WEST BENGAL CIVIL SERVICE
EXAMINATION - 2004
Economics Paper-I
Time Allowed-3 Hours Full Marks-100
Group - A
1. (a) Distinguish between returns to a variable factor and returns to scale.
(b) Write a brief note on the Cobb-Douglas production function.
(c) A firm faces the production function Q = L6 k5 with input prices PL = Rs.12 and Pk = Rs. 24. (Q = quantity, L= labour, K= capital, PL = price of labour and Pk = price of capital). The inputs are equally productive, but capital is twice as expensive as labour. Find out the cost-minimizing input mix. 7+8+5
2. (a) How does a monopolist determine his equilibrium output and price ?
(b) Explain why the profit-seeking monopolist always operates on the elastic part of the demand curve. 12+8
3. (a) What is meant by the optimum size of a firm ?
(b) What factors determine the optimum size ? 6+14
4. (a) Distinguish between demand-pull and cost-push inflation.
(b) What measures would you suggest for the control of inflation ? 8+12
5. Do you think that an internally held public debt imposes a burden on the economy ? 20
Group - B
6. Explain how the inconsistency between Say's Law of Markets and the Quantity Theory of Money is related to the classical conception about the functions of money. 20
7. (a) What is meant by the marginal efficiency of capital ?
(b) Discuss the factors which influence the marginal efficiency of capital. 10+10
8. Discuss the role of international trade in the development of less developed countries. 20
9. (a) Distinguish between economic development and economic growth
(b) Explain the 'critical minimum effort' thesis of economic development. 8+12
10. Write short notes on any two of the following:
(a) Leakages from the multiplier
(b) Free trade Vs. protection
(c) Role of technology in economic development
(d) Expenditure tax. 10 x 10
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