Result Oriented SSC & Bank Exam Preparation Tips: UNIT X UGC NET ECONOMICS PAPER III MCQS

Unit-X

Application of Differential and Integral Calculus in theories of consumer behaviour, Production and pricing under different market conditions

Input-output analysis and linear programming

Application of Correlation and Regression

Testing of Hypothesis in Regression Analysis

1. Which of the following index numbers satisfies both time-reversal test and

factor-reversal test?

(a) laspeyre’s index number

(b) Paasche’s index number

d. All the above

Ans. c

2. Lorenz curve enables one to study which of the following?
a. Averages
b. Dispersion
c. Correlation
d. Index numbers

Ans. c

3. Which one of the following is correct for a normal distribution?
a. Standard deviation > Mean deviation > Quartile deviation
b. Quartile deviation > Mean deviation > Standard deviation
c. Mean deviation > Standard deviation > Quartile deviation
d. Quartile deviation < Mean deviation > Standard deviation

Ans. a

4. Coefficient of correlation is independent of which of the following?
a. Change of origin only
b. Change of scale only
c. Change of origin and scale
d. None of the above
Ans. b
5. Which one of the following indices satisfies both time reversal and factor reversal tests?
a. Laspeyre’s index number
b. Fisher’s index number
c. Paasche’s index number
d. Kelly’s index number

Ans. a

6. Which one of the following index numbers is based on geometric mean?
a. Laspeyre’s index number
b. Fisher’s index number
c. Paasche’s index number
d. Bowley’s index number

Ans. c

7. Assertion (A): The Revealed Preference Hypothesis excludes the study of Giffen Paradox.

Reason (R): Revealed Preference Hypothesis Considers only negative income elasticity of demand whereas Giffen Paradox Giffen Paradox relates to Positive elasticity of demand.
a. Both A anti R are individually true and R is the correct explanation of A
b. Both A and R are individually true and R is not the correct explanation of A
c. A is true but R is false
d. A is false but R is true
Ans. a

8. If the Paasche’s index is 196 and Fishers’ index is 210, what is the value of the Laspeyre’ index?

(a) 220

(b) 215

(d) 230

Ans. (c)

9. consider the following statements

The coefficient of correlation.

1. is not affected by a change of origin and scale.

2. lies between —a and + ct

3. is a relative measure of linear association between two or more variables.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3

(d)1, 2 and 3

Ans. (c)

10. In a certain distribution, the following results were obtained

X = 45, Median = 48, Coefficient of skew ness = — 0.3.

What is the value of standard deviation?

(a) 20

(b) 25

(d) 30

Ans. (d)

11. The first quartile derived from set of observations is 27 and its quartile deviation is 17. What is its third quartile?

(a) 59

(b) 61

(d) 57

Ans (b)

12. What is a cumulative percentage curve called?

(a) Frequency density curve

(b) Ogive curve

(d) Frequency polygon

Ans. (b)

13. Assertion (A) : Fisher’s index number is an ideal one.

Reason (R) : In the Fisher’s index number, the upward bias of Laspeyre’s index and downward bias of Paasche’s index are balanced to a great extent.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true -

Ans. (c)

14. Match List I (Measures of Dispersion) with List II (Characteristics) and select the correct answer using the code. given below the lists:

List I List II .

A. Range 1.Relative measure of dispersion

B.Variance 2.Uses limit d information

C.Coefficient of variation 3.Standard deviation

D. Inter-quartile range 4.Lower than range

5.Greater than range

A B C D

(a) 2 3 I 4

(b) 1 4 5 3

(d) I 3 5 4

Ans. c

15. Consider the following statements:

According to the life-cycle hypothesis, assuming a linear consumption function, other things remaining the same, an increase in life expectancy will

I. increase the marginal propensity to consume.

2. decrease the marginal propensity to consume.

3. leave the marginal propensity to consume unchanged

4. decrease the average propensity to consume.

Which of the statements given above is/are correct?

