| 1. |
The curve showing the possibilities of production of desired good is known as: |
| A. | indifference curve |
| B. | production possibility curve |
| C. | revealed preference curve |
| D. | none of these |
| Answer» B. production possibility curve | |
| 2. |
Which one of the following definition of Economics is associated with the name of Lionel Robbins? |
| A. | welfare definition |
| B. | scarcity definition |
| C. | growth definition |
| D. | wealth definition |
| Answer» B. scarcity definition | |
| 3. |
A hypothesis is tested by: |
| A. | the realism of its assumptions |
| B. | the lack of realism of its assumptions |
| C. | its ability to predict accurately an outcome that follows logically from the assumptions |
| D. | none of these |
| Answer» C. its ability to predict accurately an outcome that follows logically from the assumptions | |
| 4. |
In a free enterprise economy, the problems of what, how and for whom to produce are solved by : |
| A. | a planning committee |
| B. | the price mechanism |
| C. | the planning commission |
| D. | none of these. |
| Answer» B. the price mechanism | |
| 5. |
Who considered Political Economy as “an enquiry into the nature and causes of the wealth of nations”? |
| A. | adam smith |
| B. | j.b.say |
| C. | marshall |
| D. | keynes |
| Answer» A. adam smith | |
| 6. |
Which of the following definitions of Economics include the economic concept of ‘scales of Preferences’? |
| A. | wealth definition |
| B. | welfare definition |
| C. | scarcity definition |
| D. | growth definition |
| Answer» C. scarcity definition | |
| 7. |
Which of the following embodies a more widely accepted definition of economics? |
| A. | science of material welfare |
| B. | science of wealth |
| C. | a study of mankind in the ordinary business of life |
| D. | science of making choice. |
| Answer» D. science of making choice. | |
| 8. |
The fundamental problem faced by an economy is one of : |
| A. | exchange |
| B. | decision making by the government |
| C. | economic welfare |
| D. | scarcity of resources and multiplicity of wants. |
| Answer» D. scarcity of resources and multiplicity of wants. | |
| 9. |
Production possibilities curve does not show: |
| A. | what to produce |
| B. | how to produce |
| C. | for whom to produce |
| D. | productive potential under conditions of underemployment |
| Answer» D. productive potential under conditions of underemployment | |
| 10. |
State whether Economics is : |
| A. | a positive science only |
| B. | neither a positive science |
| C. | a science but not art |
| D. | a science or an art depending on who uses economics and for what purpose. |
| Answer» D. a science or an art depending on who uses economics and for what purpose. | |
| 11. |
Who of the following emphasized the normative aspect of Economics as a science? |
| A. | the english classical school |
| B. | lionel robbins |
| C. | the german historical school |
| D. | none of these. |
| Answer» C. the german historical school | |
| 12. |
Of the following economists who is considered as master of partial analysis? |
| A. | alfred marshall |
| B. | a.c.pigou |
| C. | j.m.keynes |
| D. | j.s.mill. |
| Answer» A. alfred marshall | |
| 13. |
Which of the following statements has been drawn by inductive method? |
| A. | a consumer will buy from the cheapest market |
| B. | all businessmen wish to buy at low price and sell at high price |
| C. | a private firm will try to maximize its profits |
| D. | the larger the stock of money with a person, the lower is the utility that he |
| Answer» B. all businessmen wish to buy at low price and sell at high price | |
| 14. |
What is true for deductive method? |
| A. | abstract |
| B. | realistic |
| C. | economic conditions assumed to be changing |
| D. | supported by historical school. |
| Answer» A. abstract | |
| 15. |
What is true for inductive method? |
| A. | hypothetical |
| B. | empirical |
| C. | ignores experimentation |
| D. | static |
| Answer» B. empirical | |
| 16. |
Find out the correct statement: |
| A. | prediction of economic models cannot be refuted by empirical evidence |
| B. | models transform verbal expressions in to more scientific expressions |
| C. | models make no assumptions |
| D. | economic models are comprehensive and not partial |
| Answer» B. models transform verbal expressions in to more scientific expressions | |
| 17. |
Micro economic theory studies how a free enterprise economy determines: |
| A. | the price of goods |
| B. | the price of services |
| C. | the price of resources |
| D. | all of these. |
| Answer» A. the price of goods | |
| 18. |
Which aspect of taxation involves normative economics? |
| A. | the incidence of the tax |
| B. | the fairness of the tax |
| C. | the effect of the tax on incentives to work |
| D. | all of the above |
| Answer» B. the fairness of the tax | |
| 19. |
Microeconomics deals primarily with: |
| A. | comparative statics, general equilibrium and positive economics |
| B. | comparative statics, partial equilibrium and normative economics |
| C. | dynamics, partial equilibrium and positive economics |
| D. | comparative statics, partial equilibrium and positive economics. |
| Answer» D. comparative statics, partial equilibrium and positive economics. | |
| 20. |
Which of the following is incorrect? |
| A. | microeconomics is concerned primarily with the problem of what , how and for whom to produce |
| B. | microeconomics is concerned primarily with the economic behavior of individual decision making units when at equilibrium |
| C. | microeconomics is concerned primarily with the time path and processes by which one equilibrium position evolves into another |
| D. | microeconomics is concerned primarily with comparative statics rather than dynamics. |
| Answer» C. microeconomics is concerned primarily with the time path and processes by which one equilibrium position evolves into another | |
| 21. |
Which of the following statements is most closely associated with general equilibrium analysis? |
| A. | everything depends on everything else |
| B. | the equilibrium price of a factor depends on the balancing of the forces of demand and supply for that factor |
| C. | the equilibrium price of a good or service depends on the balancing of the forces of demand and supply for that good or service |
| D. | none of these |
| Answer» A. everything depends on everything else | |
| 22. |
The meaning of the word ‘economic’ is most closely associated with the word: |
| A. | free |
| B. | scarce |
| C. | unlimited |
| D. | unrestricted |
| Answer» B. scarce | |
| 23. |
The market equilibrium for a commodity is determined by |
| A. | the market demand for the commodity |
| B. | the market supply of the commodity |
| C. | the balancing of the forces of demand and supply for the commodity |
| D. | any of these |
| Answer» C. the balancing of the forces of demand and supply for the commodity | |
| 24. |
Microeconomics studies the decision making behavior of: |
| A. | society as a whole |
| B. | an individual or household |
| C. | a group of individuals |
| D. | economy as a whole |
| Answer» B. an individual or household | |
| 25. |
The word micro was first used in Economics by: |
| A. | keynes |
| B. | ragnar frisch |
| C. | j.r.hicks |
| D. | marshall |
| Answer» B. ragnar frisch | |
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