[1] 'Golden Handshake Scheme' is associated with -
A.
inviting foreign companies
B.
private investment in public enterprises
C.
establishing joint enterprises
D.
voluntary retirement
Ans:
voluntary retirement
Explanation :
The voluntary retirement scheme (VRS) is the most humane technique to provide overall reduction in the existing strength of the employees. It is a technique used by companies for trimming the workforce employed in the industrial unit. It is also known as 'Golden Handshake' as it is the golden route to retrenchment.
[2] The major objective of monetary policy is to -
A.
Increase government's tax revenue
B.
Revamp the Public Distribution System
C.
Promote economic growth with price stability
D.
Weed out corruption in the economy
Ans:
Promote economic growth with price stability
Explanation :
The main objective of monetary policy is to control the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general economic growth. Further goals of a monetary policy are usually to contribute to lower unemployment, and to maintain predictable exchange rates with other currencies.
[3] The rate of tax increase as the amount of the Lax base Increases is called-
A.
Proportional tax
B.
Progressive tax
C.
Regressive tax
D.
Degressive tax
Ans:
Progressive tax
Explanation :
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate
[4] During periods of inflation, tax rates should -
A.
increase
B.
decrease
C.
remain constant
D.
fluctuate
Ans:
increase
Explanation :
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. In other words, inflation means continuously decrease in the value of money due to excess supply of money in the market. There are two types of inflation demand pull and cost push inflation. Causes behind inflation are reduced taxes, rate decrease in saving, increase in supply of goods, increase in the number of producers in the market. To control inflation there should be an increase in the tax rate and increase in the interest rate.
[5] Cheap Money means -
A.
Low Rate of Interest
B.
Low level of Savings
C.
Low level Income
D.
Excess of Black Money
Ans:
Low Rate of Interest
Explanation :
Cheap Money' is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but bad for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds.
[6] Which among (he following is not the outcome of decrease in prime lending rate?
A.
to raise the bank loan
B.
decline in saving rate
C.
decline in productivity
D.
increased demand of consumer products
Ans:
decline in productivity
Explanation :
Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility. When these rates are high, demand decreases and output falls to meet the new lower demand. Less output requires fewer worker, driving unemployment higher.
[7] The major aim of devaluation is to -
A.
encourage imports
B.
encourage exports
C.
encourage both exports and imports
D.
discourage both exports and imports
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. 'Devaluation' means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit.
[8] Buffer stock operations are conducted by -
A.
Warehousing Corporation of India
B.
State Trading Corporation of India
C.
Food Corporation of India
D.
Ministry of Agriculture
Ans:
Food Corporation of India
Explanation :
Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.
[9] Coal mines were Nationalized in the year :
A.
1970
B.
1971
C.
1972
D.
1976
Ans:
1972
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
The voluntary retirement scheme (VRS) is the most humane technique to provide overall reduction in the existing strength of the employees. It is a technique used by companies for trimming the workforce employed in the industrial unit. It is also known as 'Golden Handshake' as it is the golden route to retrenchment.
[2] The major objective of monetary policy is to -
A.
Increase government's tax revenue
B.
Revamp the Public Distribution System
C.
Promote economic growth with price stability
D.
Weed out corruption in the economy
Ans:
Promote economic growth with price stability
Explanation :
The main objective of monetary policy is to control the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general economic growth. Further goals of a monetary policy are usually to contribute to lower unemployment, and to maintain predictable exchange rates with other currencies.
[3] The rate of tax increase as the amount of the Lax base Increases is called-
A.
Proportional tax
B.
Progressive tax
C.
Regressive tax
D.
Degressive tax
Ans:
Progressive tax
Explanation :
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate
[4] During periods of inflation, tax rates should -
A.
increase
B.
decrease
C.
remain constant
D.
fluctuate
Ans:
increase
Explanation :
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. In other words, inflation means continuously decrease in the value of money due to excess supply of money in the market. There are two types of inflation demand pull and cost push inflation. Causes behind inflation are reduced taxes, rate decrease in saving, increase in supply of goods, increase in the number of producers in the market. To control inflation there should be an increase in the tax rate and increase in the interest rate.
[5] Cheap Money means -
A.
Low Rate of Interest
B.
Low level of Savings
C.
Low level Income
D.
