Section - A
1. (Answer all the SEVEN parts of the following question. Answer to each part should be in approximately 100 words.)
Marks: 5 × 7 = 35
(a) The laffer curve
(Comment for solution.)
(b) Merit goods
(Comment for solution.)
(c) Hedonic valuation method
(Comment for solution.)
(d) Race to the bottom
(Comment for solution.)
(e) Tax interaction effect
(Comment for solution.)
(f) Shadow price of investment
(Comment for solution.)
(g) Incomplete markets.
(Comment for solution.)
Section - B
(Answer any SIX out of the SEVEN questions. Each answer should be in about 200 words.)
Marks: 15 × 6 = 90
2. What are the major recommendations of 14th Finance Commission Discuss the implications of tied and untied grants from Union to States and local bodies.
(Comment for solution.)
3. What is the significance of the choice of discount rate in the cost-lenefit analysis? How a specific discount rate is determined for appraising a project?
(Comment for solution.)
4. Define the concept of sustainable development. Discuss the indicators cf sustainable development.
(Comment for solution.)
5. Compare and contrast between command and control and economic ncentives instruments. Which one is superior?
(Comment for solution.)
6. Assume that the Government decides to impose a unit tax on the producers of the medicine insulin. Which are the plausible effects of the tax incidence on producers and consumers?
(Comment for solution.)
7. Two pharmaceutical firms approached the Competition Commission of India (CCI) for their marger. What consideration CCI should take into account to approve or reject their request?
(Comment for solution.)
8. Indian Software industry has done well in the world market in the last two decades; why other industries are not able to emulate it?
(Comment for solution.)
Section - C
(Answer any THREE of the following FOUR questions in about 300 words each.)
Marks: 25 × 3 = 75
9. Suppose the price of electricity is less than the marginal cost of production.
(a) Is electricity production efficient? If not, explain how to move to a Pareto preferred allocation.
(b) Will the market economy produce electricity if the price is less than the marginal cost? Explain.
(Comment for solution.)
10. Discuss how the saving is taxed under an Incoem Tax and a Consumption Tax. Which tax is more efficent and equitable and why?
(Comment for solution.)
11. Explain the role of futures markets in agricultural commodity trading in India. Suggest measures to strengthen these markets.
(Comment for solution.)
12. Which policy instrument is likely ot encourage greater diffusion of pollution abatement technologies: technology standards or emission charges? Why ?
(Comment for solution.)
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