[1] Economic rent refers to -
A.
Payment made for the use of labour
B.
Payment made for the use of capital
C.
Payment made for the use of organisation
D.
Payment made for the use of land
Ans:
Payment made for the use of land
Explanation :
Rent refers to that part of payment by a tenant which is made only for the use of land, i.e., free gift of nature. The payment made by an agriculturist tenant to the landlord is not necessarily equals to the economic rent. A part of this payment may consist of interest on capital invested in the land by the land-lord in the form of buildings, fences, tube wells, etc. The term 'economic rent' refers to that part of payment which is made for the use of land only, and the total payment made by a tenant to the landlord is called 'contract rent'. Economic rent is also called surplus because it emerges without any effort on the part of a landlord.
[2] "Interest is a reward for parting with liquidity" is according to -
A.
Keynes
B.
Marshall
C.
Haberler
D.
Ohlin
Ans:
Keynes
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money. The demand for money as an asset was theorized to depend on the interest foregone by not holding bonds. Interest rates, he argues, cannot be a reward for saving as such because, if a person hoards his savings in cash, keeping it under his mattress say, he will receive no interest, although he has nevertheless refrained from consuming all his current income. Instead of a reward for saving, interest in the Keynesian analysis is a reward for parting with liquidity.
[3] Extension or contraction of quantity demanded of a commodity is a result of a change in the -
A.
unit price of the commodity
B.
income of the consutner
C.
tastes of the consumer
D.
climate of the region
Ans:
unit price of the commodity
Explanation :
Demand for a commodity refers to the quantity of the commodity that people are willing to purchase at a specific price per unit of time, other factors (such as price of related goods, income, tastes and preferences, advertising, etc) being constant. Demand includes the desire to buy the commodity accompanied by the willingness to buy it and sufficient purchasing power to purchase it. So changes in the unit price of a commodity leads to either extension or contraction in demand. The law of demand states that there is an inverse relationship between quantity demanded of a commodity and its price, other factors being constant. In other words, higher the price, lower the demand and vice versa, other things remaining constant.
[4] Why is rent earned by land even in the long run?
A.
Land has original and indestructible power
B.
Land is a man made factor
C.
Its supply is inelastic in the short run
D.
Its supply is inelastic in the long run
Ans:
Its supply is inelastic in the long run
Explanation :
Rent accrues to land which is fixed in supply even in the longer run. It is permanent. In contrast to it is a quasi rent, introduced by Marshall, which is inelastic in the short run, but elastic in the longer run.
[5] Who is called the Father of Economics?
A.
J.M. Keynes
B.
Malthus
C.
Ricardo
D.
Adam Smith
Ans:
Adam Smith
Explanation :
Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An In- gully into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.
[6] A horizontal demand curve is -
A.
relatively elastic
B.
perfectly inelastic
C.
perfectly elastic
D.
of unitary elasticity
Ans:
perfectly elastic
Explanation :
The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) product. A horizontal demand curve is a flat curve with a slope of zero. It is a perfectly elastic demand curve. Because the slope of the curve is zero, it is impossible for the price to change in the market.
[7] The theory of monopolistic competition has been formulated in the United States of America by -
A.
Joan Robinson
B.
Edward Chamberlin
C.
John Bates Clark
D.
Joseph Schumpeter
Ans:
Edward Chamberlin
Explanation :
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. Chamberlin published his book 'The Theory of Monopolistic Competition' in 1933, the same year that Joan Robinson published her book on the same topic: The Economics of Imperfect Competition,' so these two economists can be regarded as the parents of the modern study of imperfect competition.
[8] The remuneration of the entrepreneur in production is -
A.
Pure profit
B.
Gross profit
C.
Net profit
D.
Super-normal profit
Ans:
Net profit
Explanation :
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. His profit is in the form of Net Profit which is achieved by deducting other elements (such as planning the production, producing the commodities on the basis of demand, looking after efficient distribution) from the gross profit.
[9] Elasticity (e) expressed by the formula 1 > e > 0 is -
A.
