(Download) UPSC IAS Mains Exam 2019
Economics (Paper-1)
Exam Name: UPSC IAS Mains Economics (Paper-I)
Marks: 250
Time Allowed: 3 Hours
Year : 2019
SECTION "A"
Q.1 Answer the following questions in about 150 words each?
(a) Under competition, the cost function is given as Cly) = y2 +1, where y is output. Derive the inverse supply curve and show how the supply curve looks like.
(b) What determines the degree of price discrimination under monopoly market?
(c) How does 'carbon trading help in reducing environment degradation?
(d) How is Human Development Index calculated by UNDP? Can there be a better method of assigning weights to various indicators?
(e) Show that in a simple Keynesian model, equal expansion in tax and government expenditure does not always lead to balanced budget theorem.
Q.2 (a) 'Tragedy of the commons' leads to over-exploitation of resources. Analyze. 15
(b) The following data are given for an economy :
- Consumption function, C =250+0.5(Y -T)-500r
- Investment function, I = 250-500r
- Real money demand function, L/P=0.5Y -500r
- Nominal money supply, M = 7650
- Price level, P=17
- Tax = T = Government expenditure = G = 200
- Here Y = Real income, r = Real rate of interest, L = Nominal money demand, P = Price level.
(i) Find the equations for IS and LM curves, and solve for Y and r.
(ii) Find out the multiplier formula for money supply change and then calculate the change in output if money supply changes by 510. 7+8=15
(c) How can controls on foreign trade contribute to the development of developing countries?
Q.3 (a) The role of income and substitution effect is crucial in producing backward bending labour supply curve when a tax is imposed on wages. Do you agree? 15
(b) In case of perfect capital mobility, explain the difference of the impact of an increase in money supply on GDP under two alternative exchange rate regimes—one fixed and the other flexible. 15
(c) Reflect on the inefficiency and socially undesirable aspects of monopolistic competition market situation vis-à-vis the perfect competition, both in the short and in the long run. 15
Q.4 a) What is the follower's problem in a duopoly model and how does it differ from the leader's problem? 15
(b) Can public-private partnership function effectively in the area of physical infrastructure? 15
(c) What are the features based on which the new trade theories are built that are distinctly different from the old theories? 15
