100+ Free IIT JAM Economics Practice Questions

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Quantitative easing (QE) by a central bank typically involves:

Increasing the cash reserve ratio

Selling foreign currency reserves

Large-scale purchase of long-term assets to inject liquidity

Raising the policy interest rate

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Key Facts: IIT JAM Economics Exam

60 questions / 100 marks

30 MCQ + 10 MSQ + 20 NAT in 3 hours

JAM 2026 brochure (jam2026.iitb.ac.in)

15 February 2026

JAM 2026 exam date

IIT Bombay JAM 2026 schedule

JAM 2021

First year Economics paper (EN) was offered

JAM organizing committee

INR 2,100

Application fee (one paper, JAM 2025 reference)

JAM Information Brochure

100

Free practice questions here

OpenExamPrep

IIT JAM Economics (EN) is a 3-hour CBT with 60 questions (30 MCQ + 10 MSQ + 20 NAT) totalling 100 marks. Negative marking on MCQ only. JAM 2026 organized by IIT Bombay on 15 February 2026; entry to MA Economics at IIT Roorkee, IIT Madras, and CFTIs.

Sample IIT JAM Economics Practice Questions

Try these sample questions to test your IIT JAM Economics exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1A consumer with utility function U(x, y) = xy faces prices px = 2 and py = 4 with income M = 80. What is the optimal consumption of x?

A.10

B.20

C.15

D.40

Explanation: For Cobb-Douglas U = xy with equal exponents, the consumer spends half of income on each good. So px·x = M/2 = 40, giving x = 40/2 = 20. Equivalently, MRS = y/x = px/py = 1/2, so y = x/2; substituting into 2x + 4y = 80 gives 2x + 2x = 80, x = 20.

2In the Solow growth model with constant population and no technology growth, the economy converges to a steady state where:

A.Capital per worker grows at the savings rate

B.Output per worker grows at the rate of depreciation

C.Investment per worker equals depreciation per worker

D.Consumption per worker equals zero

Explanation: In the Solow steady state without population or technology growth, the capital stock per worker is constant: sf(k*) = δk*. That is, gross investment per worker exactly replaces depreciated capital, so k* and y* stop changing.

3If P(A) = 0.4, P(B) = 0.5, and P(A ∩ B) = 0.2, what is P(A | B)?

A.0.4

B.0.5

C.0.8

D.0.1

Explanation: By the definition of conditional probability, P(A | B) = P(A ∩ B) / P(B) = 0.2 / 0.5 = 0.4. Note this equals P(A), so events A and B are independent here.

4Which legislation replaced the British-era Indian Penal Code (IPC) in India effective 1 July 2024?

A.Bharatiya Nyaya Sanhita (BNS)

B.Bharatiya Nagarik Suraksha Sanhita (BNSS)

C.Bharatiya Sakshya Adhiniyam (BSA)

D.Indian Evidence Act

Explanation: The Bharatiya Nyaya Sanhita, 2023 replaced the IPC of 1860 with effect from 1 July 2024 as part of India's overhaul of its colonial-era criminal laws.

5If f(x) = x³ − 3x² + 2, the value of x at which f has a local minimum is:

A.0

B.1

C.2

D.3

Explanation: f'(x) = 3x² − 6x = 3x(x − 2). Setting f'(x) = 0 gives x = 0 or x = 2. f''(x) = 6x − 6: at x = 0, f'' = −6 < 0 (max); at x = 2, f'' = 6 > 0 (min). So the local minimum is at x = 2.

6The Slutsky decomposition of a price change splits the total effect on demand into:

A.Income effect and wealth effect

B.Substitution effect and income effect

C.Real and nominal effects

D.Direct and cross-price effects

Explanation: The Slutsky equation decomposes the total response of demand to a price change into a substitution effect (movement along an indifference curve to the new relative price) and an income effect (shift due to the change in real purchasing power).

7A firm has production function Q = L^0.5 K^0.5. If both L and K are doubled, output:

A.Doubles

B.More than doubles

C.Less than doubles

D.Stays the same

Explanation: Sum of exponents = 0.5 + 0.5 = 1, so the function exhibits constant returns to scale (CRS). Doubling all inputs exactly doubles output: (2L)^0.5(2K)^0.5 = 2·L^0.5 K^0.5 = 2Q.

8In a Cournot duopoly with identical firms, linear inverse demand P = 100 − Q and zero marginal cost, what is each firm's equilibrium output?

