# Test code: ME I/ME II, 2004 Syllabus for ME I

Matrix Algebra: Matrices and Vectors, Matrix Operations, Determinants, Nonsingularity, Inversion, Cramer’s rule. Calculus: Limits, Continuity, Differentiation of functions of one or more variables, Product rule, Partial and total derivatives,Derivatives of implicit functions, Unconstrained optimization (first and second order conditions for extrema of a single variable and several variables). Taylor Series, Definite and Indefinite Integrals: standard formulae, integration by parts and integration by substitution. Differential equations. Constrained optimization of functions of a single variable. Theory of Sequence and Series: Linear Programming: Formulations, statements of Primal and Dual problems. Graphical Solutions. Theory of Polynomial Equations (up to third degree) Elementary Statistics: Measures of central tendency; dispersion, correlation, Elementary probability theory.

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5 4. 4 . If one root of the equation is –1. 5 (B) 8 . respectively. 5 a < b < c. and .P (2). p ) . the other root is (A) − 3. B and C. 5 (C) 4 . 5 (D) 5. 2004 For each of the following questions four alternative answers are provided. f ( x ) = ( x − a ) 3 + ( x − b)3 + ( x − c )3 . 3 4 5 4 .Sample Questions for ME I (Mathematics). 1. (D) . 5 (C) 1 . (C) 1. 5 (B) 2 . Call them ρ1 and ρ 2 . A problem of statistics is given to the three students A. respectively. Then 2 . (C) . (B) n . The number of real roots of f ( x ) = 0 is (A) 3. The maximum value of Var (X) is n n 1 (A) . Suppose correlation coefficients between x and y are computed from (i) y = 2 + 3 x and (ii) 2 y = 5 + 8 x . X ~ B(n. P (x) is a quadratic polynomial such that P (1) = . 5 8 (D) − . 4 2 n 2. (B) 2. Choose the answer that you consider to be the most appropriate for a question and write it in your answer book. (D) 0. Their probabilities of solving it independently are The probability that the problem will be solved is (A) 3 . 1 1 1 .

. y ) V ( x) V ( y ) . In the linear regression of y on x. y ) . Suppose f ( x) = e x then  x + x 2  f ( x1 ) + f ( x 2 ) (A) f  1 for all x1 and x 2 and x1 ≠ x 2 .. (D) none of . y ) V ( x) these. (D) either ρ1 > ρ 2 or ρ1 < ρ 2 . (B) ρ 2 > ρ1 . (D) there exists at least one pair (x1 .  x + x 2  f (x1 ) + f ( x 2 ) f 1 for some values of x1 and x 2 and < 2  2  x1 ≠ x 2 . Then the slope parameter for the linear regression V ( x) of x on y is given by (A) V ( x) Cov( x. 2 2 2 2 3 Cov( x. (B) . y ) . < 2  2   x + x 2  f ( x1 ) + f (x 2 ) (C) f  1 for some values of x1 and x 2 and > 2  2  x1 ≠ x 2 . > 2  2   x + x 2  f (x1 ) + f ( x 2 ) (B) f  1 for all x1 and x 2 and x1 ≠ x 2 . x1 ≠ x 2 such that  x + x 2  f ( x1 ) + f ( x 2 ) f 1 = 2  2  8. the estimate of the slope parameter is given by Cov( x. Consider the series (i) and (ii) defined below: (i) 1 2 3 4 + 2 + 3 + 4 + . (C) Cov( x. 7. x 2 ). (C) ρ1 = ρ 2 .(A) ρ1 > ρ 2 . 6.

(D) 1 and –1 as the limits. but the second series does not converge. (D) both diverge. 2 2 2 2 has (A) diverges. (D) continuous everywhere but not differentiable anywhere.. 10. (C) converges to a number greater than 2. but the first series does not converge. + . The function x x is (A) discontinuous at x = 0. (C) both converge. (D) none of these. The sequence (− 1) (A) no limit.. (B) the second series converges.. 2 2 3 3 4 n n +1 n +1 1 1 1 1 + 2 + 3 + 4 + . (C) differentiable at x = 0. Consider the function 4 . (B) 1 as the limit. (B) continuous but not differentiable at x = 0.and (ii) Then. 1 1 1 1 1 1 1 + .. The series 1. (B) converges to a number between 0 and 1. 11. (A) the first series converges. (C) –1 as the limit. + .. + . + .. 9. 12.