Excess of Black Money
Ans:
Low Rate of Interest
Explanation :
Cheap Money' is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but bad for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds.
[6] Which among (he following is not the outcome of decrease in prime lending rate?
A.
to raise the bank loan
B.
decline in saving rate
C.
decline in productivity
D.
increased demand of consumer products
Ans:
decline in productivity
Explanation :
Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility. When these rates are high, demand decreases and output falls to meet the new lower demand. Less output requires fewer worker, driving unemployment higher.
[7] The major aim of devaluation is to -
A.
encourage imports
B.
encourage exports
C.
encourage both exports and imports
D.
discourage both exports and imports
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. 'Devaluation' means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit.
[8] Buffer stock operations are conducted by -
A.
Warehousing Corporation of India
B.
State Trading Corporation of India
C.
Food Corporation of India
D.
Ministry of Agriculture
Ans:
Food Corporation of India
Explanation :
Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.
[9] Coal mines were Nationalized in the year :
A.
1970
B.
1971
C.
1972
D.
1976
Ans:
1972
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
A progressive tax is a tax in which the tax rate increases as the taxable amount increases. The term "progressive" refers to the way the tax rate progresses from low to high, with the result that a taxpayer's average tax rate is less than the person's marginal tax rate
[4] During periods of inflation, tax rates should -
A.
increase
B.
decrease
C.
remain constant
D.
fluctuate
Ans:
increase
Explanation :
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. In other words, inflation means continuously decrease in the value of money due to excess supply of money in the market. There are two types of inflation demand pull and cost push inflation. Causes behind inflation are reduced taxes, rate decrease in saving, increase in supply of goods, increase in the number of producers in the market. To control inflation there should be an increase in the tax rate and increase in the interest rate.
[5] Cheap Money means -
A.
Low Rate of Interest
B.
Low level of Savings
C.
Low level Income
D.
Excess of Black Money
Ans:
Low Rate of Interest
Explanation :
Cheap Money' is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but bad for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds.
[6] Which among (he following is not the outcome of decrease in prime lending rate?
A.
to raise the bank loan
B.
decline in saving rate
C.
decline in productivity
D.
increased demand of consumer products
Ans:
decline in productivity
Explanation :
Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility. When these rates are high, demand decreases and output falls to meet the new lower demand. Less output requires fewer worker, driving unemployment higher.
[7] The major aim of devaluation is to -
A.
encourage imports
B.
encourage exports
C.
encourage both exports and imports
D.
discourage both exports and imports
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. 'Devaluation' means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit.
[8] Buffer stock operations are conducted by -
A.
Warehousing Corporation of India
B.
State Trading Corporation of India
C.
Food Corporation of India
D.
Ministry of Agriculture
Ans:
Food Corporation of India
Explanation :
Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.
[9] Coal mines were Nationalized in the year :
A.
1970
B.
1971
C.
1972
D.
1976
Ans:
1972
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Cheap Money' is a loan or credit with a low interest rate, or the setting of low interest rates by a central bank like the Federal Reserve. Cheap money is good for borrowers, but bad for investors, who will see the same low interest rates on investments like savings accounts, money market funds, CDs and bonds.
[6] Which among (he following is not the outcome of decrease in prime lending rate?
A.
to raise the bank loan
B.
decline in saving rate
C.
decline in productivity
D.
increased demand of consumer products
Ans:
decline in productivity
Explanation :
Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility. When these rates are high, demand decreases and output falls to meet the new lower demand. Less output requires fewer worker, driving unemployment higher.
[7] The major aim of devaluation is to -
A.
encourage imports
B.
encourage exports
C.
encourage both exports and imports
D.
discourage both exports and imports
Ans:
encourage exports
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. 'Devaluation' means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit.
[8] Buffer stock operations are conducted by -
A.
Warehousing Corporation of India
B.
State Trading Corporation of India
C.
Food Corporation of India
D.
Ministry of Agriculture
Ans:
Food Corporation of India
Explanation :
Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.
[9] Coal mines were Nationalized in the year :
A.
1970
B.
1971
C.
1972
D.
1976
Ans:
1972
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. 'Devaluation' means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency. There are two implications for a currency devaluation. First, devaluation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit.
[8] Buffer stock operations are conducted by -
A.
Warehousing Corporation of India
B.
