Correct : C. Not only limited but are capable of alternative uses
4. Which one of the following is an example of an economic good
Correct : C. Petrol
5. ----- is not an example of free good
Correct : A. Sunlight
6. The term production refers to:
Correct : D. All of the above
7. The problem of allocation of resources is concerned with:
Correct : A. What to produce
8. The distribution of national product among the members of the society
is the problem of:
Correct : C. For whom to produce
9. Production is said to be efficient when:
Correct : A. The re-allocation of resources cannot increase the production of the article even by one unit
10. Which one of the following come under macro economics:
Correct : A. Per capita income
11. Which one of the following is not come under macro economics
Correct : D. Individual income
12. Partial equilibrium analysis come under:
Correct : A. Micro economics
13. “The starting point of all economic activity is the existence of human wants” Who said this?
Correct : B. Selligman
14. Production and consumption takes place simultaneously in the case of
Correct : B. Services
15. Economics is a social science because
Correct : D. All of the above
16. Economic growth can be achieved through
Correct : C. Both A & B
17. Micro economics doesn’t deal with:
Correct : D. General equilibrium analysis
18. Name the economist who analyses the subject matter of economics into
two branches: micro economic analysis and macro economic analysis.
Correct : C. Ragner Frisc
19. Transformation of inputs into outputs is known as
Correct : A. Production
20. ----- is an example of secondary input
Correct : D. Raw material
21. Odd-man out from the following
Correct : C. Education
22. The choice of techniques of production is related to the problem of
Correct : B. How to produce
23. The functional relationship between inputs and outputs is called
Correct : A. Production function
24. Firms owned by one individual is known as
Correct : A. Proprietorship
25. Firms owned by two or more individuals is known as
Correct : B. Partnership
26. Firms owned by stock holders are known as
Correct : C. Corporations
27. The major objective of a firm is
Correct : A. Profit maximization
28. Which one of the following is an example of fixed input
Correct : C. Plant and equipments
29. In short-run
Correct : C. Some inputs are fixed and some are variable
30. In long-run
Correct : B. All inputs are variable
31. Marginal product of a factor is
Correct : D. All of the above
32. Production function expresses
Correct : D. All of the above
33. The variable cost of a firm vary in direct proportion to the
Correct : A. Volume of its output
34. Law of variable proportions is concerned with
Correct : C. Short-run production function
35. The ‘point of inflection’ come in which stage of the law of variable proportions
Correct : A. Stage I
36. A rational producer will select his level of production in which stage of
the law of variable proportions
Correct : B. Stage II
37. Total product reaches at maximum when
Correct : C. MP = 0
38. At the ‘point of inflection’
Correct : A. MP is maximum
39. Returns to scale refers to the production function where
Correct : C. All factors are variable
40. In the case of diminishing returns to scale, a given proportionate
increase in all factors causes
Correct : C. A less than proportionate increase in output
41. Increasing returns to scale occurs due to
Correct : D. All of the above
42. The cause for diminishing returns to scale is:
Correct : D. All of the above
43. The solution to diminishing returns to scale is :
Correct : D. All of the above
44. Economies of scale refers to:
Correct : A. Advantages resulting from large scale production
45. Which one of the following is not related to economies of scale:
Correct : C. Difficulty faces by the managers to coordinate the business
46. The law of Diminishing returns is applicable to:
Correct : D. Universally
47. Let a firm employs 5 labourers and produces 120 units of output. When 6 labourers are employed the firm produces 136 units of output. Then the marginal product is ---
Correct : D. 16
48. A firm produces 200 units of commodity X by employing 10 workers and 240 units of the same commodity by employing 12 workers. Then the Average Product of the worker is --------
Correct : C. 20
49. Other things remaining the same, the quantity of a product demanded
increases with ------------ in price.
