WEST BENGAL CIVIL SERVICE
EXAMINATION - 2005
Economics Paper-I
Time Allowed-3 Hours Full Marks-100
If the question attempted are in excess of the prescribed number, only the questions attempted first up to the prescribed number shall be valued and the remaining ones ignored.
Answer may be given either in English or in Bengali but all answers must be in one and the same language.
Answer and five questions, taking at least two from each group.
Group - A
1. (a) Clearly differentiate between the Hicksian substitution effect and the Slutsky substitution effect. Hence explain the difference between the Hicksian compensated and the Slutsky compensated demand curves. 3+3+3+3=12
(b) Using the notion of income and substitution effects establish the truth of the following proposition : More of a commodity will be purchased by a consumer when its price falls (when income is constant) if more is purchased when income falls (when prices are constant). 8
2. (a) Explain the process of long-run equilibrium adjustments for a single-plant monopolist,
(b) Will an monopolist be inclined to produce if the demand for his product is always unitary elastic ?
(c) Why there is no supply curve of a monopolist ?
(d) Discuss and compare the effects of imposition of price control on a competitive industry and a monopolist. 6+4+4+6=20
3. Explain the Quantity Theory of Money. Will this theory be valid if you introduce Keynesian liquidity preference function (in place of each-balance equation) in an otherwise classical model. 10+10=20
4. (a) How do you defferentiate between a demand-pull from cost- push inflation ? Is it possible to separate out demand-pull from costpush inflation in practice ?
(b) Why is cost-inflation more difficult to control than demand-inflation ?
(c) Briefly explain the trade-off between inflation and unemploment. 8+6+6=20
Group - B
5. Discuss the advantage and disadvantages of expenditure tax compared to these of income tax. 10+10=20'
6. (a) Establish the Hecksher Ohlin theory of trade in terms of price definition of factor abundance under fixed coefficient technology.
(b) In what respect does it represent an advance over the Ricardian theory of trade ?
(c) Show that factor intensity reversal in neither necessary nor sufficient for Factor price equalisation theorem to held. 6+4+10=20
7. (a) Distinguish between economic development.
(b) How far is it advisable to use per capita income as an index of development of under-development.
(c) Elucidate Lewis model of growth with unlimited supply of labour.
8. Write short notes on any two of the following :
(a) Leontief paradox.
(b) Monetarism and crowding-out effect.
(c) Law level equilibrium trap
(d) Warranted rate of growth and natural rate of growth. 10+10=20
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