31、According to the central limit theorem, a sampling distribution of the sample mean will be approximately normal only if the:

Select exactly 1 answer(s) from the following:

A. sample size n is large.

B. underlying distribution is normally distributed.

C. variance of the underlying distribution is known.

D. population mean of the underlying distribution is known.

32、Which of the following is NOT a desirable property of an estimator?

Select exactly 1 answer(s) from the following:

A. Efficiency.

B. Reliability.

C. Consistency.

D. Unbiasedness.

33、The nature of competitive environment to which the game of Prisoners' Dilemma applies and the solution offered by Nash equilibrium, respectively, are:

Select exactly 1 answer(s) from the following:

A. Answer A.

B. Answer B.

C. Answer C.

D. Answer D.

34、The tax division between buyers and sellers with respect to products with perfectly elastic and perfectly inelastic demand, respectively, are:

Select exactly 1 answer(s) from the following:

A. Answer A.

B. Answer B.

C. Answer C.

D. Answer D.

35、Venkat Reddy is very fond of mango fruits. If mangoes cost 10 rupees each, Reddy spends his budget on fruits that he values more highly than mangoes. However, at 4 rupees each Reddy buys 20 mangoes for devouring over a one-week period. The total consumer surplus in rupees for Venkat would be closest to:

Select exactly 1 answer(s) from the following:

A. 13.

B. 26.

C. 60.

D. 120.

31 Correct answer is A

“Sampling and Estimation,” Richard A. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 428-429
Study Session 2-10-d
interpret the central limit theorem and describe its importance
According to the central limit theorem, the sample mean of a population described by any probability distribution can be determined if the sample size n is sufficiently large, e.g., equal to or greater than 30. This process is used to estimate the population mean and standard deviation, which usually are unknown.

32 Correct answer is B

“Sampling and Estimation,” Richard A. Defusco, Dennis W. McLeavey, Jerald E. Pinto, and David E. Runkel
2008 Modular Level I, Vol. 1, pp. 432-433
Study Session 2-10-g
identify and describe the desirable properties of an estimator
The three desirable properties of an estimator are unbiasedness, efficiency, and consistency.

33 Correct answer is B

“Monopolistic Competition and Oligopoly,” Michael Parkin
2008 Modular Level I, Vol. 2, pp. 225-228
Study Session 5-20-a, d
describe the characteristics of monopolistic competition and oligopoly;
explain the kinked demand curve model and the dominant firm model, and describe oligopoly games including the Prisoners’ Dilemma
The game of Prisoners’ Dilemma applies to oligopoly and the solution from Nash equilibrium is that both prisoners would confess to the crime.

34 Correct answer is C

“Markets in Action,” Michael Parkin
2008 Modular Level I, Vol. 2, pp. 74-75
Study Session 4-15-c
explain the impact of taxes on supply, demand, and market equilibrium, and describe tax incidence and its relation to demand and supply elasticity
In the extreme cases of products with perfectly elastic and perfectly inelastic demand, the sellers and buyers, respectively, pay the entire tax.

35 Correct answer is C

“Efficiency and Equity,” Michael Parkin
2008 Modular Level I, Vol. 2, pp. 38-41
Study Session 4-14-b
distinguish between the price and the value of a product and explain the demand curve and consumer surplus
The consumer surplus is the value of the good minus the price paid for it (10-4) = 6, summed over the quantity bought. The total consumer surplus is the consumer surplus on each mango that Reddy buys and added together. It is the area of the right triangle = (base x height) / 2 as in Figure 3 on p. 40, with base equal to 20 mangoes a week and the height equal to 6, the consumer surplus on each mango. Thus the total consumer surplus = (20 x 6) / 2 = Rs.60 (see example on p. 41).

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