(a) 1 and 4

(b) 2 and 4

(d) 3 only

Ans. c

16. Match List I (Curve) with List II (Equilibrium) and select the correct answer using the code given below:

List I List II

A. LM curve 1. Equilibrium in labour and money markets

B. AD curve 2. Equilibrium in money market

C. AS curve 3. Equilibrium in labour market

D. IS curve 4. Equilibrium in goods and money market

5. Equilibrium in goods market

A B C D

(a) 5 4 3 2

(b) 2 3 I 5

(d) 2 4 3 5

Ans. a

17. Consider the following statements:

According to the life-cycle hypothesis, assuming a linear consumption function, other things remaining the same, an increase in life expectancy will

I. increase the marginal propensity to consume.

2. decrease the marginal propensity to consume.

3. leave the marginal propensity to consume unchanged

4. decrease the average propensity to consume.

Which of the statements given above is/are correct?

(a) 1 and 4

(b) 2 and 4

(d) 3 only

Ans. a

18. For the calculation of percentile, the data should be arranged in?
(A) Ascending order
(B) Descending order
(C) Random order
(D) Either random or descending order

Ans. a

19. As per BASEL-II norms, a bank’s capital to risk weighted assets ratio (CRAR) should be at least?
(A) 8%
(B) 10%
(C) 12%
(D) 14%

Ans. c

20. The shape of a frequency curve cannot be?
(A) U-shaped
(B) V Shaped
(C) J-shaped
(D) S-shaped

Ans. d

21. Which of the following is average of second order?
(A) Arithmetic mean
(B) Geometric mean
(C) Second quartile
(D) Standard deviation

Ans. d

22.. Which average is most affected by the extreme observations?
(A) Arithmetic mean
(B) Geometric mean
(C) Median
(D) Mode

Ans.a

23.If the covariance of two variables is equal to the product of the standard deviations of the variables, then the correlation
coefficient will be?
(A) -1
(B)+1
(C) 0
(D) Between 0 and -1

Ans. b

24. Which one of the following properties shows the high degree of dispersion?
(A) Homogeneity
(B) Consistency
(C) Uniformity
(D) Variability

Ans. d

25. Mean deviation is always?

(A) Equal to the standard deviation than the standard
(B) Less than the standard deviation
(C) More than the standard deviation
(D) Twice of the standard deviation

Ans. b

26. The coefficient of alienation is known as?
(A) Against correlation
(B) Against variance
(C) Against association
(D) Against determination

Ans. d

27. Density test is used for?
(A) Median
(B) Mean
(C) Mode
(D) Quartile

Ans. c

28. A simple correlation can defined as the tendency of?
(A) Independent variation
(B) Dependent variation
(C) Simultaneous variation
(D) Instantaneous variation

Ans.b

29.For n consecutive natural numbers, the following relationship is correct?
(A) Mode = Mean
(B) Mean = Median
(C) Mode > Median
(D) Mode < Mean

Ans.b

30. The measure of the degree of association between the values of two random variables is called?
(A) Correlation
(B) Association
(C) Regression
(D) Co-variance

Ans.a

31.In any set of numbers, the geometric mean exists only when all numbers are?
(A) Positive
(B) Negative
(C) Zero
(D) Positive, zero or negative

Ans. a

32. If correlation coefficient is equal to zero, then variables will be?
(A)Associated
(B)Correlated
(C)Independent
( D) Dependent

Ans c

33. Which of the following curves is not ‘U’ shaped?
(A) Average Cost Curve
(B) Average Variable Cost Curve
(C) Average Fixed Cost Curve
(D) Marginal Cost Curve

34.Loss of information occurs during?
(A) Collection of data
(B) Presentation of data
(C) Classification of data
(D) Interpretation of data

35. Which of the following indices is based on only base year quantities?

(A) Laspeyre’s index
(B) Fisher’s index
(C) Kelley’s index
(D) Pasche’s index

36. The Utility Index Number has been developed by?
(A) Marshall and Edgeworth
(B) Hall and Hitch
(C) Neumann and Morgenstern
(D) Hicks and Hanson

37. The best average for the construction of index number is?
(A) Geometric mean
(B) Arithmetic mean
(C) Harmonic mean
(D) Weighted mean

38. The Durbin-Watson test is used for?
(A) Autocorrelation
(B) Multiple correlation
(C) Partial correlation
(D) Simple correlation

