The Economics Society

Shri Ram College of Commerce

NATIONAL
ECONOMICS
OLYMPIAD

SAMPLE BOOKLET

2023
 NATIONAL
ECONOMICS
OLYMPIAD

CONTENTS
Pages

01 Section 1: Economic Concepts-Micro 1-10

02 Section 1: Economic Concepts- Macro 11-20

03 Section 2: Logic Reasoning 21-28

04 Section 3: Data Interpretation 29-36

05 Section 4: Case Studies 37-44

06 Sample Papers 45
 STRUCTURE OF OLYMPIAD

1. The Olympiad will be conducted in two separate rounds: the first one
being the Preliminary Round and the second one being the Final Round.
Please note that both the rounds will be conducted online and the
specific details in this regard will be shared a few days before the
Olympiad.

2. The main objective of conducting the Olympiad is to provide the

participants a holistic learning experience. Going beyond the rote learning
process, assessment will be based on application type questions an
practical scenarios. Thus, there is no fixed syllabus.
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3. The Preliminary Round will be conducted in Multiple Choice Questions
format. The generalEconomics
structure of the Preliminary Round will be as follows:
The paper will be divided into four sections, namely Economic
Olympiad
Concepts, Logical Reasoning, Case Studies and Data Interpretation.
There will be 40 questions in total with each section having 10
questions.

Participants will be provided with the maximum time of 60 minutes to

complete the Olympiad.
A selected set of top performers in the Preliminary Round will move on to
the Final Round.

4. The structure of the finals will attempt to identify those participants

which truly have the requisite skill and ability to use economics concepts
for solving problems of different types. It’ll be a challenge, more than an
examination. As such, the format of the Finals is specially curated and
remains unknown to any participant, before they actually come face to
face with it
SECTION 1: ECONOMIC CONCEPTS - Micro

Solved Questions
Question 1

Which of the following equations can correspond to a linear demand curve for a Giffen good?

1. P = 50-9Q
2. P = 2Q - 10 + 5P
3. P = -8Q+23+2P
4. P = 24 - 14Q

Answer: 3
Explanation:
The given equation P = -8Q+23+2P can be simplified as P = 8Q-23 or Q = P/8 + 23/8.

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Thus, as the value substituted for P increases, value of Q even increases. This satisfies the
property of a giffen good as an increase in price leads to an increase in quantity demanded,
resulting in an upward sloping demand curve.
Economics
Question 2 Olympiad
You are a rational consumer who consumes some units of Good X, now with the increase in
your income, you decrease the consumption of Good X. What does this tell you about Good X?

1. X is a giffen good, the income effect is more than the substitution effect
2. X is a normal good, the income effect is more than the substitution effect
3. X is an inferior good, the income effect is less than the substitution effect
4. X is a normal good, the income effect is less than the substitution effect

Answer: 1
Explanation:
Due to the substitution effect, a fall in the price of good X leads to an increase in its
quantity demanded and due to the income effect, an increase in the income of the
consumer leads to a fall in demand. As the net effect is the decrease in consumption, this
implies that the income effect is more than the substitution effect. As a net effect, a fall in
price leads to a fall in quantity demanded, thus good X is a giffen good.

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Question 3

Given the total cost TC = Q^3 - 10Q^2 + 60Q, what will be the minimum average cost? At what
level of output will the minimum cost occur? (Q is the level of output)

1. Minimum average cost is ACmin = 35 at Q = 5

2. Minimum average cost is ACmin = 175 at Q = 5
3. Minimum average cost is Amin = 170 at Q = 1
4. Minimum average cost is ACmin = 45 at Q = 1

Answer: 1
Explanation:
TC = Q^3 - 10Q^2 + 60Q
AC = TC/Q => AC = Q^3 - 10Q^2 + 60Q / Q => AC = Q^2 - 10Q + 60
To minimise AC, differentiate with respect to Q.
now, 2Q = 10 => Q = 5
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Substituting the value of Q, AC = 5^2 - 10(5) + 60 => AC = 35

Question 4
Economics
Olympiad
Which two of the following statements are correct?
1. In the short - run, ATFC = 0, therefore ATC = ATVC
2. If decrease in AFC < increase in AVC, then AC decreases
3. If decrease in AFC = increase in AVC, AC remains constant
4. If decreases in AFC > increase in AVC, then AC increases
Choose the correct answer from the options given below

1. a) and c)
2. b) and c)
3. b) and d)
4. a) and d)

Answer: 1
Explanation:
ATC = ATFC + ATVC. Therefore, if ATFC = 0, then ATC = ATVC
If decrease in AFC = increase in AVC, then AC = AFC + AVC remains constant.

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Question 5

Match the market forms in the list I and the role of the selling costs in the List II.

List I List II
Market Forms Role of selling costs

A Perfect Competition I. Sustained survival of firm

B Monopoly II. Influencing buying behaviour

C Monopolistic Competition III. Increasing market size

D Oligopoly IV. Intimation of product or size

Choose the answers from the options given below:

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1. A - I, B - III, C - IV, D - II
2. A - IV, B - II, C - I, D - III
Economics
3. A- III, B - IV, C - II, D - I
4. A- II, B - I, C - III, D - IV

Answer: 3
Olympiad
Explanation:
Perfect competition is a market with easy entry and exit, thus it is easier to increase the
market size. Monopoly involves a single seller, who is the price maker and thus known for
the intimation of a product or service. Monopolistic competition influences the buying
behaviour of the consumer. Oligopoly is a market shared by only a few firms and is thus
said to be highly concentrated and helps in the survival of the firm.

