As you want admission in MA economics in delhi university and for it will appear in DU DSE M.A. (Economics) Entrance Exam , so here on your demand I am providing its question paper


Question 1. There are two individuals, 1 and 2. Suppose, they are offered

a lottery that gives Rs 160 or Rs 80 each with probability equal to 1/2. The

alternative to the lottery is a fixed 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

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(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 efficient allocations is independent of whether it rains

or shines

(b) the set of Pareto efficient allocations will depend on the weather

(c) the set of Pareto efficient allocations may depend on the weather

(d) whether the set of Pareto efficient 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)

Attached Files

DU DSE M.A. (Economics) Entrance Exam paper.pdf (208.1 KB, 107 views)