The equation of its locus is (A) x 2 + y 2 + 10ax + a 2 = 0. 2 (D) − 1 . (B) cot u . (D) none of these.. 2 15. Five boys and four girls are to be seated in a row for a photograph. 0) and (a.xt −1 f (x ) = t . The deviative of tan −1   with respect to x is  1 + sin x  (A) − x x .  cos x  14. (C) exists and is discontinuous at exactly one point.. The number of ways in which they can be so arranged is (A) 6 P4 × 5 . 3 (C) 3 7 15 31 + + + + . 5 . It is desired that no two girls sit together. (D) none of these. then x ∂x + y ∂x is equal to    −1 (A) sin u cos u . 2 2 (C) 1 . x +1 (x > 0) The limit of the function as t tends to infinity. (B) exists and is everywhere continuous. (D) none of these. 3 16. (D) exists and is discontinuous at exactly two points. A point moves so that the ratio of its distance from the points (-a. 17. (C) 4 × 5 . (B) . (C) tan u . The sum of the infinite series 1 + (A) 2 .  x2 + y2  ∂u ∂u 13. 3 (B) 4 . (B) 5 x 2 + 5 y 2 + 26ax + 5a 2 = 0. (A) does not exist. If u = sin   x + y  . (C) 5 x 2 + 5 y 2 − 26ax + 5a 2 = 0. 0) is 2:3. is 4 16 64 256 8 . (B) 4 P2 × 5 .

4 ) . (B) G. 21. (A) 3. (C) multiple optimal solutions. d are in G. 1) .P. x 2 ≥ 0 has (A) a unique optimal solution. ( ) . (D) no feasible solution. If the sum. ∑ x =1 100  x. 1) . (C) H. 1) . The number of real roots of the equation x2 − 3 x + 2 = 0 is 6 22.P. (C) (0. The distance of the curve. 20. but no optimal solution. ∞ ) ..  2 4 x1 + x 2 − 3 x1 + 2 x 2 ≤ −1 x1 − x 2 ≤ 2 x1 ≥ 0.(D) x 2 + y 2 − 10ax + a 2 = 0.. P. from the straight line 2 x − y = 4 is minimum at the point (A) (− 1.0) . the remainder is (C) 9. c. (B) (− ∞. (B) a feasible solution.. (D) none of these. ∞ ) . (B) (1. P. The solution set of the inequality (A) (− ∞. x − 1 < 1 − x is (D) (− 1. b. 18. 1 1 (D)  . (b −1 3 + c3 ) . (C) (2. (c −1 3 + d3 ) −1 are in (D) none of these. (B) 6. 23. is divided by 36. then a 3 + b 3 (A) A. y = x 2 . The dual to the following linear program: maximise subject to . If a. 19..

(C) e − 1 2 −1 1  (C)   − 2 2  . (B) 1. (D) 2b + c > 0.         sin x  x 2 28. (C) 2b + c < 0. Given the two sequences a n = bn = 1 99 . (B)  2 − 2  . (D) 4. (B) 12.    1 . (C) 16. (B) 2. 99 (a n − bn )2 a n bn (C) (A) 1. 99 . If A =   2 − 2  . 100 1 − 1  100 5 27. 24. If a 2 x 2 + 2bx + c = 0 has one root greater than unity and the other less than unity. 1 and n . (D) none of these. (D) e − 1 6 . (B) a 2 + 2b + c > 0 . then (A) a 2 + 2b + c = 0. the sum. ∑n =1 n +1 (B) 1 − 1 .(A) 1. There are four letters and four directed envelopes. 25. lim   is x →0  x  (A) 0. (C) 3. (D) 64. The system of equations x+ y+z = 6 x + ay − z = 1 2 x + 2 y + bz = 12 7 . 29. The number of ways in which the letters can be put into the envelopes so that every letter is in a wrong envelope is (A) 9. is 26. then A + A is    0 0 1 − 1  (A)   0 0  . (D) none of these.

Simple model of income determination and Multiplier. Macroeconomics: National income accounting. If the consumer has smooth downward sloping and convex indiference curves. Aggregate demand and aggregate supply model. Choose the answer that you consider to be the most appropriate for a question and write it in you answer book. (i) A consumer consumes only two goods x and y. The price of good x in the local market is p and that in a distant market is q. (B) b ≠ 2 . (C) ab ≠ 2a + b + 2 . However. (D) ∞ 2 (ii) A consumer consumes only two goods x and y. then the (absolute) own – price 2 elasticity of good x is 1 (A) 0. (B) 1. Sample questions for ME II (Economics). Her budget constraint is px + y = 10 where p is 1 the price of good x. the consumer has to incur a fixed cost C. Suppose that the price of good y is unity in both markets. (D) 3. Market forms and Welfare economics.has a unique solution if and only if (A) a ≠ 1 . then 8 . IS – LM model. The number of times y = x 3 − 3 x + 3 intersects the x – axis is (A) 0. 1. Syllabus for ME II (Economics) Microeconomics: Theory of consumer behaviour. (C) 2. to go to the distant market. (C) 1. Instruction for question numbers 1 (i) – 1 (vi) For each of the following questions four alternative answers are provided. 2004 NO. 30. The consumer’s income is I and I > C . Theory of producer behaviour. y ) = x + y . If p = . (D) none of these. Money. where p > q . Banking and Inflation. (B) . Let x0 be the equilibrium consumption of good x. Her utility function is U ( x.

