Definition Economics and Economy

Definition Economics and Economy 1. ‘Economics is the study of mankind in the ordinary business of life’ . This definition was given by : – (a) Adam Smith (b) Lord Robbins (c) Alfred Marshall (d) Samuelson Ans: (c) 2. The branch of economic theory, that deals with the problem of allocation of resources is : (a) Micro Economics (b) Macro Economics (c) Econometrics (d) None of these Ans: (a) 3. A study of how increase in the corporate income tax rate , will affect the natural unemployment rate is an example of : (a) Macro Economics (b) Descriptive Economics (c) Micro Economics (d) Normative Economics Ans: (a) 4. If a point falls inside the production possibility curve, what does it indicate ? (a) Resources are over utilized (b) Resources are under utilized (c) There is employment in the economy (d) Both (b) and (c) Ans: (b) 5. In which type of economy do consumers and producers make their choices based on the market forces of demand and supply? (a) Open Economy (b) Controlled Economy (c) Command Economy (d) Market Economy Ans: (d) 6. Under a free economy, prices are : (a) Regulated (b) Determined through free interplay of demand and supply (c) Partly regulated. (d) None of these Ans: (b) 7. Which of the following falls under micro economics ? (a) National income (b) General price level (c) Factor pricing (d) National saving and investment Ans: (c) 8. In a free market economy, when consumers increase their purchase of a goods and the level of _______ exceeds _______ then prices tend to rise (a) Demand, Supply (b) Supply, Demand (c) Prices, Demand (d) Profits, Supply Ans: (a) 9. Under Inductive method, the logic proceeds from : (a) General to particulars (b) Particular to general (c) Both (a) and (b) (d) None Ans: (b) 10. According to Robbins, ‘means’ are: (a) Scarce (b) Unlimited (c) Undefined (d) All of these Ans: (a) 11. Inputs are combined with technology to produce outputs. The fundamental inputs (also called factors of production) are (A) land and capital (B) land and labor (C) land, labor, and capital (D) land, labor, capital, and investment Ans: (C) 12. Goods produced to produce yet other goods is called (A) final goods (B) capital (C) investment (D) resources Ans: (B) 13. Which economic term is used to represent inequality in income distribution? (A) GDP (B) GNP (C) Gini (D) HDI Ans: (C) 14. The value of the good or service forgone by choosing another investment is called (A) opportunity cost (B) purchasing power parity (C) disposable income (D) consumer price index Ans: (A) 15. The central role of markets is to determine the (A) quality of goods (B) quantity of goods (C) level of income (D) price of goods Ans: (D) 16. The branch of economics concerned with overall performance of the economy is known as (A) Microeconomics (B) Macroeconomics (C) Econometrics (D) Keynesian Economics Ans: (B) 17. The branch of economics concerned with the use of statistical methods to obtain empirical results for economic relations is known as (A) Microeconomics (B) Macroeconomics (C) Econometrics (D) Keynesian Economics Ans: (C) 18. The branch of economics concerned with the behavior of markets, firms, and households is known as (A) Microeconomics (B) Macroeconomics (C) Econometrics (D) Bayesian Economics Ans: (A) 19. An economy is producing efficiently when no individual’s economic welfare can be improved unless (A) supply is increased (B) demand is increased (C) someone else is improved (D) someone else is made worse off Ans: (D) 20. Taxes are used to discourage __________ of a commodity. (A) consumption (B) production (C) saving (D) inflation Ans: (A) Difference between Micro and Macro Economics 1. The another name of price theory may called (a) Micro economic (b) macro-economic (c) Finance economic (d) Insurance economic Ans-(a) Micro economic 2. Macroeconomics is concerned with which of the following: (a) Level of goods and services produced in the entire economy (b) General Price level (c) National income (d) All the above Ans-(d) All the above 3. Which of the following subjects are not included the scope of macroeconomics? (a) Individual demand (b) Theory of money (c) National income (d) Theory of economic development Ans-(a) Individual demand 4. The difference between microeconomics and Macroeconomics may be? (a) Difference between different sets of assumptions (b) Difference in degree of aggregation (c) Difference in the scope of study (d) All of the above Ans-(d) All of the above 5. Which of the following statement fits to macroeconomics? (a) Private production is promoted (b) Scarcity and choice are studied (c) Study of national income (d) None of these Ans-(c) Study of national income 6. An increase in national income because of an increase in prices only is called an a) Increase in real income b) Increase in national income at constant prices c) Increase in nominal national income d) Increase in national income at base year prices Answer :- c 7. The national income of a country for a given period is equal to the a) Consumption and investment expenditure incurred by the government b) Consumption and investment expenditure incurred by Indians abroad c) Consumption and investment expenditure incurred by private sector d) Consumption and investment expenditure incurred by all the above Answer :- d 8. The growth rate in per capita income at current prices is higher than that of per capita income at constant prices, because the former takes into account the rate of a) Growth of population b) Increase in price level c) Growth of money supply d) Increase in the wage rate Answer :- b 9. The value of all final goods and services produced by the normal residents of a country and their property, whether operating within the domestic territory of the country or outside, in a year is termed a) Gross national income b) Net national income c) Gross domestic product d) Net domestic product Answer :- a 10. National income in context of India is the collective income of all the Indians. Which of the following is equivalent to national income? a) Gross domestic product at market price b) Net domestic product at factor prices c) Net national product at market prices d) Net national product at factor cost Answer :- d 11. Which one of the following is responsible for bringing out the report on national and per capital income in India? a) Ministry of Planning b) Ministry of Human Resource Development c) Ministry of Home Affairs d) Ministry of Statistics and Programme Implementation Answer :- d 12. The main reason for the low growth rate in India in spite of high rates of savings and capital formation is a) Low rate of investment rate b) Low level of foreign investment c) Low capital/output ratio d) High capital/output ratio Answer :- d 13. In India, National Income Statistics are computed by which of the following ? a) Planning Commission b) Ministry of Finance c) Central Statistical Office d) RBI Answer :- c 14. Inclusive growth is the agenda of economic development in the future. The strategy of inclusive growth does not focus on a) Enhancement of education opportunities b) Reduction of poverty among backward castes c) Diversifying livelihood for tribal population d) Promotion of ancillary industry in industrial regions Answer :- d 15. Disguised unemployment generally means a) Total productivity of labour is zero b) Average productivity of labour is zero c) Marginal productivity of labour is zero d) None of the above Answer :- c 16. Decision making and ______________ are the two important functions of executive of business firms a)Forward planning b)Directing c)Supervising d)Administration Correct answer: (A) 17. ______________ shows the change in quantity demanded as a result of a change in consumers' income a)Price elasticity b)Cross elasticity c)Income elasticity d)None of these Correct answer: (C) 18. The firm charges price in tune with the industry’s price is called a)competitive pricing b)going rate pricing c)tune pricing d)target pricing Correct answer: (B) 19. Which one of the following is not a reason for adopting skimming price strategy a)When the demand of new product is relatively inelastic. b)When there is no close substitutes c)Elasticity of demand is not known d)Product has high price elasticity in the initial stage Correct answer: (D) 20. Information for pricing decisions involves: a)Product information b)Market information c)Information at the micro level d)All of these Correct answer: (D)