State Trading Corporation of India
C.
Food Corporation of India
D.
Ministry of Agriculture
Ans:
Food Corporation of India
Explanation :
Government has engaged National Agricultural Cooperative Marketing Federation of India Limited (NAFED), Small Farmers Agri-business Consortium (SFAC) and Food Corporation of India (FCI) to procure pulses for buffer stock.
[9] Coal mines were Nationalized in the year :
A.
1970
B.
1971
C.
1972
D.
1976
Ans:
1972
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
The Coal Conservation and Development Act, 1974 provides for imposition of excise duty on coal despatches for meeting activities like conservation of coal, development of coal mines execution of stowing and other operations for the safety in coal mines and research work connected with conservation and utilisation of coal, and assistance in mining operation. The Coking Coal (Nationalisation) Act was enacted in 1972.
[10] Open market operations of RBI refer to buying and selling of -
A.
Commercial bills
B.
Foreign exchange
C.
Gold
D.
Government bonds
Ans:
Government bonds
Explanation :
OMOs are the market operations conducted by the Reserve Bank of India by way of sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.
[11] A situation where we have people whose level of income is not sufficient to meet the minimum consumption expenditure is considered as -
A.
Absolute Poverty
B.
Relative Poverty
C.
Urban Poverty
D.
Rural Poverty
Ans:
Absolute Poverty
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Absolute poverty is defined as a situation in which the individual's basic needs are not covered, in other words, there is a lack of basic goods and services (normally related to food, housing and clothes). This concept of poverty is strongly linked to destitution which is an inability to meet the minimum consumption expenditure. It is a level of poverty as defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, health care and shelter. According to a UN declaration that resulted from the World Summit on Social Development in Copenhagen in 1995, absolute poverty is "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services."
[12] Of the following land uses, which is restricted to Special Economic Zones?
A.
Educational Institutions
B.
Free trade Centres
C.
Marketing Centres
D.
Information Technology Companies
Ans:
Free trade Centres
Explanation :
The category Special economic zone includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones. The goal of a SEZ structure is to increase foreign direct investment by foreign investors.
[13] As per the TRIPS Agreement-1994, a good originating from a region with specific character/ quality/reputation is covered/to be protected under the IPR as -
A.
Patent
B.
Trademark
C.
Trade secret
D.
GI (Geographical Indicator)
Ans:
GI (Geographical Indicator)
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Geographical Indication (GI) means the name of a region or a locality, a specific place or, in exceptional cases, a country, used to describe a product originating in that region, locality, specific place or country, which possesses a specific quality, reputation or other characteristics attributable to that geographical origin, and the production and/or processing and/or preparation of which take place in the defined geographical area.
[14] At present, India is following -
A.
Fixed exchange rate
B.
Floating exchange rate
C.
Pegged up exchange rate
D.
Pegged down exchange rate
Ans:
Floating exchange rate
Explanation :
Exchange rate can be defined as the value of one currency in terms of another. India follows floating exchange rate system for the determination of the exchange rate. Floating exchange rate system can be defined as a system where the exchange rate between currencies are not fixed but they keep fluctuating, as they are determined by the demand and supply for the domestic currency in the international market. India has been operating on a managed floating exchange rate regime from March 1993, marking the start of an era of a market determined exchange rate regime of the rupee with provision for timely intervention by the central bank
[15] Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states?
A.
Expenditure Tax and Gift Tax
B.
Additional Duties of Excise in lieu of Sales Tax
C.
Stamps and Registration
D.
Taxes on Advertisement
Ans:
Taxes on Advertisement
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Apart from taxes levied and collected by the States, the Constitution has provided for the revenues for certain taxes on the Union List to be allotted, partly or wholly to the States. There are taxes which are levied and collected by the Union, but the entire proceeds of which are assigned to the states, in proportion determined by the Parliament. These taxes include: Succession and Estate duty; Terminal Taxes on goods and passengers; Taxes on railway freight and fares; Taxes on transactions in stock exchanges and future markets; and Taxes on sale and purchase of newspapers and advertisements therein.
[16] With which form of economy is the term 'Laissez-faire' associated?
A.
Capitalist economy
B.
Socialist economy
C.
Mixed economy
D.