Question 6

Three firms operate under perfect competition, producing 900 units of the same
product but using different production technologies. Each company’s cost structure is
indicated in the table:

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National Economics Olympiad Economics Concepts

Company X Y Z

Total Variable Costs 2700 3600 4500

Total Fixed Costs 2700 1800 900

Total Costs 5400 5400 5400

Which of the following statements is most accurate? If the unit selling price is:

1. $6.00, all firms should exit the market in the long run.
2. $4.50, all firms should continue to operate in the short run, but exit the market in
the long run if these conditions are expected to persist.
3. $3.00, firm X should continue to operate in the short run, but firms Y and Z should
shut down production.
4. $2.75, no change needs to take place in the market.
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Answer: 3
Explanation: Economics
Firms continue to operate in the short run as long as the total variable costs are covered by

equal to the revenue, Olympiad

the revenue. The revenue for the three firms is 2700 (900*3). As the variable cost of X is
it continues to operate. However, Y and Z shut down as their total
variable cost exceeds the revenue.

Question 7

Assume that the consumer’s income and the number of sellers in the market for good X
both fall. Based on this information, assuming X is a normal good, we can conclude with
certainty that the equilibrium:

1. Price will decrease

2. Price will increase
3. Quantity will increase
4. Quantity will decrease

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Answer: 4
Explanation:
Fall in consumer’s income leads to a leftward shift in demand curve and a fall in the
number of sellers in the market leads to a leftward shift in supply curve. Thus, at the new
equlibrium level, the equlibrium quantity falls. The price might increase, decrease or
remaain constant, depending upon the magnitude of shift.

Question 8

If the opportunity cost of producing two goods is constant, then which of the
following statements are true-

1. The production possibilities curve is curved inward

2. The production possibilities curve is curved outward
3. The production possibilities curve is linear i.e. straight
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4. The production possibilities curve has an increasing slope.

Answer: 3
Explanation:
Economics
Olympiad
Constant opportunity cost of producing two goods leads to a constant marginal
opportunity cost. Thus, PPC will be a straight line due to a constant slope.

Question 9

X, Y, and Z are three goods. When the price of X rises, demand for Y falls. Similarly,
when the price of Y rises, demand for Z falls. What is the relationship between good X
and good Z?

1. Complementary Goods
2. Substitute Goods
3. Inferior Goods
4. Cannot be Determined

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Answer: 4
Explanation:
X and Y are complementary goods as an increase in the price of X leads to a decrease in
the demand for Y. Similarly, Y and Z are also complementary goods. However, no
relationship can be defined between the good X and good Z.

Question 10

Arrange the following products in the increasing order of price elasticities

(A) Homogeneous products
(B) Semi-Durable Consumer Goods
(C) Necessities
(D) Durable goods
Choose the correct answer from the options given below:

1. (C), (B), (D) and (A)

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2. (A), (B), (C) and (D)
3. (A), (C), (B) and (D)
4. (C). (A), (B) and (D)
Economics
Answer: 1
Explanation: Olympiad
Necessary goods have the least price elasticity as consumers will buy them regardless of
their income levels. Price elasticity of semi durables is more than necessities, but less than
durables as semi durables wear out before durables and thus, price plays a more important
role for the purchase of durable goods. Homogeneous products are considered to be
perfect substitutes and thus, price is one of the most important factor in the determination
of demand, thus they have the highest price elasticity.

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Unsolved Questions

Question 1
Relationship between slope and elasticity of supply is-

1. E = P/ Q * 1/ Slope
2. E = Q / P * Slope
3. E = Q / P * 1 / Slope
4. E = Slope

Answer: 1

Question 2

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If the tariff on an imported cars increases, then what are the possible effects
on consumer surplus, producer surplus and net welfare?

1. X Consumer Economics
Surplus increases, producer surplus increases, net welfare increases
2. Consumer Surplus decreases, producer surplus increases, net welfare increases
Olympiad
3. Consumer Surplus remains unchanged, producer surplus increases, net welfare decreases
4. Consumer Surplus decreases, producer surplus increases, net welfare decreases

Answer: 4

Question 3
In 2011, a massive Tsunami wrecked havoc in the coastal regions of Japan. A total of over 20,000
deaths had been reported, as a result of the disaster. What happened to the PPF of Japan?

1. Shifted to the Right

2. Shifted to the Left
3. India’s production point moved away from the PPF
4. India’s production point moved closer to the PPF

Answer: 2

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National Economics Olympiad Economics Concepts

Question 4
At producers equilibrium which of the following options is possible?
I) AR=8, MC=8
II) AR=13, MC=9
III) AR=8, MC=10
Options-
1. Only I
2. Both I and II
3. Both II and III
4. All of these

Answer: 2

Question 5
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Which of the following operates in long run?

Economics
1.Law of variable
2. Returns to scale
proportion

Olympiad
3. Both (a) and (b)
4. None of the above

Answer: 2

Question 6

AR = MR indicates which form of market?

1.Law of variable proportion

2. Returns to scale
3. Both (a) and (b)
4. None of the above

Answer: 1

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Question 7

X is a leading pharmaceutical company in India. After years of research and development, it

came up with a medicine that ensures 100% effectiveness against all types of cancers. The
company charges Rs. 50,00,000 for a course of medicine. In such a situation what options does
the government have?