A.25

B.33.33

C.50

D.20

Explanation: Each firm's reaction function: qi = (100 − qj)/2. Symmetric equilibrium qi = qj = q* gives q* = (100 − q*)/2, so 3q* = 100, q* = 33.33. Industry output = 66.67.

9A Nash equilibrium in a strategic game is a profile of strategies where:

A.All players choose dominant strategies

B.No player can profitably deviate given others' strategies

C.The sum of payoffs is maximized

D.Each player minimizes the opponent's payoff

Explanation: Nash equilibrium is a profile where each player's strategy is a best response to the others'. Given that everyone else holds their strategy fixed, no single player can improve their payoff by unilaterally deviating.

10Public goods are characterized by which two properties?

A.Excludability and rivalry

B.Non-excludability and non-rivalry

C.Excludability and non-rivalry

D.Non-excludability and rivalry

Explanation: A pure public good is non-excludable (cannot prevent non-payers from consuming) and non-rivalrous (one person's consumption does not reduce availability for others). Examples include national defense and clean air. These features lead to free-rider problems and underprovision by private markets.

About the IIT JAM Economics Exam

IIT JAM (Joint Admission Test for Masters) Economics paper (code EN) is a national-level entrance test for admission to MA/MSc Economics programs at participating IITs — primarily IIT Roorkee (MA Development Economics), IIT Madras (MA Development Studies), and certain centrally-funded technical institutes. The EN paper was introduced in JAM 2021, making JAM 2026 (organized by IIT Bombay on 15 February 2026) only its sixth edition. The Computer-Based Test contains 60 questions: 30 single-correct MCQs (1 or 2 marks each), 10 multiple-select MSQs (2 marks each, all correct options must be selected for marks), and 20 Numerical Answer Type (NAT) questions (1 or 2 marks each). Total 100 marks over 3 hours. Negative marking applies only to MCQ: −1/3 for 1-mark MCQs and −2/3 for 2-mark MCQs; MSQ and NAT carry no negative marking.

Questions

100 scored questions

Time Limit

180 minutes (3 hours)

Passing Score

No fixed pass; admission via merit rank to MA/MSc Economics at participating IITs and CFTIs

Exam Fee

INR 2,100 (one paper, JAM 2025 reference; confirm 2026 fee on jam2026.iitb.ac.in) (Indian Institute of Technology Bombay (JAM 2026 organizing institute, on behalf of IITs and IISc))

IIT JAM Economics Exam Content Outline

~22%

Microeconomics

Consumer theory (utility, demand, budget constraint, indifference curves, Slutsky decomposition); production and cost (production functions, returns to scale, isoquants, cost minimization, short and long run costs); general equilibrium and welfare (Pareto efficiency, two-consumer two-good model, Edgeworth box); market structure (perfect competition, monopoly, monopolistic competition, oligopoly — Cournot, Bertrand, Stackelberg); game theory (Nash equilibrium, dominant strategies, mixed strategies, repeated games); public goods and market failure (externalities, public goods, Coase theorem, asymmetric information)

~22%

Macroeconomics

National income accounting (GDP, GNP, NNP, methods of measurement); behavioural and technological functions (consumption, investment, money demand, production function); closed-economy business cycles and IS-LM (IS-LM model, fiscal and monetary policy); open-economy Mundell-Fleming (IS-LM-BP, fixed and flexible exchange rates); inflation and unemployment (Phillips curve, expectations, NAIRU); growth models (Solow, Harrod-Domar, endogenous growth)

~15%

Statistics for Economics

Probability theory (sample space, axioms, conditional probability, Bayes' theorem, random variables, distributions); mathematical statistics (sampling, estimation, confidence intervals); hypothesis testing (type I/II errors, t/F/chi-square tests); correlation and regression (simple OLS, multiple regression, properties of estimators)

~20%

Indian Economy

Pre-1950 (colonial economy, deindustrialization, agriculture); planning (Five-Year Plans, public sector, mixed economy); post-1991 reforms (liberalization, privatization, globalization); banking, finance and macro policy (RBI, monetary policy, fiscal policy, FRBM); social inequalities (caste, class, gender); poverty (measurement, programs); labour market (informal sector, MGNREGA)

~21%

Mathematics for Economics

Preliminaries and functions (sets, functions, sequences, limits); differential calculus (derivatives, partial derivatives, total derivatives, elasticity); integral calculus (definite and indefinite integrals); differential and difference equations (first-order, second-order); linear algebra (matrices, determinants, eigenvalues, systems of equations); optimization (unconstrained, constrained, Lagrangian, Kuhn-Tucker)

