. 0.03
b. 0.48
c. 0.52
d. 0.42

6. An individual always consumes goods X and Y in fixed proportion of 2:1. If the price of x is Rs 10, and price of Y is Rs 5, What's the price elasticity of demand for good X?

7. In an economy with unlimited supplies of labour, the wage rate is fixed at 0.5 unit of consumption good per period. The economy has a stock of machines, each of which employs one unit of labour to produce either one unit of itself or one unit of consumption good.
a. What's the relative price of the consumption good in terms of the machine?
b. What's the rate of profit in the economy?

8. A random variable is:
a. an elementary outcome
b. an event in the sample space
c.a number assigned to an event
d. a probability of an event.

[The Villain]

1 b
2 a
3
4 c
5 b

8 b

[neha:)]

Is the answer to 2nd questn (b) because in equilibrium, rate of interest would be higher, thus reducing private investment?

[neha:)]

@Ron
Please explain 5th. And are u sure about 8th? I think it may be (c).

[Anjali]

Even I guess 8th should be c

[mrittik]

A random variable is a mathematical construction which represents a random experiment or
process. Usually we represent random variables by capital letters X; Y; Z; : : :. We will be thinking
of random variables as roulette wheels which keep track of the possible outcomes and the frequency
which those outcomes occur. Random variables have a range of possible values that they may take
on (the numbers found on the edge of the wheel) and positive values representing the percentages
that these values occur.- Basically the random Variable is an elementary outcome.

[Aish]

How to solve 6 th and 7th??

[Akshay Jain]

According to me...for 3rd its A

[neha:)]

Thanks!