1. Price Ceiling
2. Price Floor
3. Subsidies to company X
4. Both (a) and (c)

Answer: 1

Question 8
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If a perfectly competitive firm is operating where the price is greater than Average Variable
Economics
Cost but less than Average Costs, what should the firm do?

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1. Immediately shut down
2. Continue operations in the short run even though there’s an economic loss
3. Continue operations only in the short run and shut down in the long run
4. Shut down until price is equal to or greater than average costs.

Answer: 2

Question 9

Which of the following statements is incorrect?

1.On a linear demand curve, all the five forms of elasticity can be depicted.
2. If two demand curves are linear and intersect each other, then the coefficient of elasticity would be
the same on different demand curves at the point of intersection.
3. If two demand curves are linear and parallel to each other then at a particular price the
coefficient of elasticity would be different on different demand curves.
4. The price elasticity of demand is expressed in terms of relative not absolute changes in price and
quantity demanded.

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National Economics Olympiad Economics Concepts

Answer: 2

Question 10

The supply and demand functions for toffees are described by the following equations:
QS= 450+17p
QD= 690-43p

To aid the distressed toffee producers, the government imposes a price floor, fixing the price of
toffees at ₹6 per toffee. The excess supply will be purchased by the government. The expenditure by
the government on procuring

1. 542
2. 680

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3. 815
4. 720

Answer: 4 Economics
Olympiad

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SECTION 1: ECONOMIC CONCEPTS - Macro

Solved Questions
Question 1

Which Model of circular flow of Income and Expenditure is correct for this formula:
Savings + Taxes = Investments + Government Expenditure

1. Two-Sector Model
2. Three-Sector Model
3. Four-Sector Model
4. None

Answer: 2
Explanation:
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The circular flow of income in a three-sector economy includes households, firms, and the
government sector. The government of a country acts as both a firm and a consumer. As a firm
Economics
or producer, the government produces goods and services for the economy.

Question 2
Olympiad
Some details about Company Y’s performance in the year 2019-2020 are given below:
I) Raw Materials Purchased - Rs. 15,00,000
II) Opening Stock of Raw Materials - Rs. 1,00,000
III) Closing Stock of Raw Materials - Rs. 80,000
IV) Total Revenue - 35,00,000
V) Opening Stock of Finished Goods (at market price) - 1,80,000
VI) Closing Stock of Finished Goods (at market price) - 2,50,000
VII) Opening Balance of Investments in Stocks - Rs. 10,00,000
VIII) Closing Balance of Investments in Stocks - Rs. 13,00,000
What is the contribution to GDP by Company Y?

1.Rs. 23,50,000
2.Rs. 20,50,000
3.Rs. 22,80,000
4.Rs. 19,10,000

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Answer: 2
Explanation:
Cost of Intermediate Consumption = (Raw Materials Purchased + Opening Stock of Raw
Materials - Closing Stock of Raw Materials) + (Opening Stock of Finished Goods - Closing Stock
of Finished Goods)
Cost of Intermediate Consumption = (15,00,000 + 1,00,000 - 80,000) + (1,80,000 - 2,50,000)
Cost of Intermediate Consumption = (15,20,000) + (-70,000) = 14,50,000
Contribution to GDP = Total Revenue - Cost of Intermediate Consumption Contribution to GDP
= 35,00,000 - 14,50,000 Contribution to GDP = Rs. 20,50,000

Question 3

The goods and services produced by Country A citizens who are working in the Country B are
most likely included in the:

1. GDP of the Country A and GNP of the Country B

2. GNP of the Country A and GDP of the Country B

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3. GNP of the Country A and GNP of the Country B
4. GDP of the Country A and GDP of the Country B

Answer: 2 Economics
Explanation:
Olympiad
The Gross National Product (GNP) of Country A includes the income earned by its citizens both
domestically and abroad. So, the income earned by Country A citizens working in Country B
would be included in the GNP of Country A.
The Gross Domestic Product (GDP) of Country B includes all the economic activity that occurs
within the borders of Country B, including the production of goods and services by both its own
citizens and foreign workers within its borders. Therefore, the goods and services produced by
Country A citizens working in Country B would be included in the GDP of Country B.

Question 4

Find the Net National Product at Factor Cost from the given information (in lakhs):

i) Durable use producer goods with a life span of 10 years =10

ii) Semi-Durable use producer goods with a life span of 3 years=6
iii) CGST paid = 0.5
iv) SGST paid =0.5

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v) Single-use Producer goods = 5

vi) Revenue=20
vii)Unsold output during the year = 2
viii) Foreign Remittance Received =2

1. 14
2. 15
3. 16
4. 17

Answer: 2
Explanation:
NNP at FC
= Revenue + Unsold output - single use producer goods - depreciation - taxes+ foreign remittance
recieved

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= 20+2-5- (10/10)- (6/3)- (0.5+0.5) + 2
= 15
Taxes are calculated as a sum of CGST and SGST,
Economics
Depreciation= Total value/ life span

Olympiad
Question 5

Assertion (A): Interest paid by the government on public debt is not included in the Interest
Income.
Reason (R): Interest paid on loans taken for consumption purposes is not included as factor
income.

(1) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct
explanation of Assertion (A).
(2) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct
explanation of Assertion (A).
(3) Assertion (A) is True but Reason (R) is False.
(4) Assertion (A) is False but Reason (R) is True.

