IAI Righs Reserved) @ ) SRI LANKA INSTITUTE OF DEVELOPMENT ADMINISTRATION rst Efficiency Bar Examinatton for Officers in the Sri Lanka Administrative Servies 1010 (March/April) (05) Economics Thnee hours j Answer five (05) questions only. All questions carry equal marks 01. Distinguish between the following pairs of concepts (20 marks) (@—_Beonomies and diseconomies, Gi) Inderal economies and external economies (iil) Production economies and marketing economies Giv)__Dimminishing returns and returns to scale 02) Whatis meant by capital formation? (06 marks) (i) Whavis the differince between stock and flow? (06 marks) (Gi) In which category (stockiflow) will you place the following and why? a) Value added b) Net foreign assets ©) Net factor income from abroad. (08 marks) 03, (i) What is excess demand? (06 marks) Gi) How can the situation of excess demand be dealt with? (06 marks) (Gi) What are the possible effects of price ceiling and rationing? (05 marks) 04, What are the major toots of fiscal policy? How can it be used for controlling inflation and eliminating. the current account deficit of a country? (06 marks) (i) What are the main tools of monetary policy? How can it be used for increasing employment? (06 marks) (ii) Indicate whether each of the following individuals would prefer the depreciation of the Sri Lanka Rupee and why ? a. A foreign tours in Sei Lanka b. A Sti Lankan consumer importing a car An exporter of tea in Sri Lanka 4. A businessman importing essential consumer gools to Sti Lanka (05 mars)06. 07 08, (i) Deline opportunity cost! How do you measure the opportunity cost of a person who comes to public office to obtain a service? (08 marks) Git) Explain the empirical applications of the production possibility fronticr (06 marks) Ge) What isthe practical use Of consumer surplus? (06 mars) (@_“Aevording to the theory of comparative advantage, all economies inthe world are interdependent”. Discuss 20 marks) (Bo you propose a freely floating exchange rate for developing county like Sti Lanka? Give teasons for your answer, (10 marks) Examine reasons forthe reduction ofthe relative contribution of the agricultural sector to GDP during tke economic liberalization in Sri Lanka (20 marks) {What factors do you attribute to the changes in the urban —rural migration patter in Sri Lanka duting the last three decades? (20 marks) puoi abo (05) ‘oon on