Quiznetik

Basics of Economics | Set 1

1. The economic problem arises since

Correct : D. all of the above

2. Economic problem arises in

Correct : D. all of the above

3. The resources are :

Correct : C. not only limited but are capable of alternative uses

4. ----- is not an example of free good

Correct : A. sunlight

5. The term production refers to:

Correct : D. all of the above

6. The problem of allocation of resources is concerned with:

Correct : A. what to produce

7. The distribution of national product among the members of the society is the problem of:

Correct : C. for whom to produce

8. Which one of the following come under macro economics:

Correct : A. per capita income

9. Which one of the following is not come under macro economics

Correct : D. individual income

10. Partial equilibrium analysis come under:

Correct : A. micro economics

11. “The starting point of all economic activity is the existence of human wants” Who said this?

Correct : B. selligman

12. Production and consumption takes place simultaneously in the case of

Correct : B. services

13. Economic growth can be achieved through

Correct : C. both a & b

14. Micro economics doesn’t deal with:

Correct : D. general equilibrium analysis

15. Name the economist who analyses the subject matter of economics into two branches: micro economic analysis and macro economic analysis.

Correct : C. ragner frisc

16. Transformation of inputs into outputs is known as

Correct : A. production

17. ----- is an example of secondary input

Correct : D. raw material

18. Odd-man out from the following

Correct : C. education

19. The choice of techniques of production is related to the problem of

Correct : B. how to produce

20. The functional relationship between inputs and outputs is called

Correct : A. production function

21. Firms owned by one individual is known as

Correct : A. proprietorship

22. Firms owned by two or more individuals is known as

Correct : B. partnership

23. Firms owned by stock holders are known as

Correct : C. corporations

24. The major objective of a firm is

Correct : A. profit maximization

25. Which one of the following is an example of fixed input

Correct : C. plant and equipments

26. In short-run

Correct : C. some inputs are fixed and some are variable

27. In long-run

Correct : B. all inputs are variable

28. The variable cost of a firm vary in direct proportion to the

Correct : A. volume of its output

29. Law of variable proportions is concerned with

Correct : C. short-run production function

30. The ‘point of inflection’ come in which stage of the law of variable proportions

Correct : A. stage i

31. A rational producer will select his level of production in which stage of the law of variable proportions

Correct : B. stage ii

32. Total product reaches at maximum when

Correct : C. mp = 0

33. Returns to scale refers to the production function where

Correct : C. all factors are variable

34. 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

35. Increasing returns to scale occurs due to

Correct : D. all of the above

36. The cause for diminishing returns to scale is:

Correct : D. all of the above

37. The solution to diminishing returns to scale is :

Correct : D. all of the above

38. Which one of the following is not related to economies of scale:

Correct : C. difficulty faces by the managers to coordinate the business

39. The law of Diminishing returns is applicable to:

Correct : D. universally

40. labourers are employed the firm produces 136 units of output. Then the marginal product is ---

Correct : C. 6

41. Other things remaining the same, the quantity of a product demanded increases with ------------ in price.

Correct : B. decrease

42. When total utility is maximum, marginal utility is:

Correct : C. zero

43. For complementary goods, the cross elasticity of demand:

Correct : B. negative

44. Relation between price of a commodity and demand for another commodity is measured by:

Correct : C. cross elasticity

45. When TU falls, MU is:

Correct : D. negative

46. Demand varies ------------- with price.

Correct : C. inversely

47. When Q = f (P), the elasticity coefficient is measured by:

Correct : C. ∆q/∆p * p/q

48. Income elasticity of demand for inferior good is:

Correct : A. negative

49. In the case of luxury goods, the income elasticity of demand will be:

Correct : C. more than unity

50. Income elasticity is positive, but less than unity in the case of:

Correct : A. necessity

51. 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

52. When an individual’s income rises, when everything else remains the same, his demand for normal goods:

Correct : A. rises

53. When an individual’s income falls, when everything else remains the same, his demand for inferior goods:

Correct : A. increases

54. When the price of the substitute commodity of X falls, the demand for X:

Correct : B. falls

55. If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is:

Correct : D. zero

56. If the income elasticity of demand is greater than one, then the commodity is:

Correct : A. necessity

57. Which of the following is an exception to the law of demand?

Correct : A. giffen good

58. The law of diminishing marginal utility was popularized by:

Correct : B. marshall

59. If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is:

Correct : B. necessity

60. Cross elasticity of demand in the case of substitutes:

Correct : C. positive

61. If a small change in price leads to infinitely large change in quantity demanded, then the demand is:

Correct : A. perfectly elastic

62. Net addition to total utility when one more unit is consumed is:

Correct : B. mu

63. Most important determinant of demand is :

Correct : C. price

64. Which of the following is the reason for law of demand:

Correct : C. income effect

65. Net addition to total cost is called:

Correct : A. marginal cost

66. The market equilibrium for a commodity is determined by :

Correct : C. balancing of the forces of demand and supply

67. When there are only few sellers of the commodity, the market is called:

Correct : C. oligopoly

68. 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

69. 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

70. Elasticity of supply for a positively sloped straight line supply curve that intersects the price axis is:

Correct : C. greater than one

71. In which of the following market, advertisement is absent:

Correct : C. oligopoly

72. -------------- cost can never become zero.

Correct : B. fixed cost

73. If a positively sloped linear supply curve crosses the quantity axis, the elasticity of supply is:

Correct : A. inelastic

74. If a positively sloped linear supply curve passes through the origin, the elasticity of supply is

Correct : C. unitary elastic

75. Average cost is the sum of AVC and

Correct : C. afc

76. The horizontal supply curve parallel to quantity axis represents

Correct : C. perfectly elastic supply

77. When output is zero, variable cost is --------

Correct : D. zero

78. Change in quantity supplied of a product can result from

Correct : A. changes in own price

79. At prices above the equilibrium price

Correct : A. quantity supplied exceeds quantity demanded

80. When MC cuts AC, AC is at its ------------

Correct : B. minimum

81. Cost function relates cost to

Correct : B. output

82. An increase in market demand, supply remaining the same results in

Correct : D. both equilibrium price and quantity rises

83. There is no distinction between firm and industry in

Correct : B. monopoly

84. A fall in the market demand, supply remaining the same results in

Correct : D. both equilibrium price and quantity falls

85. The cost of next best alternative is called

Correct : C. opportunity cost

86. When MC is greater than AC, AC

Correct : A. rises

87. There is ------- relationship between price and quantity supplied

Correct : A. positive

88. Supply curve represents -------- relationship between quantity and price

Correct : A. direct

89. National Income means:

Correct : C. nnp at factor cost

90. The difference between GDP and NDP equals:

Correct : D. depreciation

91. Which of the following is true?

Correct : B. gnp = gdp + net factor income from abroad

92. NNP is equal to:

Correct : B. gnp minus depreciation

93. Which of the following is not a method of national income estimation?

Correct : A. matrix method

94. An accounting year in India is:

Correct : C. fiscal year

95. Increase in real National Income (NI) means increase in:

Correct : B. ni at constant prices

96. Net indirect taxes means:

Correct : C. indirect taxes minus subsidies

97. Net factor income from abroad shows the difference between:

Correct : C. gnp and gdp

98. Per capita income is equal to:

Correct : B. national income/population

99. National income in India is estimated by:

Correct : C. cso

100. The first estimate of National income in India was done by:

Correct : C. dadabai naoroji