Answer: 1
Explanation: Interest paid by the government on public debt is not included in the Interest
Income. This is true. Interest paid by the government on public debt is not considered as part of
an individual's interest income when calculating personal income.

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National Economics Olympiad Economics Concepts

Question 6

You are the president of TomatoLand. Due to an attack from the United States of Cabbage,
there has been a situation of hyperinflation in your state. In this situation, what kind of budget
should you maintain?

1. Balanced Budget
2. Deficit Budget
3. Capital Budget
4. Surplus Budget

Answer: 4
Explanation:
During hyperinflation, the value of a nation's currency rapidly decreases, and prices skyrocket.
To mitigate the negative effects of hyperinflation and stabilize the economy, governments often
implement strict fiscal policies, including running a surplus budget.

Question 9
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Economics
Olympiad
Assertion: The purchase of machinery from the rest of the world is an economic
transaction of the capital account of BoP.
Reason: Any transaction that impacts the assets or liabilities of a country is recorded on
the capital account of BoP.

1. Both Assertion and Reason are true and the Reason is the correct explanation of the Assertion.
2. Both Assertion and Reason are true but the Reason is not the correct explanation of the
Assertion.
3. Assertion is true, Reason is false
4. Assertion is false, Reason is true

Answer: 4
Explanation:
Purchase of machinery is treated as current account transaction under trade of goods and services.

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Question 8

Providing free LPG connections to the families below poverty line fulfils ______ objective
of the government budget.

1. Economic Stability
2. Reallocation of resources
3. Reduction in income inequality
4. Infrastructural Development

Answer: 3
Explanation:
This initiative aims to reduce income inequality by providing access to clean cooking fuel to
households that are economically disadvantaged. By addressing the energy needs of low-income
families, the government contributes to reducing income inequality and improving the well-being
of marginalized sections of society.

Question 7
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Economics
Assertion: The Central Bank as a banker to the government, works as a custodian of cash reserves.
Reason: The central bank acts as a clearing house for the transfer and settlement of mutual claims of
commercial banks.
Olympiad
1. Both Assertion and Reason are true and the Reason is the correct explanation of the
Assertion.
2. Both Assertion and Reason are true but the Reason is not the correct explanation of the
Assertion.
3. Assertion is true, Reason is false
4. Assertion is false, Reason is true

Answer: 4
Explanation: While both the assertion and reason are true, the reason does not directly explain why
the central bank acts as a custodian of cash reserves for the government. These are two separate
functions of central banks. Therefore, option 2 is the correct choice.

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National Economics Olympiad Economics Concepts

Question 10

Answer: 1
Explanation:
Firms produce goods and services using the factor services offered by households. Households
buy goods and services produced by firms and recieve factor payments for services offered.

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Economics
Olympiad

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National Economics Olympiad Economics Concepts

Unsolved Questions
Question 1

Deflationary gap exists when Potential GDP is:

1. Equal to Real GDP

2. Less than Real GDP
3. Greater than Real GDP
4. None of the above

Answer: 3

Question 2

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A new technology that reduces the health hazards for workers engaged in construction
sector and thus, reduces the incidence of illness in them will most likely decrease:

1. Demand-pull Economics
inflation
2. Cost-push inflation

4. Demand-pushOlympiad
3. Cost-pull inflation
inflation

Answer: 2

Question 3

Which of the following enjoys higher standard of living as a result of Globalisation?

1. Big producers
2. Small producers
3. Poor consumers
4. Well-off consumers

Answer: 3

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Question 4

In the case of India, we have unemployment in rural as well as urban areas. Consider the
following statements in this regard.

1. Sometimes, people will remain unemployed even during the peak of farming season and
this is called seasonal unemployment.
2. In case of disguised unemployment, people appear to be unemployed and is a form of
pseudo unemployment.
3. Educated unemployment is a common phenomenon in urban areas owing to the high
levels of education.

Select the incorrect option-

1. Only 3
2. 1 and 2
3. Only 1
4. 2 and 3

Answer: 2 National
Question 5 Economics
Olympiad
Which of the following is true for credit money?

1. Money value < Commodity value

2. Money value = Commodity value
3. Money value > Commodity value
4. Money value <= Commodity value

Answer: 3

Question 6

From the given options, bring out the one which is not a function/power of Reserve Bank of
India-

1. To assume the responsibility of meeting (directly or indirectly) all reasonable

demands for accommodation

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National Economics Olympiad Economics Concepts

2. To hold cash reserves of the commercial banks and make available financial
accommodation to them
3. To enjoy monopoly over the issuing of notes
4. To assume the responsibility of statistical analysis of data related to the macro economy
of India

Answer: 4

Question 7

Which of the following is true for credit money?

1. Depreciation of Currency
2. Appreciation of Currency
3. No change
4. Either A or B

Answer: 2 National
Question 8
Economics
Olympiad
The Law of Psychological Consumption states that -

1. Consumption does not change in the same direction as income

2. Consumption changes in the same direction as investment
5. Consumption changes in the opposite direction as income
4. Consumption changes in the same direction as income but MPC remains less than
unity

Answer: 4

Question 9

In the case of India, we have unemployment in rural as well as urban areas. Consider the
following statements in this regard.

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National Economics Olympiad Economics Concepts

1. Sometimes, people will remain unemployed even during the peak of farming season and
this is called seasonal unemployment.
2. In case of disguised unemployment, people appear to be unemployed and is a form of
pseudo unemployment.
3. Educated unemployment is a common phenomenon in urban areas owing to the high
levels of Education.