Perfectly elastic
B.
Relatively elastic
C.
Perfectly inelastic
D.
Relatively inelastic
Ans:
Relatively inelastic
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Rent refers to that part of payment by a tenant which is made only for the use of land, i.e., free gift of nature. The payment made by an agriculturist tenant to the landlord is not necessarily equals to the economic rent. A part of this payment may consist of interest on capital invested in the land by the land-lord in the form of buildings, fences, tube wells, etc. The term 'economic rent' refers to that part of payment which is made for the use of land only, and the total payment made by a tenant to the landlord is called 'contract rent'. Economic rent is also called surplus because it emerges without any effort on the part of a landlord.
[2] "Interest is a reward for parting with liquidity" is according to -
A.
Keynes
B.
Marshall
C.
Haberler
D.
Ohlin
Ans:
Keynes
Explanation :
In macroeconomic theory, liquidity preference refers to the demand for money, considered as liquidity. The concept was first developed by John Maynard Keynes in his book The General Theory of Employment, Interest and Money (1936) to explain determination of the interest rate by the supply and demand for money. The demand for money as an asset was theorized to depend on the interest foregone by not holding bonds. Interest rates, he argues, cannot be a reward for saving as such because, if a person hoards his savings in cash, keeping it under his mattress say, he will receive no interest, although he has nevertheless refrained from consuming all his current income. Instead of a reward for saving, interest in the Keynesian analysis is a reward for parting with liquidity.
[3] Extension or contraction of quantity demanded of a commodity is a result of a change in the -
A.
unit price of the commodity
B.
income of the consutner
C.
tastes of the consumer
D.
climate of the region
Ans:
unit price of the commodity
Explanation :
Demand for a commodity refers to the quantity of the commodity that people are willing to purchase at a specific price per unit of time, other factors (such as price of related goods, income, tastes and preferences, advertising, etc) being constant. Demand includes the desire to buy the commodity accompanied by the willingness to buy it and sufficient purchasing power to purchase it. So changes in the unit price of a commodity leads to either extension or contraction in demand. The law of demand states that there is an inverse relationship between quantity demanded of a commodity and its price, other factors being constant. In other words, higher the price, lower the demand and vice versa, other things remaining constant.
[4] Why is rent earned by land even in the long run?
A.
Land has original and indestructible power
B.
Land is a man made factor
C.
Its supply is inelastic in the short run
D.
Its supply is inelastic in the long run
Ans:
Its supply is inelastic in the long run
Explanation :
Rent accrues to land which is fixed in supply even in the longer run. It is permanent. In contrast to it is a quasi rent, introduced by Marshall, which is inelastic in the short run, but elastic in the longer run.
[5] Who is called the Father of Economics?
A.
J.M. Keynes
B.
Malthus
C.
Ricardo
D.
Adam Smith
Ans:
Adam Smith
Explanation :
Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An In- gully into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.
[6] A horizontal demand curve is -
A.
relatively elastic
B.
perfectly inelastic
C.
perfectly elastic
D.
of unitary elasticity
Ans:
perfectly elastic
Explanation :
The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) product. A horizontal demand curve is a flat curve with a slope of zero. It is a perfectly elastic demand curve. Because the slope of the curve is zero, it is impossible for the price to change in the market.
[7] The theory of monopolistic competition has been formulated in the United States of America by -
A.
Joan Robinson
B.
Edward Chamberlin
C.
John Bates Clark
D.
Joseph Schumpeter
Ans:
Edward Chamberlin
Explanation :
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. Chamberlin published his book 'The Theory of Monopolistic Competition' in 1933, the same year that Joan Robinson published her book on the same topic: The Economics of Imperfect Competition,' so these two economists can be regarded as the parents of the modern study of imperfect competition.
[8] The remuneration of the entrepreneur in production is -
A.
Pure profit
B.
Gross profit
C.
Net profit
D.
Super-normal profit
Ans:
Net profit
Explanation :
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. His profit is in the form of Net Profit which is achieved by deducting other elements (such as planning the production, producing the commodities on the basis of demand, looking after efficient distribution) from the gross profit.
