IIT JAM 2024 Economis Question Paper is available for download. The exam was successfully conducted by IIT Madras on February 11, 2024, from 3:00 PM to 6:00 PM. As per the students' initial reactions, the IIT JAM 2024 Economics paper was reported as easy to moderate in difficulty. The paper was comparatively lengthy, with a balanced distribution of questions across Microeconomics, Macroeconomics, Indian Economy, and Statistics.

IIT JAM 2024 Economics Question Paper with Answer Key PDF

Candidates can download the IIT JAM 2024 Economics Question Paper with Solution and Answer Key PDFs using the link below.

IIT JAM 2024 Economics Question Paper with Solutions

Question 1:

Which one of the following is a non-parametric test?

1. X²-test

2. t-test

100. F-testD

500. z-test

Question 2:

Let x and y be two consumption bundles, assumed to be non-negative and perfectly divisible. Further, the assumptions of completeness, transitivity, reflexivity, non-satiation, continuity, and strict convexity are satisfied. Then, which of the following statements is NOT CORRECT?

1. Either x ⪰ y or y ⪰ x or both

2. y > x if y contains more of at least one good and no less of any other

100. x is not indifferent to itself

500. For x (or y), its better set is strictly convex

Question 3:

Consider a production function of the form:

Y = a log L + (1 - a) log K, a ∈ (0, 1), a ≠ 0.5

where, Y is output, L is labour, and K is capital.

Then, the absolute value of elasticity of substitution is:

1. 1

2. a

100. 1 - a

500. ∞

Question 4:

Consider a closed economy with consumption function C = 2 + 0.5Y, where Y is income. The government expenditure is 3 and investment function is I = 4 - 0.5r, where r is interest rate. Then, the slope of the IS curve will be:

1. 1

2. -0.5

100. 1.5

500. -1

Question 5:

Which of the following was announced in the Union Budget 2023-24 to enhance the skills of lakhs of youth in the next 3 years?

1. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 1.0

2. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 2.0

100. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 3.0

500. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0

Question 6:

Suppose a random variable X follows an exponential distribution with mean 50. Then, the value of the conditional probability P(X > 70 | X > 60) is:

1. e^-7/5

2. e^-6/5

100. e^-1/5

500. e^-7/6

Question 7:

Which of the following measures was NOT initiated by the Government of India as a part of economic reforms in 1991?

1. Announcement of new industrial policy

2. Full convertibility of the rupee on the capital account

100. Removal of Quantitative Restrictions

500. Guidelines for investment by Foreign Institutional Investors (FIIs) in the capital market

Question 8:

Suppose nominal GDP equals 1,000 units and money supply equals 250 units. Based on the quantity theory of money, the velocity of money equals:

1. 40

2. 4

100. 2,50,000

500. 500

Question 9:

Let S₁ = {(x, y) ∈ ℝ² : x + y ≥ 1, x + y ≤ 2, y ≥ x², x, y ≥ 0} and S₂ = {(x, y) ∈ ℝ² : x + y ≥ 1, x + y ≤ 2, y ≤ x², x, y ≥ 0}. Then, which of the following is CORRECT?

1. Both S₁ and S₂ are convex sets

2. S₁ is a convex set but S₂ is not a convex set

100. S₂ is a convex set but S₁ is not a convex set

500. Neither S₁ nor S₂ are convex sets

Question 10:

lim_x→∞ (1 + 1/x)^x is equal to:

1. e

2. 1/e

100. 1

500. ∞

Question 11:

Two distinct integers are chosen randomly from 5 consecutive integers. If the random variable X represents the absolute difference between them, then the mean and variance of X are, respectively:

1. 1 and 3/2

2. 2 and 5

100. 1 and 3

500. 2 and 1

Question 12:

Consider two independent random variables: X ∼ N(5, 4) and Y ∼ N(3, 2). If 2X + 3Y ∼ N(μ, σ²), then the values of mean μ and variance σ² are:

1. μ = 19 and σ² = 34

2. μ = 8 and σ² = 14

100. μ = 19 and σ² = 14

500. μ = 8 and σ² = 34

Question 13:

The optimal value of the linear programming problem Maximise Z = 2x + 3y subject to 5x + 4y ≤ 20, 3x + 5y ≤ 15, 2x + y ≤ 4, x, y ≥ 0, is:

1. 4

2. 64/7

100. 9

500. 72/7

Question 14:

The solution of the differential equation xy dx - (x² + y²) dy = 0, y(0) = 1 is:

1. y = e^x/y

2. y² = e^x2/y2

100. y² = e^x/y

500. y = e^x2/y2

Question 15:

Which of the following is NOT CORRECT?