39. If two regression lines are perpendicular to each other, the correlation coefficient will be?
(A)+1
(B) —1
(C)Zero
(D) Indetermined

40. Which of the following has highest quantitative value in a positively skewed distribution?
(A)Mean
(B) Median
(C)Mode
(D) First quartile

41. Which of the following is also known as mixed sample?
(A) Systematic sample
(B) Stratified sample
(C) Random sample
(D) Multi-stage sample

42. Arithmetic mean of deviation is always?
(A) A positive value
(B) A negative value
(C) Equal to zero
(D) Equal to one

43. Charlier’s check for accuracy is used for?
(A)Mean
(B)Median
(C)Correlation
(D) Standard deviation

44. The correlation coefficient is independent of?
(A) Change of scale only
(B) Change of origin only
(C) Both the changes of scale and origin
(D) Neither the change of origin nor the change of scale

45. The data represented through arithmetic line graph help in understanding?
(A)Trend
(B) Randomness
(C) Cyclicity
(D) Seasonality

46. Frequency density of a class is defined as—
(A) Frequency of the class/Interval of the class
(B) Frequency of the class/ Cumulative frequency for the class
(C) Cumulative frequency for the class/Frequency of the class
(D) Frequency of the class/ Frequency of the previous class

47. Which of the following is statistics?
(A) Profit of a firm has gone up
(B) The production of wheat has increased
(C) The temperature of Delhi is 5 degree more than the temperature of Mumbai
(D) The birth rate has declined in India

48. The formula for determination of number of class-interval for a frequency distribution is given by?
(A) Connor
(B) Spur
(C) Sturges
(D) Secrist

49. The positional average is shown by ?
(A) Mean deviation
(B) Standard deviation
(C) Mean
(D) Median

50. The shutdown point is that level of output of a firm where?
(A) MC=AFC
(B) MC=AVC
(C) MC=TFC
(D) MC=TVC

51. Correlation coefficient is significant if it is?
(A) Less than 6 times of pro able error
(B) More than 6 times of probable error
(C) Equal to probable error
(D) Equal to standard error

52. Root mean square of all the deviations is known as?
(A) Mean deviation from median
(B) Mean deviation from mode
(C) Standard deviation
(D) Quartile deviation

53. If there is perfect correlation between two variables, then the regression lines are?
(A) Parallel
(B)Perpendicular
(C)Coincidental
(D)Intersectional

54. Which of the following type of facts are not Considered under the study of statistics
(A) Quantitative facts
(B) Qualitative facts
(C) Comparative facts
(D) Relative facts

55. The statistical calculations in classified data are based on?
(A) The actual values of observations
(B) The upper class limits
(C) The lower class limits
(D) The mid-points of the classes

56. The concept of merit goods has been introduced by?
(A)Buchanan
(B) Musgrave
(C)Samuelson
(D) Tiebout

57.Stratified sampling is preferred, where?
(A) Population is homogeneous
(B) Population is heterogeneous
(C) Random sampling is not possible
(D) Small samples are required

58. Which of the following is totally different from logical multiplier?
(A) Instant multiplier
(B) Lagless multiplier
(C) Static multiplier
(D) Dynamic multiplier

59.Availability hypothesis explains a country’s
(A) Production capacity
(B) Natural resources availability
(C) Commodity composition of foreign trade
(D) Consumption pattern

60. The relative measures of dispersion are generally called?
(A) Dispersion coefficient
(B) Dispersion multiplier
(C) Dispersion accelerator
(D) Dispersion variable

61. Which of the following is not expressed by a transformation curve?
(A) Choice
(B) Scarcity
(C) Factor price
(D) Opportunity cost

62 . Suppose, MPC falls. The IS curve shifts to the left. Then what happens ceteris paribus?
(a) The level of equilibrium becomes lower
(b) The level of equilibrium becomes higher
(c) There is no change in equilibrium
(d) Only the rate of interest becomes lower

Ans: a

63. The author of employment multiplier is:
(a) Lord Beveridge
(c) R. V Kahn
(b) J. M . Keynes
(d) J.R. Hicks
Ans: c

64. According to the permanent income hypothesis. the
(a) long-run aggregate Average Propensity to Consume (APC) equals the long-run aggregate Marginal Propensity to Consume (MPC)
(b) long-run aggregate APC is greater than the long- run aggregate MPC.
(c) long-run aggregate APC is less than the long-run aggregate MPC.
(d) APC of every individual is equal irrespective of different will be encouraged.
Ans: a

65 Super multiplier refers to:
(a) interaction of the mu1t and the accelerator.
(b) reciprocal of the marginal propensity to consume.
(c) capital output ratio
(d) budget multiplier.
Ans: a

66. consider the following statements

The coefficient of correlation.

