Section-Wise Strategy: NAT vs MSQ in IIT JAM Economics

Tips

Explanation

Conceptual Clarity First

• NAT questions test your calculation and understanding rather than guessing.
• Focus on microeconomics (elasticity, cost functions), macroeconomics (national income, inflation, growth models), and quantitative methods (regression, statistics, matrices).

Practice Calculations

• Solve past IIT JAM NAT questions to get familiar with types of answers expected.
• Memorize formulae for elasticity, growth rates, marginal productivity, demand-supply equilibrium.

Units & Precision

• Always write answers in the units asked (e.g., %, Rs, index points).
• Avoid rounding too early; use final answer rounding rules from the JAM guidelines.

Stepwise Approach

• Read the question carefully → Identify the formula → Substitute values → Simplify → Double-check.
• For multi-step calculations, write intermediate results clearly.

Check Units & Sign

• If your answer is negative, check whether it makes sense in context (e.g., negative demand might indicate a mistake).
• Always confirm units: thousands, millions, percentages, rates, etc.

Time Management Tips

• NAT questions require more calculation time than MCQs.
• Average time: 2–3 minutes per NAT question.
• Allocate initial 20–25 mins for easier NATs, then tackle tougher ones.

Tips

Explanation

Conceptual Accuracy

• MSQs test depth of understanding.
• Topics like market structures, game theory, welfare economics, macroeconomic policies often appear.

Use Elimination Strategically

• If an option definitely violates a principle, eliminate it.
• If two options are mutually exclusive, usually only one is correct.
• Don’t guess blindly—select only those you are confident about.

Cross-Check with Theory

• Often the question stems or numerical clues hint at the correct options.
• Always connect back to definitions and key principles.

Time Management

• Do not spend too long on one MSQ (usually 2-3 mins max).
• Answer all MCQs first, then MSQs with more thought.
• MSQs often have higher marks per question but require careful checking.

Aspect

NAT

MSQ

Marks per question

1–2

2

Difficulty

Moderate to High (requires calculations)

Moderate to High (conceptual depth)

Guessing

Not possible

Risky; avoid if unsure

Preparation Focus

Formulas, calculations, past numerical problems

Theory, definitions, multiple correct options

Time Strategy

Solve after MSQs unless easy

Solve first, use elimination & certainty check

Common Topics

Quantitative methods, micro/macro calculations, stats, matrices

Micro theory, welfare economics, public finance, macro policy, game theory

Areas

Topics

Important Topics

Microeconomics

Consumer Theory

• Utility maximization, budget constraints
• Revealed preference theory
• Indifference curve properties

Producer Theory

• Cost functions, production functions
• Profit maximization conditions

Market Structures

• Perfect competition, monopoly, monopolistic competition, oligopoly
• Price determination, equilibrium conditions

Game Theory & Strategic Behavior

• Nash equilibrium
• Dominant strategies
• Prisoner’s dilemma-type problems

Welfare Economics

• Pareto efficiency
• Social welfare functions
• Edgeworth box analysis

Market Failures & Public Goods

• Externalities
• Public goods and free-rider problem

Macroeconomics

National Income Accounting

• GDP, GNP, NNP, NI, PI, DPI
• Circular flow of income (two- and three-sector models)

Consumption & Investment

• Keynesian consumption function
• Investment determinants
• Multiplier and accelerator concepts

Money and Banking

• Money supply definitions (M1, M2, M3)
• Money demand (Keynesian, LM curve)
• Central bank functions, monetary policy tools

IS-LM & AD-AS Models

• Equilibrium in goods & money markets
• Shifts in curves and policy effects

Inflation & Unemployment

• Phillips curve (short- and long-run)
• Okun’s law

Open Economy Macroeconomics

• Balance of payments
• Exchange rate regimes
• Mundell-Fleming model (basic applications)

Economic Growth & Development

Growth Models

• Solow model, Harrod-Domar
• Steady state, savings and capital accumulation

Development Indicators

• HDI, Gini coefficient
• Poverty and inequality measures

Structural Transformation

• Agriculture vs industry vs services
• Demographic transition

Statistics & Econometrics

Probability & Distributions

• Normal, binomial, Poisson distributions
• Properties of expectations and variance

Estimation & Hypothesis Testing

• OLS assumptions
• Confidence intervals, t-test, F-test, Chi-square test

Time Series & Index Numbers

• Trend, seasonal components
• Consumer Price Index (CPI), Wholesale Price Index (WPI)

Correlation & Regression

• Multiple regression
• Multicollinearity, heteroscedasticity (basic understanding)

Optimization

• Lagrange multipliers
• Constrained optimization

Area

Topics

Important Topics

Microeconomics

Consumer Theory

• Utility maximization (Cobb-Douglas, CES, perfect substitutes/complements)
• Budget constraints
• Marshallian and Hicksian demand
• Price and income effects (Slutsky equation)

Production & Costs

• Production functions (Cobb-Douglas, CES)
• Returns to scale
• Cost functions (short-run & long-run)
• Marginal cost, average cost calculations

Market Equilibrium

• Perfect competition (equilibrium price, output)
• Monopoly pricing, profit maximization
• Cournot and Bertrand models (sometimes simplified numeric versions)

Macroeconomics

National Income Accounting

• GDP, GNP, NNP, NI calculations
• Savings, investment, government budget

Key Macroeconomic Models

• IS-LM model (equilibrium interest rate & output)
• AD-AS model (equilibrium price & output)
• Multiplier effects

Money & Inflation

• Money supply, velocity of money
• Inflation rate calculations (CPI, GDP deflator)
• Quantity theory of money

Economic Growth & Development

• Solow growth model (capital accumulation, steady-state output)
• Harrod-Domar model (growth rate, savings rate)
• Population growth effects

Statistics & Econometrics

Descriptive Statistics

• Mean, median, mode, variance, standard deviation
• Covariance and correlation coefficients

Probability

• Probability distributions (binomial, normal, Poisson)
• Expected value, variance of random variables

Regression Analysis

• OLS regression calculations (simple linear)
• R², slope, and intercept derivation
• Forecasting using regression equation

Index Numbers

Price and quantity indices (Laspeyres, Paasche, Fisher)

Mathematical Economics

Calculus

• Partial derivatives, total derivatives
• Optimization with constraints (Lagrange method)

Linear Algebra

• Matrices (determinants, inverses)
• Systems of equations

Differential Equations

Growth models, cobweb model