Correct : B. Decrease
50. When total utility is maximum, marginal utility is:
Correct : C. Zero
51. For complementary goods, the cross elasticity of demand:
Correct : B. Negative
52. Relation between price of a commodity and demand for another
commodity is measured by:
Correct : C. Cross elasticity
53. When TU falls, MU is:
Correct : D. Negative
54. Demand varies ------------- with price.
Correct : C. Inversely
55. When Q = f (P), the elasticity coefficient is measured by:
Correct : C. ∆Q/∆P * P/Q
56. Income elasticity of demand for inferior good is:
Correct : A. Negative
57. In the case of luxury goods, the income elasticity of demand will be:
Correct : C. More than unity
58. Income elasticity is positive, but less than unity in the case of:
Correct : A. Necessity
59. In drawing an individual demand curve for a commodity, all but which of the following are kept constant:
Correct : C. Price of the commodity under consideration
60. When an individual’s income rises, when everything else remains the same, his demand for normal goods:
Correct : A. Rises
61. When an individual’s income falls, when everything else remains the same, his demand for inferior goods:
Correct : A. Increases
62. When the price of the substitute commodity of X falls, the demand for X:
Correct : B. Falls
63. If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is:
Correct : D. Zero
64. If the income elasticity of demand is greater than one, then the
commodity is:
Correct : A. Necessity
65. If the amount of the commodity purchased remains unchanged when the price of another commodity changes, the cross elasticity of demand between them will be:
Correct : C. Zero
66. Which of the following is an exception to the law of demand?
Correct : A. Giffen good
67. The law of diminishing marginal utility was popularized by:
Correct : B. Marshall
68. If the income elasticity of demand for a commodity is found to be 0.4,
then the commodity concerned is:
Correct : B. Necessity
69. Cross elasticity of demand in the case of substitutes:
Correct : C. Positive
70. If a small change in price leads to infinitely large change in quantity
demanded, then the demand is:
Correct : A. Perfectly elastic
71. Net addition to total utility when one more unit is consumed is:
Correct : B. MU
72. Most important determinant of demand is :
Correct : C. Price
73. Which of the following is the reason for law of demand:
Correct : C. Income effect
74. A market:
Correct : B. Does not necessarily refers to a meeting place between buyer and sellers
75. Net addition to total cost is called:
Correct : A. Marginal cost
76. The market equilibrium for a commodity is determined by :
Correct : C. Balancing of the forces of demand and supply
77. When there are only few sellers of the commodity, the market is called:
Correct : C. Oligopoly
78. If the supply curve of the commodity is having a positive slope, a rise in
the price of the commodity, results in:
Correct : B. Increase in quantity supplied
79. From the position of stable equilibrium, the market supply of a commodity
decreases, while the market demand remains unchanged, then:
Correct : D. Equilibrium price rises, but equilibrium quantity falls
80. Elasticity of supply for a positively sloped straight line supply curve that
intersects the price axis is:
Correct : C. Greater than one
81. In which of the following market, advertisement is absent:
Correct : C. Oligopoly
82. -------------- cost can never become zero.
Correct : B. Fixed cost
83. If a positively sloped linear supply curve crosses the quantity axis, the
elasticity of supply is:
Correct : A. Inelastic
84. If a positively sloped linear supply curve passes through the origin, the
elasticity of supply is
Correct : C. Unitary elastic
85. Average cost is the sum of AVC and
Correct : C. AFC
86. The horizontal supply curve parallel to quantity axis represents
Correct : C. Perfectly elastic supply
87. When output is zero, variable cost is --------
Correct : D. Zero
88. Change in quantity supplied of a product can result from
Correct : A. Changes in own price
89. At prices above the equilibrium price
Correct : A. Quantity supplied exceeds quantity demanded
90. When MC cuts AC, AC is at its ------------
Correct : B. Minimum
91. An increase in market supply, demand remaining the same causes
Correct : C. Decrease in equilibrium price and increase in equilibrium quantity
92. Cost function relates cost to
Correct : B. Output
93. An increase in market demand, supply remaining the same results in
Correct : D. Both equilibrium price and quantity rises
94. There is no distinction between firm and industry in
Correct : B. Monopoly
95. A fall in the market demand, supply remaining the same results in
Correct : D. Both equilibrium price and quantity falls
96. The cost of next best alternative is called
Correct : C. Opportunity cost
97. When MC is greater than AC, AC
Correct : A. Rises
98. There is ------- relationship between price and quantity supplied
Correct : A. Positive
99. Supply curve represents -------- relationship between quantity and
price