[9] Elasticity (e) expressed by the formula 1 > e > 0 is -
A.
Perfectly elastic
B.
Relatively elastic
C.
Perfectly inelastic
D.
Relatively inelastic
Ans:
Relatively inelastic
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Demand for a commodity refers to the quantity of the commodity that people are willing to purchase at a specific price per unit of time, other factors (such as price of related goods, income, tastes and preferences, advertising, etc) being constant. Demand includes the desire to buy the commodity accompanied by the willingness to buy it and sufficient purchasing power to purchase it. So changes in the unit price of a commodity leads to either extension or contraction in demand. The law of demand states that there is an inverse relationship between quantity demanded of a commodity and its price, other factors being constant. In other words, higher the price, lower the demand and vice versa, other things remaining constant.
[4] Why is rent earned by land even in the long run?
A.
Land has original and indestructible power
B.
Land is a man made factor
C.
Its supply is inelastic in the short run
D.
Its supply is inelastic in the long run
Ans:
Its supply is inelastic in the long run
Explanation :
Rent accrues to land which is fixed in supply even in the longer run. It is permanent. In contrast to it is a quasi rent, introduced by Marshall, which is inelastic in the short run, but elastic in the longer run.
[5] Who is called the Father of Economics?
A.
J.M. Keynes
B.
Malthus
C.
Ricardo
D.
Adam Smith
Ans:
Adam Smith
Explanation :
Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An In- gully into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.
[6] A horizontal demand curve is -
A.
relatively elastic
B.
perfectly inelastic
C.
perfectly elastic
D.
of unitary elasticity
Ans:
perfectly elastic
Explanation :
The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) product. A horizontal demand curve is a flat curve with a slope of zero. It is a perfectly elastic demand curve. Because the slope of the curve is zero, it is impossible for the price to change in the market.
[7] The theory of monopolistic competition has been formulated in the United States of America by -
A.
Joan Robinson
B.
Edward Chamberlin
C.
John Bates Clark
D.
Joseph Schumpeter
Ans:
Edward Chamberlin
Explanation :
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. Chamberlin published his book 'The Theory of Monopolistic Competition' in 1933, the same year that Joan Robinson published her book on the same topic: The Economics of Imperfect Competition,' so these two economists can be regarded as the parents of the modern study of imperfect competition.
[8] The remuneration of the entrepreneur in production is -
A.
Pure profit
B.
Gross profit
C.
Net profit
D.
Super-normal profit
Ans:
Net profit
Explanation :
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. His profit is in the form of Net Profit which is achieved by deducting other elements (such as planning the production, producing the commodities on the basis of demand, looking after efficient distribution) from the gross profit.
[9] Elasticity (e) expressed by the formula 1 > e > 0 is -
A.
Perfectly elastic
B.
Relatively elastic
C.
Perfectly inelastic
D.
Relatively inelastic
Ans:
Relatively inelastic
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An In- gully into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.
[6] A horizontal demand curve is -
A.
relatively elastic
B.
perfectly inelastic
C.
perfectly elastic
D.
of unitary elasticity
Ans:
perfectly elastic
Explanation :
The demand curve facing a perfectly competitive firm is flat or horizontal. This is because all firms in perfect competition are by definition selling an identical (homogeneous) product. A horizontal demand curve is a flat curve with a slope of zero. It is a perfectly elastic demand curve. Because the slope of the curve is zero, it is impossible for the price to change in the market.
[7] The theory of monopolistic competition has been formulated in the United States of America by -
A.
Joan Robinson
B.
Edward Chamberlin
C.
John Bates Clark
D.
Joseph Schumpeter
Ans:
Edward Chamberlin
Explanation :
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. Chamberlin published his book 'The Theory of Monopolistic Competition' in 1933, the same year that Joan Robinson published her book on the same topic: The Economics of Imperfect Competition,' so these two economists can be regarded as the parents of the modern study of imperfect competition.
