# IES INDIAN ECONOMIC SERVICE 2022 QUESTION PAPER 1 2 3 4 WITH COMPLETE SOLUTION

IES INDIAN ECONOMIC SERVICE 2022 QUESTION PAPER 1 2 3 4 WITH COMPLETE SOLUTION

IES GENERAL ECONOMICS PAPER 1-2022

GENERAL ECONOMICS

PAPER 1

Time Allowed: Three Hours

Maximum Marks: 200

Question Paper Specific Instructions

Please read each of the following instructions carefully before attempting questions:

There are THIRTEEN questions divided under THREE sections.

The ONLY question in Section A is compulsory.

In Section B FIVE out of SEVEN questions are to he attempted

In Section C, THREE out of FIVE questions are to be attempted.

Candidates should attempt questions/parts as per the instructions given in the sections.

The number of marks carried by a question/part is indicated against it.

Candidates are required to write clear, legible and concise answers.

Attempts of questions shall be counted in sequential order. Unless struck off, attempt of question shall be counted even if attempted partly.

Any page or portion of the page left blank in the Question-cum-Answer (QCA) Booklet must be clearly struck off.

Answers must be written in ENGLISH only.

SECTION A

(Compulsory Section)

Q1. Answer all the following seven parts. 5×7=35

(a)Show that the ordinary demand curve will have a greater demand

elasticity than the compensated demand curve. 5

(b)Discuss the Lerner Index of monopoly power. 5

(c)Illustrate graphically the effects of advertising on price and output in monopolistic competition. 5

(d)Distinguish between Partial Equilibrium and General Equilibrium

Approaches. 5

(e)"The social optimal output occurs where Marginal Social Benefits (MSBS) equal Marginal Social Costs (MSCs)." Examine the statement. 5

(f) Solve the following 2*2 game :

B1

B2

A1

2

3

A2

4

-1

Player A

Player B

(g) Show that TSS = ESS + RSS.

SECTION B

Answer any five out of the following seven questions: 18×5=90

Q2.Consider the 2-variable linear regression model:

Yi = α + βX i; + Ui , i= 1, 2,….., n,

where notations have their usual meanings.

(a)Estimate the parameters α and β by the OLS method. Also estimate standard errors of these estimates. 10

(b)Describe the testing procedure of B and estimate the 95% confidence interval of B. 08

Q3. (a) Define Indirect Utility Function. Derive the Indirect Utility Function from the Direct Utility Function. 06

(b)Consider the Indirect Utility Function:

V = M²

4P1P2

where notations have their usual meanings.

Derive the demand functions for x₁ and x2. 06

(c)Consider the utility function and budget equation of a consumer respectively:

U = x1x2,

M = p1 x1 + p2 x2,

where notations have their usual meanings.

Derive the expenditure function of the consumer. 06

Q4. (a) Show that a monopolists produces output in the elastic range of demand. 08 Q6. Consider an economy consisting of two consumers, one producer, one ordinary good, one public good and one primary factor. Show that Pareto optimality conditions are not valid for the public good. 18 Q7. (a)Explain the concept of stability and its different types. 6 (b)Explain the stability conditions in a single market both in the Walrasian process and Marshallian process. 12 Q9. (a)Consider the first-order autoregressive scheme in the general regression model. How would you estimate the variance, covariance and autocorrelation coefficient of the disturbance term of the model? 9 (b)Describe the Durbin-Watson (DW) test of autocorrelation. 7 (c)Given a sample of 50 observations and 4 explanatory variables, what can you say about autocorrelation if the computed Durbin-Watson (DW) values are: (i) 1-05, (ii) 2.50 and (iii) 3-97? [DWL= 1·378, DWU = 1.721 at 5% level of significance, n = 50, k = 4] 9 Q10. (a)Graphically explain the Lorenz curve as a measure of income inequality. 5 (b)How would you derive the Gini coefficient from the Lorenz curve ? 10 (c)How would you derive the Gini coefficient from the Pareto law of income distribution ? 10 Q11. (a)"It is not possible to construct social preferences from individual preferences without violating one or more of the five axioms." Examine the statement given by Arrow. 12 (b)Consider the economy with two goods and fixed factor supplies. Assume that the social welfare function defined in commodity space : w = (x₁ + 2) x2 and that society's implicit production function x₁ -2x2 - 1 = 0. 6 (c) Explain ‘Compensation Principle’ and ‘Test Criteria’ formulated by Hicks-Scitovsky. 7

IES GENERAL ECONOMICS PAPER 2-2022

GENERAL ECONOMICS

Paper - II

Time Allowed: Three Hours

Maximum Marks: 200

Question Paper Specific Instructions

Please read each of the following instructions carefully before attempting

questions:

There are SIXTEEN questions divided under THREE sections.

The ONLY question in Section A is compulsory.

In Section B, SIX out of NINE questions are to be attempted.

In Section C, FOUR out of SIX questions are to be attempted.

Candidates should attempt questions/parts as per the instructions given in the sections.

The number of marks carried by a question/part is indicated against it.

Candidates are required to write clear, legible and concise answers and to adhere to word limits, wherever indicated. Failure to adhere to word limite may be penalized.

Attempts of questions shall be counted in sequential order. Unless struck off, attempt of a