1. Permanent settlement was introduced by Lord Cornwallis in Bengal in 1793

2. The First War of Indian Independence occurred in 1857

100. Dadabhai Naoroji prepared the estimate of national income in 1860

500. In 1905, Swadeshi Movement was started in India

Question 16:

In a two-player game, player 1 can choose either M or N as strategies. Player 2 can choose either X, Y, or Z as strategies. The payoff matrix is as follows:

Which set of strategy profiles survives iterated elimination of strictly dominated strategies?

1. (N, Y)

2. (M, X)

100. (N, Z)

500. (M, Z)

Question 17:

For a profit maximizing monopolist, the ratio of the profit margin to price (also known as the Lerner Index or the relative mark-up) has a relationship with the price-elasticity of demand at the profit maximizing price. Then, which of the following statements is CORRECT?

1. The larger the elasticity of demand at the profit maximizing price, the greater is the relative mark-up

2. The power to sustain a price higher than the marginal cost depends only on the profit maximizing price

100. At the profit maximizing price, given costs are greater than zero, the price elasticity of demand is strictly larger than unity

500. At the revenue maximizing price, the price elasticity of demand is greater than unity

Question 18:

To study the effect of X₁ and X₂ on Y, the following regression model is estimated using a large sample:

Y = α + β₁X₁ + β₂X₂ + ε

The OLS estimates and standard errors are presented below:

1. α is statistically significant at 1% level, β₁ is statistically significant at 5% level, and β₂ is statistically significant at 10% level

2. α is statistically significant at 1% level, β₁ is statistically significant at 10% level, and β₂ is statistically significant at 5% level

100. α is statistically significant at 5% level, β₁ is statistically significant at 1% level, and β₂ is statistically significant at 10% level

500. α is statistically significant at 5% level, β₁ is statistically significant at 10% level, and β₂ is statistically significant at 5% level

Question 19:

Suppose high quality and low quality products are sold at the same price to the buyers. The buyers have less information to determine the quality of the product compared to the sellers at the time of purchase. Which of the following problems arises in this situation?

1. Moral hazard problem

2. Market signaling problem

100. Principal-agent problem

500. Adverse selection problem

Question 20:

Individuals who were either unemployed or out of labour force but had worked for at least 30 days over the reference year were included in the labour force by the NSSO in its labour force surveys. Under which one of the following classifications does the above procedure appear?

1. Usual Principal Status

2. Usual Principal and Subsidiary Status

100. Current Weekly Status

500. Current Daily Status

Question 21:

Let the production function be given by:

Y_t = A_tK_t^αH_t^βL_t^1-α-β

where, at time t, Y_t is output, A_t is level of Total Factor Productivity, K_t is physical capital, H_t is human capital, and L_t is labor. α = 1/5 and β = 2/5. If the growth rate of Y_t equals 10 percent, the growth rate of K_t equals 5 percent, the growth rate of H_t equals 5 percent, and the growth rate of L_t equals 10 percent, then the growth rate of A_t is:

1. 2 percent

2. 3 percent

100. 5 percent

500. 10 percent

Question 22:

Consider an economy where technology is characterised by the production function:

Y = 50K^0.4L^0.6

where, Y is output, K is capital, and L is labour. Assuming perfect competition in the product market and in the factor markets, the share of total income paid to labour is equal to:

1. 0.2

2. 0.3

100. 0.4

500. 0.6

Question 23:

In a two-player game, player 1 can choose either U or D as strategies. Player 2 can choose either L or R as strategies. Let c be a real number such that 0 < c < 1. If the payoff matrix is:

then the number of pure strategy Nash Equilibria in the game equals:

1. 1

2. 2

100. 3

500. 4

Question 24:

The Rangarajan Panel on 4th June 1993 submitted recommendations related to Balance of Payment (BoP). Which one of the following was NOT a part of the Panel's recommendations?

1. Efforts should be made to replace debt flows with equity flows

2. The ratio of debt linked to equity should be limited to 1:4

100. The minimum targets for foreign reserves should be fixed in such a way that the reserves are generally in a position to accommodate imports of 3 months

500. No sovereign guarantee should be extended to private sector

Question 25:

According to the “State of Inequality in India Report” from the Institute for Competitiveness, released on 18th May 2022, which of the following statements is CORRECT?