This necessarily implies that during this period (A) trade balance is positive. The cost function associated with this production function is (A) 2 awQ.  . 9 . (B) 4 brQ. never holds. (iii)  L K Consider the following production function Q = min  . (B) Y decreases. Suppose that the government raises t. (C) (wa + 2br )Q.(A) (B) (C) ( p − q ) x0 = C ( p − q ) x0 = C ( p − q ) x0 = C always holds. (D) change in foreign exchange reserve is positive. Then (A) Y increases. (iv) During a period net loan from abroad of an economy is positive. (C) current account surplus is negative. (C) Y remains unchanged.  2a 4b  Let w and r be the wage and rental rate respectively. (v) Consider a simple Keynesian economy in which the government expenditure (G) exactly equals its total tax revenue: G = tY where t is the tax rate and Y is the national income. (D) none of the above. may or may not hold depending on the consumer’s preferences. (D) none of the above. (B) net factor income from abroad is negative.

No. you can calculate its income elasticity. once you know all the price elasticities of demand for a commodity. (vi) Which one of the following statements is FALSE? Interest on pubic debt is not a part of (A) both personal income and national income. the price per gallon of gasoline divided by the price per barrel of crude oil is independent of crude oil production. 2 (instead of Re. (i) A barrel of crude oil yields a fixed number of gallons of gasoline. No. If. Therefore. ceteris paribus. (C) national income. (D) personal income. 1). (iii) If two agents for an Edgeworth box diagram have homothetic preferences then the contract curve is a straight line joining the two origins. The firms do not incur any fixed cost if they produce nothing.Q (where Q = q1 + q 2 ) . 2 Indicate whether the following statements are TRUE or FALSE. The cost function of firm 1 is (1 + 2q1 ) and that of firm 2 is (1 + 4q 2 ) . (ii) If there is no money illusion. what happens to the Cournot equilibrium? 10 . the fixed cost of firm 2 is Rs. Calculate the Cournot equilibrium output and profit of the two firms.(D) Y may increase or decrease. 3 Consider a duopoly situation where the inverse market demand adding a few lines to justify your answer in each case: function is P(Q) = 10. (B) government consumption expenditure.

However. Group 2 consumes only domestically produced goods. (i) (ii) Draw the budget line of the consumer. 400? No. 250 (that is. 100 to group 1. 5 A consumer consumes electricity ( X E ) and other goods ( X O ) . the average propensity to consume is 0. 11 . How does Y change? (iii) How does your answer to part (ii) change. However.8 for group 1 and 0. if the upper limit of imports is raised to Rs.No. To consume electricity the consumer has to pay a rental charge R and a per unit price p. their marginal propensity to import being 0. 600. If R = 0 and I = 1. However.5 for group 2. investment goods are produced domestically and Investment (I) is autonomously given at Rs. The income of group 1 (Y1 ) is fixed at Rs. p increases with the quantity of electricity consumed according to the function p = 1 XE. The price of other goods is unity. 2 The utility function of the consumer is U = X E + X O and his income is I > R. 800. (i) (ii) Compute gross domestic product (Y) Suppose group 2 makes an income transfer of Rs. import function ceases to be operative at this value). Both groups have proportional consumption function.4. imports are restricted and cannot exceed Rs. 4 A simple Keynesian model has two groups of income earners. group 1 consumes both domestically produced as well as imported goods. find the optimum consumption bundle.

y is the real GNP. y) = 12x + 16y –x2 – y2 where x ≥ 0 and y ≥ 0 .) < 1 (1) (2) (3) where s is the desired private saving. r is the interest rate and l is the desired real money holdings. together with the real government spending g and the tax – P The Laffer curve plots equilibrium tax collections on the vertical axis against t on the horizontal axis. (ii) Suppose t is imposed on all factor payments. 50 or more to spend on the two goods? No. instead of Rs. The price of good x is Rs.θ . What happens to the optimum commodity bundle if. 7 Consider an IS – LM model with the following elements: s = s ( y − t. The real money balance M . Does your answer to part (i) change? 12 rate t. t is the proportionate tax rate on labour earnings. r ). 4. (i) . 6 Find the maximum R that the electricity company can extract from the consumer. Reformulate equation (1) for this case. i is the desired real physical investment.) > 0. 25 to spend on two goods x and y. i = i (r ). the consumer has Rs.) < 0 l = l ( y. Show analytically whether or not that can happen here. A consumer has Rs. θ is the (exogenously given) labour’s share in GNP.) < 0 0 < s ′(. l1 (. y ).(iii) No. i ′(. l 2 (. that is. 3 and that of good y is Rs. 25. The continuously differentiable utility function of the consumer is U (x. on GNP. Laffer’s famous formula was that the curve slopes downwards. are exogenous.