Select the incorrect option-

1. Only 3
2. 1 and 2
3. Only 1
4. 2 and 3

Answer: 2

Question 10

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Suppose the total population of a country is 200 million. The labour force is 100 million. If
10 million people are discouraged workers that means those workers who are not currently

Economics
looking for work, but if given would take up the job. Out of the labour force, 80 million
are employed full time and 10 million are employed part time. What is the current
unemployment rate?

1. 10%
Olympiad
2. 50%
3. 90%
4. 80%

Answer: 1

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SECTION 2: LOGICAL REASONING

Solved Questions
Question 1
In the given diagram, the circle stands for educated, square for hard-working, triangle for urban
and the rectangle for honest people. Different regions in the diagram are numbered from 1 to
12. Study the diagram carefully to choose the correct answer.

People who are educated, hard-working and honest but not urban are represented by
1. 2
2. 8
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3. 9
4. 13 Economics
Answer: 2 Olympiad
Question 2
In the given diagram, the circle stands for educated, square for hard-working, triangle for
urban and the rectangle for honest people. Different regions in the diagram are numbered
from 1 to 12. Study the diagram carefully to choose the correct answer.

Hard-working people who are uneducated, dishonest and urban are represented by
1. 3
2. 4
3. 8
4. 9

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SECTION 1: LOGICAL REASONING
National Economics Olympiad Economics Concepts

Answer: 1

Question 3

In the following series, the number of letters skipped in between the adjacent letters are in ascending
order, i.e., 1, 2, 3, 4. Which one of the following letter groups does not obey this rule?

1. CEHLQ
2. DFIMR
3. GILPU
4. HJMPTR

Answer: 2

Question 4
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If the last four letters of the word CONCENTRATION are written in reverse order followed by next
Economics
two in the reverse order and next three in the reverse order and then followed by the first four in the
reverse order, counting from the left, which letter would be eighth in the new arrangement?

1. N Olympiad
2. T
3. E
4. R

Answer: 2

Question 5

If A + C = D + E, B + 2C = D + 2E, C - E > E - B and 2C > A + D, then

1. D > B>C>A>E
2. A>B>C> D>E
3. D > C > A> E> B
4. C> B > E>D > A

Answer: 4

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National Economics Olympiad Economics Concepts
SECTION 1: LOGICAL REASONING
Question 6

First bunch of bananas has ½ as many bananas as a second bunch. If the second bunch has 3
bananas less than the first bunch, then the number of bananas in the first bunch is

1. 9
2. 10
3. 12
4. 15

Answer: 4

Question 7

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A monkey climbs 30 feet at the beginning of each hour and rests for a while when he slips back 20
feet before he again starts climbing in the beginning of the next hour. If he begins his ascent at
8.00 a.m., at what time will he first touch a flag at 120 feet from the ground?

1. 4 p.m.
Economics
Olympiad
2. 5 p.m.
3. 6 p.m.
4. None of these

Answer: 3

Question 8
Aman is 16th from the left end in a row of boys and Vivek is 18th from the right end. Gagan
is 11th from Aman towards the right and 3rd from Vivek towards the right end. How many
boys are there in the row?

1. 40
2. 42
3. 48
4. None of these

Answer: 3

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SECTION 1: LOGICAL REASONING

Question 9

A child is looking for his father. He went 90 metres in the east before turning to his right. He
went 20 metres before turning to his right again to look for his father at his uncle's place 30
metres from this point. His father was not there. From there, he went 100 metres to his north
before meeting his father in a street. How far did the son go to meet his father from the starting
point?

1. 80 metres
2. 100 metres
3. 140 metres
4. 260 metres

Answer: 3

Question 10
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Economics
Rita told Mani, "The girl I met yesterday at the beach was the youngest daughter of the brother-in-
law of my friend's mother." How is the girl related to Rita's friend?

1. Cousin
2. Daughter
Olympiad
3. Niece
4. Friend

Answer: 3

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Unsolved Questions
Question 1

a_bc_a_bcda_ccd_bcd_

1. abddbd
2. acbdbb
3. adbbad
4. adbcad

Answer: 3

Question 2

National
Q2 Find the odd one out

1. LAHMQW
2. HUTMCX
3. CLOVIK
Economics
4. IXMILBC
Olympiad
Answer: 3

Question 3

Find the odd one out

1. JOEHNP
2. LZKMSU
3. GWOURV
4. SFXPMG

Answer: 4

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National Economics Olympiad Economics Concepts

Question 4

Q4 If ZIP = 198 and ZAP = 246, then how will you code VIP?

1. 174
2. 222
3. 888
4. 990

Answer: 2

Question 5

If MASTER is coded as 411259, then POWDER will be coded as

1. 765439 National
2. 765430
3. 765459
4. 765549
Economics
Answer: 3 Olympiad

Question 6

According to a certain code,

'min fin bin gin' means trains are always late;
'gin din cin hin' means 'drivers were always punished;
'bin cin vin rin' means 'drivers stopped all trains'
'din kin fin vin' means 'all passengers were late
Then, 'Drivers were late' would be written as

1. min cin din

2. fin cin din
3. fin din gin
4. gin hin min

Answer: 2

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National Economics Olympiad Economics Concepts

Question 7

In a certain coding system, 'rbm std bro pus' means the cat is beautiful, 'inh pus dim std' means
'the dog is brown', 'pus dim bro pus cus' means the dog has the cat. What is the code for 'has'?