1. In India, the percentage of anaemic children under 5 years of age has decreased from 67.1 percent in 2015-16 to 58.6 percent in 2019-21

2. The female labour force participation rate in India has increased from 49.8 percent in 2017-18 to 53.5 percent in 2019-20

100. Using data from the Periodic Labour Force Survey (PLFS) 2019-20, the report shows that individuals with monthly salary of Rs. 25,000 are among the top 10 percent of total wage earners

500. By the end of 2019-20, 95 percent of all schools in India have functional toilets for girls

Question 26:

Consider the production function:

Q(K,L) = (2√K + 3√L)²

where Q is the output, K is capital, and L is labor. If η_K and η_L denote the output elasticities with respect to capital and labor, respectively, then the value of η_K + η_L is:

1. 2

500. 1

100. 4

500. 0.5

Question 27:

Consider a short-run Phillips curve with a constant expected rate of inflation. If the aggregate demand decreases unexpectedly and the labour force remains the same, then what will happen to aggregate price and unemployment rate?

1. Aggregate price rises and unemployment rate falls

2. Aggregate price falls and unemployment rate rises

100. Aggregate price rises and unemployment rate rises

500. Aggregate price falls and unemployment rate falls

Question 28:

Suppose the price elasticity of demand e_D is -1/5 and the price elasticity of supply e_S is 2/5. Then, the incidence of a specific (or unit) tax on the firms is equal to:

1. 1/3

2. 2/3

100. 1/2

500. 1/4

Question 29:

The differential equation satisfied by circles with radius 3 and center lying on the Y-axis is:

1. (dy/dx)² = x² / (9 + x²)

2. (dy/dx)² = (9 + y²) / y²

100. (dy/dx)² = x² / (9 - x²)

500. (dy/dx)² = (9 - y²) / y²

Question 30:

Suppose expected inflation rate (π_t^e) of an individual is formed as:

π_t^e = (1 - θ)π + θπ_t-1

where π is the constant inflation rate, π_t-1 is the previous year’s inflation rate, and 0 ≤ θ ≤ 1 is the weight assigned to inflation rate at different points in time. Then, which of the following is NOT CORRECT?

1. If θ = 0, then the individual assumes a constant inflation rate

2. If θ ≈ 1 and π < π_t-1, then the individual expects this year’s inflation rate to be similar to last year

100. The original Phillips curve is derived under the assumption of θ ≈ 1

500. A modified Phillips curve is derived under the assumption of θ = 1

Question 31:

In the case of a small open economy with fixed exchange rate regime and imperfect capital mobility, which of the following is/are CORRECT?

1. Fiscal contraction will lead to Balance of Payment deficit in the short-run if the slope of LM curve is greater than the slope of Balance of Payment curve

2. Fiscal contraction will lead to Balance of Payment deficit in the short-run if the slope of LM curve is less than the slope of Balance of Payment curve

100. Monetary expansion leads to Balance of Payment surplus in the short-run irrespective of the slopes of the LM curve and the Balance of Payment curve

500. Monetary expansion leads to Balance of Payment deficit in the short-run irrespective of the slopes of the LM curve and the Balance of Payment curve

Question 32:

Consider the following three utility functions:

F = (4x₁ + 2x₂), G = min(4x₁, 2x₂), and H = (√x₁ + x₂)

Where, x₁ and x₂ are two goods available at unit prices p_x1 and p_x2, respectively. Which of the following is/are CORRECT for the above utility functions?

1. The marginal rate of substitution is given by -1, -2, -0.5√x₁ for the utility functions F, G, and H, respectively

2. If p_x1 = p_x2, then the utility maximization problem with utility function F has a corner solution

100. If income is 100 and p_x1 = p_x2 = 2, then in the utility maximization problem with utility function G, the sum of the optimal values of x₁ and x₂ is 50

500. If income is 100, p_x1 = 5, and p_x2 = 5000, then in the utility maximization problem with the utility function H, the optimal value of x₂ is 20

Question 33:

The characteristics of pure public good is/are:

1. Rival in consumption

2. Excludable in consumption

100. Non-rival in consumption

500. Non-excludable in consumption

Question 34:

Consider a hypothetical economy where only apples and oranges are produced for three years:

Which of the following is/are CORRECT?

1. Real GDP in the year 2017 (base year = 2016) is Rs. 4,250

2. Real GDP in the year 2016 (base year = 2015) is Rs. 3,500

100. Nominal GDP in the year 2015 is Rs. 6,600

500. Price level, as measured by GDP deflator, increased in 2017 as compared to 2016 (base year = 2016)

Question 35:

Let a random variable X has mean μ_X and non-zero variance σ_X², and another random variable Y has mean μ_Y and non-zero variance σ_Y². If the correlation coefficient between X and Y is ρ, then which of the following is/are CORRECT?