[8] The remuneration of the entrepreneur in production is -
A.
Pure profit
B.
Gross profit
C.
Net profit
D.
Super-normal profit
Ans:
Net profit
Explanation :
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. His profit is in the form of Net Profit which is achieved by deducting other elements (such as planning the production, producing the commodities on the basis of demand, looking after efficient distribution) from the gross profit.
[9] Elasticity (e) expressed by the formula 1 > e > 0 is -
A.
Perfectly elastic
B.
Relatively elastic
C.
Perfectly inelastic
D.
Relatively inelastic
Ans:
Relatively inelastic
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition. Chamberlin published his book 'The Theory of Monopolistic Competition' in 1933, the same year that Joan Robinson published her book on the same topic: The Economics of Imperfect Competition,' so these two economists can be regarded as the parents of the modern study of imperfect competition.
[8] The remuneration of the entrepreneur in production is -
A.
Pure profit
B.
Gross profit
C.
Net profit
D.
Super-normal profit
Ans:
Net profit
Explanation :
Economists divide the factors of production into four categories: land, labor, capital, and entrepreneurship. An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. His profit is in the form of Net Profit which is achieved by deducting other elements (such as planning the production, producing the commodities on the basis of demand, looking after efficient distribution) from the gross profit.
[9] Elasticity (e) expressed by the formula 1 > e > 0 is -
A.
Perfectly elastic
B.
Relatively elastic
C.
Perfectly inelastic
D.
Relatively inelastic
Ans:
Relatively inelastic
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Elasticity (e) expressed by the formula 1 > e > 0 is relatively inelastic. Elasticity is responsiveness of one variable to a change in another, when other conditions are held constant.
[10] Production refers to -
A.
destruction of utility
B.
creation of utilities
C.
exchange value
D.
use of a product
Ans:
creation of utilities
Explanation :
Production refers to "the creation of utility having value-in-exchange." The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
[11] The law of diminishing returns applies to -
A.
All sectors
B.
Industrial sector
C.
Agricultural sector
D.
Service sector
Ans:
All sectors
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
The classical economists were of the opinion that - the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
[12] The study of factor pricing is alternatively called the theory of -
A.
functional distribution
B.
personal distribution
C.
income distribution
D.
wealth distribution
Ans:
functional distribution
Explanation :
In economics, the study of factor pricing is related to the theory of functional distribution which attempts to explain the prices of land, labour, and capital. It sees the demand for land, labour, and capital as derived demand, stemming from the demand for final goods.
[13] In a free enterprise economy, resource allocation is determined by -
A.
the pattern of consumers' spending
B.
the wealth of the entrepreneurs
C.
decision of the Government
D.
the traditional employment of factors
Ans:
the pattern of consumers' spending
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
In a free market economy, resources are allocated through the interaction of free and self-directed market forces. This means that what to produce is determined by consumers' capacity to spend. How to produce is determined by producers, and who gets the products depends upon the purchasing power of consumers.
[14] Who developed the innovations theory of profit?
A.
Walker
B.
Clark
C.
Knight
D.
Schumpeter
Ans:
Schumpeter
Explanation :
Joseph Alois Schumpeter (1883-1950) was Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth. He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
[15] In the case of an inferior good, the income elasticity of demand is :
A.
Zero
B.
Negative
C.
Infinite
D.
Positive
Ans:
Negative
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
[16] Production Function relates to:
A.
costs to outputs
B.
costs to inputs
C.
inputs to outputs
D.
wage level to profits
Ans:
inputs to outputs
Explanation :
In microeconomics and macroeconomics, a production function is a function that specifies the out-put of a firm, an industry, or an entire economy for all combinations of inputs. The primary purpose of the production function is to address allocative efficiency in the use of factor inputs in production and the resulting distribution of income to those factors.
[17] Under increasing returns the supply curve is -
A.
positively sloped from is to right
B.
negatively sloped from left to right
C.
parallel to the quantity-axis
D.
parallel to the price -axis
Ans:
positively sloped from is to right
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. ln most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e„ as the price of a commodity increases in the market, the amount supplied increases).