Command economy
Ans:
Capitalist economy
Explanation :
In economics, laissez-faire means allowing industry to be free of state intervention, especially restrictions in the form of tariffs and government monopolies. The growth of industry in England in the early 19th century and American industrial growth in the late 19th century both occurred in a laissez- faire capitalist environment.
[17] National Social Assistance Programme is aimed at providing -
A.
financial support to Scheduled Castes and Scheduled Tribes
B.
old age pension to very poor
C.
insurance for the poor
D.
All of the above
Ans:
old age pension to very poor
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
The National Social Assistance Scheme (NSAS) or National Social Assistance Programme (NSAP) is a flagship welfare programme of the Government of India initiated on 15 August 1995. It provides a pension for the elderly who live below the poverty line. Article 41 of the Indian Constitution directs the State to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within the limit of its economic capacity and development.
[18] Which of the following is a part of tertiary sector?
A.
Power and transportation
B.
Animal Husbandry
C.
Cotton manufacturing
D.
Cultivation of crops
Ans:
Power and transportation
Explanation :
The service sector, also called the tertiary sector, is one of the three parts of the economy in the Three- sector hypothesis. It involves the provision of services to business as well as final consumers. Services may involve the transport, distribution and sale of goods from producer to consumers as may happen in wholesaling and retailing, or may involve the provision of a service, such as in pest control or entertainment.
[19] If the average total cost is Rs.54, total fixed cost is Rs.45000 and quantity produced is 2500 units, find the average variable costs (in Rs.) of the firm -
A.
24
B.
18
C.
36
D.
60
Ans:
36
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
The standard method of calculating average variable cost is to divide total variable cost by the quantity, illustrated by this equation : Average Variable Cost = Total Variable Cost/ Quantity of Output An alternative specification for average variable cost is found by subtracting average fixed cost from average total cost Average Variable Cost = Average Total Cost - Average Fixed Cost According to question, Average Total Cost = 45000/2500 = 18 So Average Variable Cost TRUE
[20] If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
A.
20000
B.
10000
C.
15000
D.
12000
Ans:
20000
Explanation :
Breakeven quantity is the number of incremental units that the firm needs to sell to cover the cost of a marketing program or other type of investment. It is given by the formula: BEQ = FC / (P-VC) Where BEQ = Break-even quantity FC = Total fixed costs P = Average price per unit, and VC = Variable costs per unit, According to the question, Price per unit = 30/12 = Rs. 2.5 So 20000/ (2.5-1.5) = 20000/1= Rs. 20,000
[21] Equilibrium price in the market is determined by the -
A.
equality between marginal cost and average cost.
B.
equality between total cost and total revenue.
C.
equality between average cost and average revenue.
D.
equality between marginal cost and marginal revenue.
Ans:
equality between marginal cost and marginal revenue.
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. Both under perfect competition and monopolistic competition, the firm is in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
[22] Internal economies -
A.
arise when there is expansion in an industry.
B.
arise in an economy as it makes progress.
C.
accrue to a firm when it expands its output.
D.
arise when there is expansion in internal trade.
Ans:
arise when there is expansion in an industry.
Explanation :
Internal economies are those economies in production—those reductions in production costs—which accrue to the firm itself when it expands its output or enlarges its scale of production. The internal economies arise within a firm as a result of its own expansion independent of the size and expansion of the industry as a whole.
[23] One of the features of a free market economy is -
A.
active state intervention
B.
public ownership of factors of production
C.
rationing and price control
D.
consumer's sovereignty
Ans:
consumer's sovereignty
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Consumer Sovereignty is one of the features of a free market economy. It refers to the assertion consumer preferences determine the production of goods and services. In a free market system, market performance is in fact responsive to the specific wants of the consumers within the system.
[24] Which of the following costs is related to marginal cost?
A.
Variable Cost
B.
Implicit Cost
C.
Prime Cost
D.
Fixed Cost
Ans:
Variable Cost
Explanation :
In economics, marginal cost is the change in the total cost that arises when the quantity produced is Incremented by one unit. That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors. Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run. It is only the variable costs that vary with output in the short run.
[25] Which one of the following is not a dimension of human development, index?
A.
Life expectancy
B.
Knowledge
C.
Social status
D.
Standard of living
Ans:
Social status
Explanation :
Social Status is not a dimension of Human Development Index
Explanation :
Social Status is not a dimension of Human Development Index