As you requires I am here giving you previous year paper of Entrance Examination for M. A. Economics course of Delhi University (DU).

Sample Paper :

Question 1. There are two individuals, 1 and 2. Suppose, they are o
ered
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 e
cient allocations is independent of whether it rains
or shines
(b) the set of Pareto e
cient allocations will depend on the weather
(c) the set of Pareto e
cient allocations may depend on the weather
(d) whether the set of Pareto e
cient 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 indi
erence 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 di
erentiable
(b) f is discontinuous and di
erentiable
(c) f is continuous but not di
erentiable
(d) f is discontinuous and non-di
erentiable
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 affinely indepen-
dent if with scalars c0,c1,...,cn, ∑n
i=0
civi = 0 and ∑n
i=0
ci = 0 implies ci = 0
for i = 0,1,...,n. For such an affinely 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) (x2,4x2)
(b) (x2,x1 + x2)
(c) (1 + x1,4x2)
(d) (x2,−5x1 + 4x2)
Question 11. A correlation coefficient 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 covari-
ance 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
The next three questions are based on the following information.
Let F : → be a (cumulative) distribution function. Define b : [0,1] →
by
b(c) =
{ 0,
if c = 0
inf F
−1
([c,1]), if c ∈ (0,1]
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)]
Question 16. Suppose we conduct n independent Bernoulli trials, each with
probability of success p. If k is such that the probability of k successes is
equal to the probability of k + 1 successes, then
(a) (n + 1)p = n(1 + p)
b) np = (n − 1)(1 + p)
(c) np is a positive integer
(d) (n + 1)p is a positive integer
The following set of information is relevant for the next 4 ques-
tions. Consider a closed economy where at any period t the actual output
(Yt) is demand-determined. Aggregate demand on the other hand has two
components: consumption demand (Ct) and investment demand (It). Both
consumption and investment demands depend on agents’ expectation about
period t output (Y e
t
) in the following way:
Ct = αY
e
t
; 0 <α< 1,
It = γ (Y
e
t
)
2
; γ > 0.
Question 17. Suppose agents have static expectations. Static expectation
implies that
(a) in every period agents expect the previous period’s actual value to
prevail
(b) in every period agents adjust their expected value by a constant posi-
tive fraction of the expectational error made in the previous period
(c) in every period agents use all the information available in that period
so that the expected value can differ from the actual value if and only if there
is a stochastic element present
(d) none of the above
Question 18. Under static expectations, starting from any given initial level
of actual output Y0 = 1−α
γ
, in the long run the actual output in this economy
(a) will always go to zero
(b) will always go to infinity
(c) will always go to a finite positive value given by 1−α
γ
(d) will go to zero or infinity depending on whether Y0 > or < 1−α
γ
Question 19. Suppose now agents have rational expectations. Rational
expectation implies that
(a) in every period agents expect the previous period’s actual value to
prevail
(b) in every period agents adjust their expected value by a constant posi-
tive fraction of the expectational error made in the previous period
(c) in every period agents use all the information available in that period
so that the expected value can differ from the actual value if and only if there
is a stochastic element present
(d) none of the above
Question 20. Under rational expectations, in the long run the actual output
in this economy
(a) will always go to zero
(b) will always go to infinity
(c) will always go to a finite positive value given by 1−α
γ
(d) will go to zero or infinity depending on agents’ expectations
Question 8. Consider the following system of equations:
x + 2y + 2z

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