Economics Optional Test 1 and Plan for UPSC Mains 2017 : Mains Marathon

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We are starting with Economics Mains Marathon Initiative. Here is the 1st Economics Optional Test.

Click Here for Mains Marathon Economics Optional Plan

Click Here for Economics Mains Marathon Test-1

Additional Set of Questions for Practice: Q1. State, prove and give an economic interpretation of Euler’s theorem. Q2. “Systematic monetary policy will not be effective under Rational Expectations Hypotheses.” Explain the statement with a suitable model. Q3. State the CES production function and interpret its parameters. Show that the Cobb-Douglas production function is a special case of CES production function. Q4. Explain the speculative demand for money and it’s relationship to the ‘liquidity trap’. Q5. What is asymmetric information? How does it lead to adverse selection and market failure ? Q6. Define Income effect, substitution effect and price effec. Show that price effect can be decomposed into substitution effect and income effect. Q7. Compare different measures of risk aversion. Q8. What is Prisoner’s Dilemma? Discuss its importance and implications in Game Theory. Q9.

  • Why does a perfectly competitive firm keeps on producing in the short run even when it is incurring losses. Explain using suitable diagram, when the firm will shut down? Q10. What do you mean by collusive oligopoly? Distinguish between cartel and price-leadership with respect to determination of price and quantity.

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