Correct option is C
Correct ans. (c)
Explanation: The correct matching is as follows:
(A) Top beneficiary from Foreign exchange trading → (III) London: London is recognized as the world’s leading center for foreign exchange trading. The presence of major forex markets, high liquidity, and global time zone advantages make London a top beneficiary in this field.
(B) Competitive equilibrium is Pareto efficient → (IV) First theorem of welfare economics: The First Theorem of Welfare Economics states that under certain conditions, every competitive equilibrium is Pareto efficient, meaning no one can be made better off without making someone else worse off. This is a foundational principle in microeconomic theory.
(C) Walras → (II) General equilibrium analysis: Léon Walras developed the concept of general equilibrium theory, which seeks to explain how supply and demand interact in multiple markets simultaneously. He introduced mathematical models to capture interdependencies in an entire economy.
(D) Game Theory → (I) John Von Neuman and Oscar Morgenstern: These two scholars co-authored "Theory of Games and Economic Behavior" in 1944, laying the foundation of modern game theory. This theory models strategic interactions among rational agents and has widespread application in economics, politics, and evolutionary biology.
Information Booster
London handles nearly 40% of global FX transactions, making it the world's forex hub.
The First Welfare Theorem highlights the efficiency of market mechanisms under perfect competition.
Walras's model introduced the auctioneer concept to achieve equilibrium across all markets.
Game theory helps understand strategic behavior in oligopoly, bargaining, auctions, etc.
The First Welfare Theorem assumes perfect information and absence of externalities.
Walrasian equilibrium forms the backbone of modern microeconomic theory.
Game theory models include Nash Equilibrium, dominant strategies, and mixed strategies.
English
10 Questions
20 Marks
12 Mins