1. |ρ| ≤ 1

2. The regression line of Y on X is y = μ_Y + (ρσ_X/σ_Y)(x - μ_X)

100. The variance of X - Y is σ_X² + σ_Y² - 2ρσ_Xσ_Y

500. ρ = 0 implies X and Y are independent random variables

Question 36:

Let X₁, X₂, ..., X_n be a random sample of size n > 1 drawn from a probability distribution having mean μ and non-zero variance σ². Then, which of the following is/are CORRECT?

1. The sample mean has standard deviation σ/√n

2. The probability distribution of ∑_i=1ⁿ(X_i - μ)/(σ√n) will tend to follow standard normal distribution as n → ∞

100. (n-1)S²/σ² will follow χ² distribution with (n-1) degrees of freedom, where S² is the sample variance

500. The sample mean is always a consistent estimator of μ

Question 37:

Let M = [α   1]
[-6   1] α ∈ R be a 2x2 matrix. If the eigenvalues of M are β and 4, then which of the following is/are CORRECT?

1. α + β = 1

2. An eigenvector corresponding to β is  [2,1]^T 

100. The rank of the matrix  M  is 2

500. The matrix M² + M  is invertibleCorrect Answer:

Question 38:

Let f : ℝ² → ℝ be a function defined as:

f(x, y) = { x²y / (x⁴ + y²) if (x, y) ≠ (0, 0), 0 if (x, y) = (0, 0) }

Then, which of the following is/are CORRECT?

1. lim_{(x, y) → (0, 0)}f(x, y) = 0

2. f_x(0, 0) = 0

100. f(x, y) is not continuous at (0, 0)

500. Both f_x and f_y do not exist at (0, 0)

Question 39:

Which of the following is/are NOT CORRECT?

1. Under the Reserve Bank of India Act, 1938, every scheduled bank has to keep certain minimum cash reserves with the RBI

2. CRR is the statutory reserve requirements to be kept by every scheduled bank with the RBI

100. A higher SLR increases the capacity of commercial banks to grant loans and advances

500. A high SLR can be considered as a tax on the banking system

Question 40:

According to the NITI Aayog’s “National Multidimensional Poverty Index: A Progress Review 2023”, which of the following statements is CORRECT?

1. The rural areas in India have experienced the fastest decline in the percentage of multidimensional poverty from 35.59 percent in 2015-16 to 21.28 percent in 2019-21

2. The incidence of poverty in urban areas in India increased from 5.27 percent in 2015-16 to 8.65 percent in 2019-21

100. A decline in India’s Multidimensional Poverty Index in 2019-21 is due to improvement in all the 12 indicators

500. At the national level, there is a decline in the intensity of poverty between 2015-16 and 2019-21

Question 41:

A firm has a production function that is homogeneous of degree one given by Q = 2√LK, where Q is quantity, L is labour and K is capital. The unit price of L is Rs. 4 and the unit price of K is Rs. 16. Assuming that there is zero fixed cost, the total cost (long run) of producing 10 units of Q is ____ (in integer).

Question 42:

Two students A and B are assigned to solve a problem separately. The (conditional) probability that A can solve the problem given that B cannot solve it, is 1/5. The (conditional) probability that B can solve the problem given that A can solve the problem is 3/5. The probability that A can solve the problem is 1/10. Then, the probability that B can solve the problem is ___ (rounded off to one decimal place).

Question 43:

Suppose the cash reserve ratio is 5 percent in a country. Assume that commercial banks keep zero excess reserve and the cash-to-deposit ratio is 5 percent. To increase the money supply by Rs. 10,500 crores, the central bank of the country should inject Rs. ____ crores (in integer).

Question 44:

Suppose an Indian company borrowed 300 dollars from a foreign bank at the beginning of the year and repaid it in dollars along with the agreed interest rate of 12 percent per annum. At the time of borrowing, the exchange rate was Rs. 70 per dollar. Assuming zero inflation rate in both the countries, the real cost of borrowing will be zero if the exchange rate is Rs. ____ per dollar at the time of repayment (rounded off to one decimal place).

Question 45:

There are 32 students in a class. Three courses namely English, Hindi, and Mathematics are offered to them. Each student must register for at least one course. If 16 students take English, 8 students take Hindi, 18 students take Mathematics, 4 students take both English and Hindi, 5 students take both Hindi and Mathematics, and 5 students take both English and Mathematics, then the number of students who take Mathematics only is ____ (in integer).