1. std
2. dim
3. bro
4. cus

Answer: 3

Question 8

Six persons A, B, C, D, E and F were playing a game of cards. A's father, mother and uncle
were in the group.

National
There were two women. B, the mother of A, got more points than her husband. D got more
points than E but less than F. Niece of E got lowest points. Father of A got more points than F

Economics
but could not win the game. Who won the game?

1. A
2. B
3. D
Olympiad
4. F

Answer: 2

Question 9

(i) A, B, C, D, E and F are six members in a family in which there are two married couples.
D is brother of F. Both D and F are lighter than B.
B is mother of D and lighter than E.
C, a lady, is neither the heaviest nor the lightest in the family.
E is lighter than C.
The grandfather in the family is the heaviest.
How is E related to F?

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National Economics Olympiad Economics Concepts

1. Grandmother
2. Brother
3. Father
4. Data inadequate

Answer: 3

Question 10

One morning after sunrise, Vikram and Shailesh were standing in a lawn with their backs
towards each other. Vikram's shadow fell exactly towards left hand side. Which direction was
Shailesh facing?
1. East
2. West
3. North
4. South

Answer: 4 National
Economics
Olympiad

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SECTION 3: DATA INTERPRETATION

Solved Questions
Question 1

National
Economics
1. What percentage do Hyundai Cars make of the total vehicles as presented in the original
graph?

1. 5.29
Olympiad
2. 12.68%
3. 14.29%
4. 7.34%

Answer: 3

Question 2
2. The ratio of the number of scooters and Honda cars is?

1. 1:6
2. 4:1
3. 6:1
4. 4:23

Answer: 3

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National Economics Olympiad Economics Concepts

Question 3
Which of the following does not move the trade situation in the opposite direction in 2017-
18?
1. Unilateral Transfers to X - $0.13 billion, Unilateral Transfers from X -
$0.09billion
2. FPI in X - $1.1billion, FPI from X - $1.6billion
3. FII in X - $0.8billion, FII from X - $0.5billion
4. None of the above

Answer: 2
Explanation- In order to move in the opposite direction inflows should be higher than
outflows. Only option B meets the requirements.

Question 4
Cities with their Monthly Profit
Months
National
Lucknow Mumbai Delhi Chandigarh Chennai

January
Economics
Rs. 45000 Rs. 33000 Rs. 23400 Rs. 65000 Rs. 13000

February Rs. 34500 Rs. 43000 Rs. 34560 Rs. 64500 Rs. 28000

March Olympiad
Rs. 33000 Rs. 56500 Rs. 43200 Rs. 12340 Rs. 66000

April Rs. 50000 Rs. 12000 Rs. 17000 Rs. 19000 Rs. 22000

May Rs. 65000 Rs. 45000 Rs. 34000 Rs. 23500 Rs. 45400

In 2016-17, Country X had a positive current account balance. Which of the following
statements are true?
1. Country X may or may not have positive net unilateral transfers
2. Country X has positive net unilateral transfers
3. Country X has positive net income from abroad
4. Both B and C

Answer: 1
Explanation- Unilateral Transfers and Net Income from Abroad are two components of
Current Account Balance. In 2016-17, country X has a BOT deficit. But a positive current
account balance does not necessarily require both unilateral transfers and net income
from abroad to be positive.

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National Economics Olympiad Economics Concepts

Following table shows data related to the matches of the Annual Football
Tournament. Matches were played round robin (each team played against another only
once) and three teams participated in total - X, Y and Z. However, due to data
mishandling, organisers lost some of the important data.

Question 5
What was the total number of matches played in the tournament?

1. 6
2. 4
3. 3
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4. None of the above

Answer: 1
Economics
Question 6
Olympiad
How many goals did Team Z score per match played (average goals scored)?
1. 4
2. 6
3. 3
4. None of the above

Answer: 1

Question 7
The following chart shows the GDP growth in 2019 from the previous year of five
different countries named- P, Q, R, S and T. What is the difference between GDP growth
rates of the two countries with the least GDP among the five countries?
1. 30
2. 40
3. 10
4. Cannot be determined

Answer: 4

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National Economics Olympiad Economics Concepts

Question 8
How many goals did Team Z score per match played (average goals scored)?
1. 4
2. 6
3. 3
4. None of the above

Answer: 1

National
Economics
Olympiad

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National Economics Olympiad Data Interpretation
SECTION 4: DATA INTERPRETATION
Unsolved Questions

Solve questions 1 to 3 using following case study

The given chart depicts the composition of Country A, B, C, D and E’s

budgetary expenditure.

National
Economics
Olympiad

Question 1

One of the advisors of Country A suggested that the government should

increase expenditure on the defence sector due to increasing hostility with
neighbouring countries. He also suggested that expenditure on infrastructural
development should be reduced to finance the defence expenditure. This is an
example of--

1. Opportunity Cost
2. Sunk Cost
3. Implicit Cost
4. None of the above

Answer: 1

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National Economics Olympiad Data Interpretation

Question 2

Assuming that resources in different countries are equally efficient, total

expenditure in all countries is equal and all productive activity in the economy is
proportional to government expenditure, which country has the highest GDP?
1. Country A
2. Country B
3. Country C
4. Country D

Answer: 4

Question 3
National
Economics
If the government of Country X wants to increase its expenditure on education
without compromising expenditure on any other sector, what alternatives does it
have?
Olympiad
1. Borrow from other Countries
2. Borrow from the World Bank
3. Print new currency
4. All of the Above

Answer: 4

Solve questions 1 to 5 using following data

Understand the data given below to answer the following questions

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National Economics Olympiad Data Interpretation

Question 1

National
If the number of people in each city is assumed to be equal, calculate the cumulative ratio
of males and females.