1. is not affected by a change of origin and scale.

2. lies between —a and + ct

3. is a relative measure of linear association between two or more variables.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 and 3

(d)1, 2 and 3

Ans. (c)

67. In a certain distribution, the following results were obtained

X = 45, Median = 48, Coefficient of skew ness = — 0.3.

What is the value of standard deviation?

(a) 20

(b) 25

(d) 30

Ans. (d)

68. The first quartile derived from set of observations is 27 and its quartile deviation is 17. What is its third quartile?

(a) 59

(b) 61

(d) 57

Ans (b)

69. What is a cumulative percentage curve called?

(a) Frequency density curve

(b) Ogive curve

(d) Frequency polygon

Ans. (b)

70. Assertion (A) : Fisher’s index number is an ideal one.

Reason (R) : In the Fisher’s index number, the upward bias of Laspeyre’s index and downward bias of Paasche’s index are balanced to a great extent.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true -

Ans. (c

71. Which of the following is not correct in respect of Cobb-Douglas production function?

(a) It was originally based on the empirical study of US manufacturing industry.

(b) It is a linearly homogeneous production function, taking into account two factors, labour and capital, for the entire output of the manufacturing industry.

(c) It tells us that output depends upon labour and capital, and that part of output which cannot be explained by labour and capital, is attributed to the residual.

(d) It is based on the assumption of operation of law of diminishing returns.

Ans. (d)

72. Which one of the following statements is correct? If the elasticity of substitution between two factors X and Y be zero, then it implies that for a given change in outputs,

(a) X and Y will always change by the same proportion

(b)Y changes but X remains the same

(d) X and Y both change necessarily by different proportion

Ans. (a)

73 Consider the following statements:

According to the law of variable proportions; total product is maximum when

A. marginal product becomes zero.

B. marginal product curve cuts average product curve from above.

C. slope of marginal product curve is zero.

D. tangent of the total product curve is parallel to the horizontal axis.

Which of the statements given above are correct?

(a) A and D

(b) C and D

(d) B and C

Ans. (c)

74. Assertion (A): The monopolist never operates on the portion of the demand curve which is inelastic. Reason (R) When elasticity of demand is less than unity MR is negative.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans (a)

75. Assertion (A): The Revealed Preference Hypothesis excludes the study of Giffin Paradox

Reason (R) Revealed Preference Hypothesis considers only negative income elasticity of demand whereas Giffin Paradox relates to positive elasticity of demand.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (c)

76. Assertion (A): Indifference curve for perfect substitute goods is a downward sloping straight line. Reason (R): For perfect substitute goods, MRS is falling.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (a)

77. Assertion (A): There is no excess capacity under monopolistic competition in the long run. Reason (R): The demand curve under monopolistic competition is downward sloping.

Codes:

(a) Both A and Rare individually true and R is the correct explanation of A

(b) Both A and R are individually true but R is not the correct explanation of A

(d) A is false but R is true

Ans. (d

78. Which one of the following statements is correct?

The Engel Curve for Giffen goods is

(a) positively sloped

(b) negatively sloped

(d) horizontal

Ans. (b)

79. Which one of the following statements is correct? According to the classical economists, the existence of unemployment at any time is only of temporary nature and can be considered as

(a) structural unemployment

(b) cyclical unemployment

(d) disguised unemployment

Ans. (c)

80. Match List- I (Concept) with List -II (Economist) and select the correct answer using the codes given below the lists:

List I List II

(Concept) (Economist)

A. Liquidity trap 1. M. Friedman

B. Demonstration effect 2. A.C. Pigou

C. Permanent income hypothesis 3. J. Duesenberry

D. Wealth effect 4. J.M. Keynes

Code:

A B C D

(a) 4 3 1 2

(b) 1 2 4 3

(d) 1 3 4 2

Ans. (a)

81. Directions: The following item consists of two statements, one labelled as the ‘Assertion (A) ‘and the other as’ Reason (R)’ — You are to examine these two statements carefully and select the answer using the code given below.