How to Pass the IIT JAM Economics Exam

What You Need to Know

Passing score: No fixed pass; admission via merit rank to MA/MSc Economics at participating IITs and CFTIs
Exam length: 100 questions
Time limit: 180 minutes (3 hours)
Exam fee: INR 2,100 (one paper, JAM 2025 reference; confirm 2026 fee on jam2026.iitb.ac.in)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

IIT JAM Economics Study Tips from Top Performers

1Solve all previous JAM Economics papers (2021-2025) — only five exist, so cover each twice; they are the single most reliable indicator of question style and difficulty

2Use Mankiw/Dornbusch for Macro and Varian (Intermediate Microeconomics) or Pindyck-Rubinfeld for Micro at the undergraduate-honours level expected by JAM

3Master NAT questions: practice numerical answer entry under exam conditions; small calculation errors lose full marks because there are no options to bail you out

4For Indian Economy, follow the latest Economic Survey and budget speech for current numbers (FRBM targets, fiscal deficit, GST collection, latest growth)

5Sharpen Mathematics for Economics with Chiang & Wainwright or Sydsaeter & Hammond — focus on Lagrangian/Kuhn-Tucker, eigenvalues, and difference equations

6Take 8-10 full-length mock papers in the last month and use elimination smartly — MSQs reward only complete answers, so skip MSQs where you are unsure of even one option

Frequently Asked Questions

What is the IIT JAM Economics (EN) exam pattern in 2026?

JAM EN is a 3-hour Computer-Based Test with 60 questions totalling 100 marks. The paper has three sections: 30 single-correct MCQs (1 or 2 marks each), 10 Multiple-Select Questions (MSQ, 2 marks each — all correct options must be picked for credit), and 20 Numerical Answer Type (NAT) questions (1 or 2 marks each). JAM 2026 will be held on 15 February 2026 in two sessions.

What is the marking scheme and negative marking for IIT JAM EN?

Negative marking applies to MCQ only: −1/3 mark for each incorrect 1-mark MCQ and −2/3 mark for each incorrect 2-mark MCQ. MSQ and NAT have no negative marking. For MSQ, you must select ALL correct options to receive any marks — no partial credit. NAT answers are entered using a virtual numeric keypad and matched against a tolerance range set by examiners.

Which institutes accept the IIT JAM Economics score?

JAM Economics is used primarily for admission to MA Development Economics at IIT Roorkee, MA Development Studies at IIT Madras (Department of Humanities and Social Sciences), and selected MA/MSc Economics programs at centrally-funded technical institutes (CFTIs) and NITs. Always check the latest list in the JAM Information Brochure at jam2026.iitb.ac.in, since participating institutes may change.

What is the application fee for IIT JAM 2026?

For JAM 2025 the fee was INR 2,100 for one test paper (single category) and INR 2,900 for two papers, applicable to all categories. Female and SC/ST/PwD candidates pay the same single-paper fee structure. IIT Bombay will publish JAM 2026 fees on jam2026.iitb.ac.in; expect a small increase. Payment is via online banking/UPI/cards during the registration window (typically September-October).

When was JAM Economics introduced and how does it compare with the older science papers?

JAM Economics (EN) was introduced in JAM 2021, making JAM 2026 only its sixth edition. Unlike the long-established science papers (Physics, Chemistry, Mathematics, Biotechnology, Geology, Mathematical Statistics) which date back to 2004-05, the Economics syllabus is still relatively new and stable. Previous-year papers (2021-2025) are the most authoritative resource for understanding pattern and difficulty.

Who is eligible to appear for IIT JAM Economics?

Candidates must hold (or be in the final year of) a Bachelor's degree from a recognized university. No specific subject combination is mandated for JAM EN — economics graduates, engineering graduates with strong quantitative skills, and statistics/mathematics undergraduates frequently appear. There is no upper age limit. International candidates can also apply.

How important is Mathematics for the JAM Economics paper?

Mathematics for Economics is one of the five syllabus sections and typically accounts for around 20% of marks. Strong calculus (partial derivatives, optimization), linear algebra (matrices, eigenvalues), and elementary differential and difference equations are essential. Additionally, the Microeconomics and Macroeconomics sections require quantitative manipulation, so weak math is a common cause of low scores.