1. 6:5 Economics
2. 5:6
3. 7:8
4. 8:7
Olympiad

Answer: 1

Question 2

Calculate the ratio of urban males and urban females in city B

1. 21:15
2. 5:21
3. 3:5
4. 7:3

Answer: 3

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National Economics Olympiad Data Interpretation

Unsolved Questions

Question 3

If you are provided with the following information —-> Population in city C is 250 and in
city E is 320 then calculate the ratio of the number of females in both the cities.

1. 2:7
2. 5:9
3. 27:14
4. 9:5

Answer: 2

Question 4
National
You are required to calculate the ratio of rural women in both cities (C and E).

Economics
1.3:2
2. 2:3
3. 3:1
4. 1:3
Olympiad
Answer: 1

Question 5

Calculate the number of urban females in City D, provided the number of urban males is
150.
1. 90
2. 110
3. 100
4. 120

Answer: 1

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SECTION 4: CASE STUDIES

Solved Questions
Solve questions 1 to 5 using following case study

Around noon on a recent morning, Anil Pradhan found himself attending to his stall in a
once-bustling vegetable market on the outskirts of India's capital, New Delhi. He was
contemplating whether it was time to close up for the day, as he hadn't made a single sale
for hours. Anil Pradhan, a 55-year-old vendor, managed to keep his small business afloat
despite the challenges posed by Prime Minister Narendra Modi's decision to ban high-
denomination currency notes in 2016 and the introduction of the goods and services tax
(GST) in the following year. However, neither he nor his fellow traders are experiencing
any significant prosperity.
Pradhan shared, "Since demonetization, our business has taken a severe hit, to the point
where many vendors in the market have had to shutter their shops. Nowadays, this market
hardly sees any customer activity after 11 am. After running this small business successfully

National
for the past 35 years, I might have to close it down as well."

Question 1
Economics
At what point will Anil Pradhan Shut his shop?
1. When TR=MC
2. When MR>MC
Olympiad
3. When MR<MC
4. When TR>MC

Answer: 3
Explanation:
When MR<MC, the additional revenue generated by selling one more unit is less than the
additional cost incurred by producing that unit. This means that the business is losing
money by selling each additional unit. In this case, the business will shut down to minimize
its losses.

Question 2
Taking into consideration that Vegetable vending is an informal sector activity, how would
Anil Pradhan’s own budget line have shifted since demonetization?
1. The budget set has been contracted
2. Budget Set has expanded
3. Rotation of the budget line outwards on the x-axis
4. Rotation of the Budget line inwards on the Y-axix

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National Economics Olympiad Case Studies

Answer: 1
Explanation:
Demonetization had a negative impact on the informal sector, as many people in this
sector do not have access to formal banking services. As a result, many people in the
informal sector lost their savings and were unable to conduct their businesses.

Question 3
Assume that Anil’s Business is under the purview of taxes. How will the imposition of GST impact
his supply curve?
1. Supply Curve Shifts Rightward
2. Supply Curve Shifts Leftward
3. Upward Movement Along the Supply Curve
4. Downward Movement Along the Supply Curve

Answer: 2
Explanation:

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The imposition of GST will increase his cost of production. This is because he will have to
pay GST on the inputs that he uses to produce and distribute his vegetables. As a result,
Anil will be willing to supply a smaller quantity of vegetables at any given price. This will
Economics
shift his supply curve to the left.

Question 4 Olympiad
What was the percentage of the Economic slowdown recorded as a result of Demonetization?
1. 15%
2. 1.2%
3. 1.5%
4. 13%

Answer: 3

Question 5
Anil wants to ensure that he markets his shop well. For that reason, he puts up banners and posters
and people started noticing his banner. Which of the following do you think will be the correct
statement out of the following-

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National Economics Olympiad Case Studies

1. His supply falls as he has wasted money on advertisements

2. His supply increases since he is able to get a loan from a bank as his shop has
become famous
3. His sales have increased as more people get to know about him
4. his competitor’s profit increases as they mistake his shop for others.

Answer: 3
Explanation:
Marketing is used to create awareness about a product or service and to convince potential
customers to buy it. When Anil puts up banners and posters, more people will become
aware of his shop and its products. This will lead to an increase in demand for his
products, which in turn will lead to an increase in sales.

Solve questions 6 to 10 using following case study

A person deposits ₹ 10,000 in his bank account, which is immediately

transferred to Y. If the bank is required to keep a combined CRR and SLR of 40%,

Question 6
National
Economics
What can be said about the money multiplied by the bank?
1. ₹ 0
2. ₹ 4,000
3. ₹ 25,000
Olympiad
4. Cannot be determined

Answer: 3
Explanation:
Money Multiplier = 1/(CRR+SLR) = 1/40% = 2.5
Money Multiplied = Money Multiplier × Initial Deposits = 2.5 × ₹ 10,000 = ₹ 25,000

Question 7
At what CRR and SLR respectively would the Money Multiplier be 4?
1. 12.5% each
2. 2% and 2%
3. 0.5% and 1.5%
4. 3% and 1%

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National Economics Olympiad Case Studies