Question 46:

Let an inverse demand function for a commodity be p = e^-x/2, where x is the quantity and p is the price. Then, at p = 0.5, the consumer surplus is equal to ____.

Question 47:

The linear system of equations x + y = 3, x + (k² - 8)y = k, k ∈ ℝ has no solution for k = ____ (in integer).

Question 48:

A manufacturer producing pens has the following information regarding the cost of production of pens:

If the total cost function is of the form TC(Q) = aQ² + bQ + c where a, b, and c are constants, then the value of TC(Q) at Q = 4 is ____ (in integer).

Question 49:

Consider the information given in the table below:

The percentage change in working-age population from 2010 to 2020 is ____ (rounded off to two decimal places).

Question 50:

Consider the following information:

Consumption (C) = 250 + 0.25Y_d, where Y_d is disposable income

Autonomous Investment (I₀) = 100,

Government Expenditure (G₀) = 50,

Income tax rate (t) = 20%

The equilibrium level of consumption in the economy is ____ (in integer).

Question 51:

An individual owns a mobile phone, currently valued at Rs. 40,000. The current wealth of the individual is Rs. 2,00,000 (including the value of the mobile phone). According to reports, there is a 20 percent chance of mobile phone theft and an actuarially fair insurance policy is available to insure the loss of the mobile phone against a theft. The individual’s von-Neumann-Morgenstern utility of wealth function is given by U(W) = √W, where W is the wealth. Then, the maximum willingness to pay for such an actuarially fair insurance policy is Rs. ____ (rounded off to nearest integer).

Question 52:

Consider the following AK model where the production function is given by Y = AK where Y is output, K is capital, and A is a constant that reflects the level of technology. Suppose there is zero technological progress in the economy and A = 0.50. In the economy, the savings rate equals 0.60 and the depreciation rate for the capital stock equals 0.05. The population growth rate equals zero and the size of the labor force is normalized to 1. Based on the AK model, the steady-state growth rate of output per capita in the economy equals ____ percent (in integer).

Question 53:

A regression equation Y = -2.5 + 2X is estimated using the following data:

The coefficient of determination is ____ (rounded off to two decimal places).

Question 54:

A consumer’s utility function is given by u(x₁, x₂) = (2x₁ - 1)^0.25(x₂ - 4)^0.75 If the consumer has a budget of 73 and the unit prices of x₁ and x₂ are given by 2 and 1, respectively, then the value of x₁ + x₂ is ____ (rounded off to two decimal places).

Question 55:

An industry has 6 firms in Cournot competition. Each of the 6 firms has zero fixed costs, and a constant marginal cost equal to 20. The product is homogenous and the industry inverse demand function is given by P = 230 - Q, where P is the market price and Q is the industry output (sum of outputs of the 6 firms). The market price under Cournot-Nash equilibrium is equal to ____ (in integer).

Question 56:

Let the value of a random sample drawn from a normal distribution with mean 5 and unknown standard deviation σ be 4.8, 4.5, 5.1, 5.2, 5.3, 5.5. Then, the maximum likelihood estimate of σ² is ____.

Question 57:

An economy produces a consumption good and also has a research sector which produces new ideas. Time is discrete and indexed by t = 0, 1, 2, …. The production function for the consumption good is given by Y_t = A_tL_yt The production function for new ideas is given by A_t+1 - A_t = (1/250)A_tL_at The growth rate of the consumption good Y_t at t = 50 is ____ percent (in integer).

Question 58:

Consider a closed economy IS-LM model. The goods and the money market equations are respectively given as follows: Y = 90 + 0.8Y_d - 100i + G M_s = 750 + 0.2Y - 260i Where, Y is national income, Y_d is disposable income, T is total tax given by T = 5 + 0.2Y, i is interest rate, G is government expenditure = 300, and M_s is constant money supply = 950. The value of T at equilibrium Y is ____ (rounded to the nearest integer).

Question 59:

The supply curve is given as p = 10 + x + 0.1x² where p is the market price and x is the quantity of goods supplied. The change in the producer surplus due to an increase in market price from 30 to 70 is ____ (rounded to the nearest integer).

Question 60:

There are two goods X and Y and there are two consumers A and B in a pure exchange economy. A and B have Cobb-Douglas utility functions of the form U_A = 2X^0.4Y^0.6, U_B = X^0.3Y^0.7 Initially, A is endowed with 50 units of good X and 20 units of good Y. Similarly, B is endowed with 50 units of good X and 20 units of good Y. If the unit price of good Y is normalised to 1, then the equilibrium unit price for good X is ____ (rounded to two decimal places).