Previous Year Paper Solution | Indian Economic Service Exam 2022 | General Economics - III

Section - A

1. Answer all the following parts in about 100 words each :

Marks: 5 × 6 = 30

(a) Differentiate bequest value and existence value with examples.

(Comment for solution.)


(b) What is the rationale behind zero-based budgeting ?

(Comment for solution.)


(c) Clarify why a monopolist does not have a supply curve.

(Comment for solution.)


(d) Explain Laffer Curve with a diagram.

(Comment for solution.)


(e) What are India's Green Growth Challenges ?

(Comment for solution.)


(f) 'The decentralized planning effectively redues the regional disparities.' Substantiate your views.

(Comment for solution.)


Section - B

Answer any six questioin out of the following nine in about 200 words each :

Marks: 15 × 6 = 90

2. 'Collective actions by local communities can help to control the environmental degradation.' Explain.

(Comment for solution.)


3. Give an account of the Theory of Contestable Market propounded by W.J. Baumol.

(Comment for solution.)


4. Using suitable diagram, show that under monopoly, the consumer surplus is lower, but the producer surplus is higher than of a perfect competitive market.

(Comment for solution.)


5. 'Patents grant monopoly power and hence necessarily reduce the short term and long term welfare of the economy.' Argue in favour or against the statement.

(Comment for solution.)


6. Distinguish between institutions and organizations. How can they lead to path dependency ?

(Comment for solution.)


7. Explai the doctrine of Environmental Kuznets curve with diagram. How does the sound environmental regulations shift the curve ?

(Comment for solution.)


8. Discuss the significance of the Principle of Ability to pay in the context of justified equality in the payment of tax.

(Comment for solution.)


9. Elucidate the importance of monetary policy in managing the public debt.

(Comment for solution.)


10. Would you identify the expenditure to save the white tigers in India as use value ? Elaborate.

(Comment for solution.)


Section - C

Answer any four questioin out of the following six in about 300 words each :

Marks: 20 × 4 = 80

11. Explain different categories of market-based instruments to control environmental pollution.

(Comment for solution.)


12. 'Market economy and development planning complement each other.' Elaborate your views on this.

(Comment for solution.)


13. Present the basic arguments and discussions of Kyoto Protocol and Paris Climate Agreements. Identify the status of the US in these agreements. What is carbon credit ?

(Comment for solution.)


14. 'The unskilled surplus labour is a source for increasing foreign exchange.' Substantiate.

(Comment for solution.)


15. Cost-Benefit Analysis has been developed to make expenditure decisions more appropriate. Explain the statement with your comments.

(Comment for solution.)


16. (a) 'Kinked demand hypothesis is not a theory of pricing, but a tool for explaining why is price sticky in oligopoly'. Discuss.

(Comment for solution.)


(b) A monopolist has two demand functions in two separate markets. They are :
If the marginal cost of the monopolist is ₹ 10 and his fixed cost is ₹ 50, find the equilibrium prices and quantities in the two markets. How do they change if the fixed cost changes to ₹ 100 ?

(Comment for solution.)