Answer: 1
Explanation:
Multiplier = 1/LRR i.e., 4 = 1/LRR
∴ LRR = 0.25 i.e., 25%
LRR = CRR + SLR
Only Option 1 satisfies this condition
∴ CRR = 12.5% and SLR = 12.5%

Question 8
What kind of policy marks an increase in the Reserve Ratio?
1. Contractionary Fiscal Policy
2. Expansionary Fiscal Policy
3. Contractionary Monetary Policy
4. Expansionary Monetary Policy

Answer: 3
Explanation:
National
Contractionary monetary policy is a policy used by central banks to reduce the money

Economics
supply that could mean an increase in the Reserve Ratio

Question 9
Olympiad
What does an increase in the reserve ratio entail?
1. Increased lending capacity of banks
2. Decreased lending capacity of banks
3. Increased purchasing power of citizens
4. Higher stimulus Packages for the Public

Answer: 2
Explanation:
The reserve ratio is the percentage of deposits that banks are required to keep with the
central bank. When the reserve ratio is increased, banks have less money to lend to
businesses and consumers. This reduces the money supply

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National Economics Olympiad Case Studies

Question 10
Which of the following is not a Central Bank?
1. Federal Reserve
2. Bank of America
3. Reserve Bank of India
4. Bank of England

Answer: 2
Explanation:
Bank of America is a Commercial Bank

National
Economics
Olympiad

41
National Economics Olympiad Economic Applications

Unsolved Questions
Solve questions 1 to 3 using following case study

The proposed Regional Comprehensive Economic Partnership (RCEP) is gigantic in size

and scope. It aims to create a free trade zone of 10 ASEAN nations and Australia, China,
India, Japan, South Korea and New Zealand. This means a zero-customs duty zone in
geography that contributes 34% of global gross domestic product (GDP) and 40% of
world trade. The region is also home to almost half of the world’s population. Currently,
many pharmaceutical companies have to obtain elaborate licenses to export their goods to
China. The government hopes to change this. However, many analysts believe that there
would be little for India to gain from this agreement. Many industries like steel are also
worried that cheap imports from China would harm their business, as the cost of
producing steel in India is higher than that in China.

Question 1

National
What would happen if the Government of India created a Special Economic Zone (SEZ)
for steel manufacturers in Manesar? (Where SEZ is a designated area in which the business
laws are more relaxed to encourage trade and manufacturing activities.)
Economics
1. Maruti Suzuki's manufacturing plant will increase its import of steel

3. Cannot say Olympiad

2. Maruti Suzuki's manufacturing plant will decrease its import of steel

4. None of the above

Answer: 2

Question 2

What would happen if INR becomes weaker/depreciates with respect to Yuan?

(Depreciation implies a fall in the value of the Indian Rupee in comparison with Yuan. For
example, when earlier 10 rupees made a yuan, after depreciation, we need 15 rupees to
make a yuan)

1. Exports of steel to China would increase

2. Exports of steel to China would decrease
3. Imports of steel from China would decrease
4. Both A & C

Answer: 4

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National Economics Olympiad Economic Applications

Question 3

An Intellectual Property case has been put forth by Japan in order to protect its
pharmaceutical industry, which of the following is likely to happen after the RCEP
Agreement is struck:

1. India’s exports of medicines will rise.

2. India’s exports of medicines will fall.
3. India's export of medicines may or may not change.
4. None of the above

Answer: 1

Solve questions 4 to 6 using following case study

In franchising, a franchisor licenses its know-how, procedures, intellectual property, use of

its business model, brand, and the rights to sell its branded products and services to a

National
franchisee. When we talk about companies using this business model the name of Subway
comes at the forefront. With 42,000 stores, Subway is the largest franchise owner on the
planet, one of the primary reasons for this being that it's cheaper to own a Subway
Economics
franchise than any other fast food chain. In the financial crisis of 2008 when the entire
USA faced a recession Subway witnessed a 17% growth because of its 5$ footlong. But this

Olympiad
5$ footlong became a problem for the company in the long run. But in recent years the
company has witnessed a slowdown in growth and a 25% decline in its business. One of the
major reasons for this is the lack of innovation in the menu in recent years as compared to
other chains. Also, Subway has no restrictions on where one can open a franchise because
of which we find about 10 Subways in a 15-minute walk in Manhattan.

Question 4

Why have more franchises become a bad thing for Subway?

1. The franchises are competing with each other, and there has been a saturation
2. Because they are selling the franchise agreements at a very low price
3. Because of a decline in the quality of individual franchise
4. Subway incurs a lot of costs in opening a new franchise

Answer: 1

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National Economics Olympiad Economic Applications

Question 5

Why do you think the 5$ footlong became a problem for Subway in the long run?
1. Customers got bored of the product
2. Other fast-food chains provided cheaper alternatives
3. Due to inflation profit margins declined over time
4. Demand for the product fell because of a recession.

Answer: 3

Question 6

What should Subway do to avoid the impending slowdown in the company?

1. Reduce the number of franchises

2. Increase the number of franchises to increase revenue and thus profits
3. Increase the one-time fee and royalty on new franchises

National
4. Enter a new market to increase sales.

Economics
Answer: 1

Olympiad

44
SAMPLE PAPERS OF THE NATIONAL
ECONOMICS OLYMPIAD

PRACTICE SETS

National
PRACTICE SET 1 PRACTICE SET 2
Economics
Olympiad
PREVIOUS YEAR PAPERS

PRELIMS CLASS 11 PRELIMS CLASS 12

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