[18] The term "market" in Economics means -
A.
A central place
B.
Presence of competition
C.
Place where goods are stored
D.
Shops and super bazars
Ans:
A central place
Explanation :
The most important defining characteristic of a market in economics is that it allows buyers and sellers to exchange any type of goods, services and information. According to Walter Christaller's 'Central Place Theory,' a central place is a market center for the exchange of goods and services by people attracted from the surrounding area. The central place is so called because it is centrally located to maximize accessibility from the surrounding region.
[19] Division of labour is limited by -
A.
the number of workers
B.
hours of work
C.
extent of the market
D.
working space
Ans:
extent of the market
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Division of labour is a process whereby the production process is broken clown into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division mils (always be limited by the extent of that power, or, other words, by the extent of the market.
[20] Cross elasticity of demand between petrol and car is -
A.
infinite
B.
positive
C.
zero
D.
negative
Ans:
negative
Explanation :
In economics, the cross elasticity of demand or cross-price elasticity of demand measures the responsiveness of the demand for a good to a change in the price of anal her good. It is measured as the percentage change in demand for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the demand of new cars that are (110 inefficient decreased by 20%, the cross elasticity of demand would be -2. A negative cross elasticity denotes two products that are complements, while a positive cross elasticity denotes two substitute products
[21] The Law of Demand expresses -
A.
effect of change in price of a commodity on its demand
B.
effect of change in demand of a commodity on its price
C.
effect of change in demand of a commodity over the supply of its substitute
D.
None of the above
Ans:
effect of change in price of a commodity on its demand
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price. Price is the key determinant of demand. Fluctuations in price leads to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
[22] If the price of an inferior good falls, its demand -
A.
rises
B.
falls
C.
remains constant
D.
can be any of the above
Ans:
rises
Explanation :
Some goods are known as inferior goods. With inferior goods, there is an inverse relationship between real income and the demand for the good in question. If real incomes rise, the demand for an inferior good will fall. If real incomes fall (in a recession, for instance), the demand for an inferior good will rise. Example: Bus travel. As people get richer, they are more likely to buy themselves a car, or use a taxi, rather than rely on the more inferior bus, so the demand for bus travel falls as real incomes rise.
[23] The Marginal Utility Curve slopes downward from left to right indicating -
A.
A direct relationship between marginal utility and the stock of commodity
B.
A constant relationship between marginal utility and the stock of commodity
C.
A proportionate relation-ship between marginal utility and the stock of commodity
D.
An inverse relationship between marginal utility and the stock of commodity
Ans:
An inverse relationship between marginal utility and the stock of commodity
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
The Marginal Utility Curve is a curve illustrating the relation between the marginal utility obtained from consuming an additional unit of good and the quantity of the good consumed. The negative slope of the marginal utility curve reflects the law of diminishing marginal utility. The marginal utility curve also can be used to derive the demand curve. Marginal Utility is the utility derived from the last unit of a commodity purchased. One of the earliest Explanations of the inverse relationship between price and quantity demanded is the law of diminishing marginal utility. This law suggests that as more of a product is consumed the marginal (additional) benefit to the consumer falls; hence consumers are prepared to pay less.
[24] The term 'Macro Economics' was used by _.
A.
J.M. Keynes
B.
Ragner Frisch
C.
Ragner Nurkse
D.
Prof. Knight
Ans:
Ragner Frisch
Explanation :
Ragnar Frisch coined the widely-used term pair macroeconomics/ microeconomics in 1933. He was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. Fie is known for having founded the discipline of econometrics.
[25] Tax on inheritance is called -
A.
Excise duty
B.
Estate duty
C.
Gift tax
D.
Sales tax
Ans:
Estate duty
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.
Explanation :
Estate duty is a tax on the total market value of a person's assets at the date of his or her death. The deceased person's assets, as a whole, are called an estate. Inheritance tax is levied on assets that legal heirs inherit, while estate duty is applicable on the assets of those who are dead.