December 2015 - Paper 2

11:   The Marshallian utility analysis is based on a less valid assumption of:
A.

cardinal measurabil ity of the utility

B.

given marginal utility of money

C.

diminishing marginal utility of the goods

D.

additivity of the utility

 
 

Option: B

Explanation :

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12:  
Match the items of the List - I with those of the list - II and indicate the correct code:
 

List - I

List - II

(a) Convexity of the inctifferences curve to origin  

(i) Indifference curve analysis

(b) Quantity of certain goods sacrificed for a large quantity of other goods  

(ii) Consumer's equilibrium

(c) Equality of the ratio of the marginal utilities with that of the prices of the of the two goods

(iii) Substitutability / complementarity of the two goods  

(d) Separation of substitution and income effects from the total price effect          

 (iv) Marginal rate substitution

 

 

A.
(iv) (ii) (i) (iii)
B.

(iii) (iv) (ii) (i)

C.

(iii) (i) (iv) (ii) 

D.

(i) (iii) (ii) (iv)

 
 

Option: B

Explanation :

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13:   Firms producing and selling a large variety of goods will generally follow:
A.

Cost plus pricing

B.

Marginal pricing

C.

Skimming pricing

D.

Product line pricing

 
 

Option: D

Explanation :

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14:  

For the following two statements of Assertion (A) and Reasoning (R) indicate the correct code:

Assertion (A) : All firms under perfect competition in long run earn only normal profit.

Reasoning (R) : All firms under perfect competition in long run operate at the minimum average cost level.

A.

(A) and (R) both are correct.

B.

(A) is correct but (R) is not correct.

C.

(A) is not correct but (R) is correct.

D.

(A) and (R) both are incorrect.

 
 

Option: A

Explanation :

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15:  
Match the items of List - I with those of List - II and indicate the correct code:
 
List - I                                                                            List - II
 
(a) Substitute Goods                                                 (i) Negative Cross Elastic ity
 
(b) Complementary Goods                                         (ii) Low Price Elasticity
 
(c) Giffen Goods                                                       (iii) Positive Cross Elasticity
 
(d) High Income Group Consumption Goods                (iv) Positive Price Elasticity
A.

(iii) (iv) (ii) (i)

B.

(iii) (i) (iv) (ii)

C.

(ii) (iii) (i) (iv)

D.

(i) (ii) (iii) (iv)

 
 

Option: B

Explanation :

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