Assertion (A) : The doctrine of unbalanced growth is based on creation of imbalances in the economy in a conscious manner.

Reason (R) : Unequal development of various sectors often generates conditions for rapid development.

Code:

(a) Both A and R are individually true and R is the correct explanation o &

(b)Both A and R are individually true, but R is not correct explanation bf A

(d) A is false, but R is true

82. Frequency density of a class is defined as—
(A) Frequency of the class/Interval of the class
(B) Frequency of the class/ Cumulative frequency for the class
(C) Cumulative frequency for the class/Frequency of the class
(D) Frequency of the class/ Frequency of the previous class

83. Which of the following demand curves is not a constant elasticity curve?
(A) Vertical
(B) Horizontal
(C) Linear
(D)Rectangular hyperbola

84. The formula for determination of number of class-interval for a frequency distribution is given by?
(A) Connor
(B) Spur
(C) Sturges
(D) Secrist

85. Firms have chronic excess production capacity in?
(A) Duopoly
(B) Oligopoly
(C) Pure competition
(D) Monopolistic competition

86. The positional average is shown by ?
(A) Mean deviation
(B) Standard deviation
(C) Mean
(D) Median

87. If there is perfect correlation between two variables, then the regression lines are?
(A) Parallel
(B)Perpendicular
(C)Coincidental
(D)Intersectional

88. The statistical calculations in classified data are based on?
(A) The actual values of observations
(B) The upper class limits
(C) The lower class limits
(D) The mid-points of the classes

89.Availability hypothesis explains a country’s
(A) Production capacity
(B) Natural resources availability
(C) Commodity composition of foreign trade
(D) Consumption pattern

90. The relative measures of dispersion are generally called?
(A) Dispersion coefficient
(B) Dispersion multiplier
(C) Dispersion accelerator
(D) Dispersion variable

91. The best average for the construction of index number is?
(A) Geometric mean
(B) Arithmetic mean
(C) Harmonic mean
(D) Weighted mean

92. The Utility Index Number has been developed by?
(A) Marshall and Edgeworth
(B) Hall and Hitch
(C) Neumann and Morgenstern
(D) Hicks and Hanson

93. The Durbin-Watson test is used for?
(A) Autocorrelation
(B) Multiple correlation
(C) Partial correlation
(D) Simple correlation

94. If two regression lines are perpendicular to each other, the correlation coefficient will be?
(A)+1
(B) —1
(C)Zero
(D) Indetermined

95. Which of the following has highest quantitative value in a positively skewed distribution?
(A)Mean
(B) Median
(C)Mode
(D) First quartile

96. Which of the following is also known as mixed sample?
(A) Systematic sample
(B) Stratified sample
(C) Random sample
(D) Multi-stage sample

97. Charlier’s check for accuracy is used for?
(A)Mean
(B)Median
(C)Correlation
(D) Standard deviation

98.The empirical study of economic theories is considered under?
(A) Aggregate economics
(B) Applied economics
(C) Social economics
(D) Welfare economics

99. Which of the following index numbers satisfies both time-reversal test and

factor-reversal test?

(a) laspeyre’s index number

(b) Paasche’s index number

(d Drobish and Browley index number

100. Match List I (Measures of Dispersion) with List II (Charac eristics) and

select the correct answer using the code. given below the lists:

List I List II

A. Range 1. Relative meas re of dispersion

B. Variance 2. Uses limited information

C. Coefficient of variation 3. Standard deviation

D. Inter-quartile range 4. L wer than range

5. Greater than range

ABCD

(a) 23I4

(b) 1453

(d) I354

Result Oriented SSC & Bank Exam Preparation Tips

Wednesday, April 17, 2013

UNIT X UGC NET ECONOMICS PAPER III MCQS

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