McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Economics (BA Economics) .
| 101. |
Measurable utility is the postulate of: |
| A. | Neo-Classical school |
| B. | Ordinalist school |
| C. | Behaviourist school |
| D. | Keneysians |
| Answer» A. Neo-Classical school | |
| 102. |
Which of the following is Gossen’s first law: |
| A. | Law of Diminishing Marginal Utility |
| B. | Law of Equi Marginal Utility |
| C. | Law of substitution |
| D. | Law of Diminishing Returns |
| Answer» A. Law of Diminishing Marginal Utility | |
| 103. |
In the case of a free good, the consumer will be in equilibrium when: |
| A. | MU = P |
| B. | MU = 0 |
| C. | TU = 0 |
| D. | TU =1 |
| Answer» B. MU = 0 | |
| 104. |
Change in demand due to a change in the price of related good : |
| A. | Cross demand |
| B. | Price demand |
| C. | Income demand |
| D. | None of these |
| Answer» A. Cross demand | |
| 105. |
The Price and quantity relationship for an inferior good is: |
| A. | Direct |
| B. | Inverse |
| C. | Positive |
| D. | Indirect |
| Answer» B. Inverse | |
| 106. |
In the case of normal goods, the quantity demanded varies inversely with: |
| A. | Price of good |
| B. | Income of the consumer |
| C. | Fashion of the good |
| D. | Savings |
| Answer» A. Price of good | |
| 107. |
Which of the following is a cardinalist approach to demand analysis: |
| A. | Marshallian utility analysis |
| B. | Indifference Curve Analysis |
| C. | Revealed Preference Theory |
| D. | None of these |
| Answer» A. Marshallian utility analysis | |
| 108. |
The convexity of an indifference curve shows: |
| A. | Diminishing MRS |
| B. | Increasing MRS |
| C. | Constant MRS |
| D. | None |
| Answer» A. Diminishing MRS | |
| 109. |
A movement from one point to another along an indifference curve makes the satisfaction: |
| A. | Increasing |
| B. | Decreasing |
| C. | Unaltered |
| D. | None |
| Answer» C. Unaltered | |
| 110. |
In the case of an indifference curve |
| A. | dU/dX>dU/dY |
| B. | dU/dX = dU/dY |
| C. | dU/dX<dU/dY |
| D. | dU/dX≤dU/Dy |
| Answer» B. dU/dX = dU/dY | |
| 111. |
An Indifference Curve to the right of another represents combinations which are: |
| A. | Indifferent |
| B. | Preferable |
| C. | Inferior |
| D. | Superior |
| Answer» B. Preferable | |
| 112. |
As moving from left to right through an indifference curve, the MRS of X for Y |
| A. | Increases |
| B. | Remains the same |
| C. | Decreases |
| D. | Both A and C |
| Answer» C. Decreases | |
| 113. |
The slope of an indifference curve represents: |
| A. | Price ratio of good X and Y |
| B. | MRTS L,K |
| C. | MRSx,y |
| D. | MRS |
| Answer» C. MRSx,y | |
| 114. |
In the case of perfect complementaries, the MRS between goods is: |
| A. | Zero |
| B. | Positive |
| C. | Negative |
| D. | None |
| Answer» A. Zero | |
| 115. |
In a combination of X and Y, if price of Y alone changes, the X intercept will : |
| A. | Rotate upwards |
| B. | Rotate downwards |
| C. | Not be changed |
| D. | Parallel |
| Answer» C. Not be changed | |
| 116. |
At the point of tangency of an indifference curve with a budget line: |
| A. | MRSxy =Px/Py |
| B. | MRSxy>Px/PY |
| C. | MRSxy<Px/PY |
| D. | MRSxy≥Px/PY |
| Answer» A. MRSxy =Px/Py | |
| 117. |
Commodities bought in larger quantities when income rises are called: |
| A. | Normal goods |
| B. | Inferior goods |
| C. | Giffen goods |
| D. | None |
| Answer» A. Normal goods | |
| 118. |
Change in demand due to change in relative price alone is called: |
| A. | Income effect |
| B. | Substitution effect |
| C. | Price effect |
| D. | Ratchet effect |
| Answer» B. Substitution effect | |
| 119. |
Substitution Effect is: |
| A. | Always negative |
| B. | Always positive |
| C. | Seldom negative |
| D. | Zero |
| Answer» A. Always negative | |
| 120. |
If income effect works in the same direction to that of substitution effect, the good is a: |
| A. | Normal good |
| B. | Inferior good |
| C. | Giffen good |
| D. | Superior Good |
| Answer» A. Normal good | |
| 121. |
If income effect works in the direction opposite to that of substitution effect, the good is not: |
| A. | Giffen good |
| B. | Inferior good |
| C. | Normal good |
| D. | Superior Good |
| Answer» C. Normal good | |
| 122. |
Introspection is not the basis of : |
| A. | Marshallian utility analysis |
| B. | Indifference Curve Analysis |
| C. | Revealed Preference Hypothesis |
| D. | Demand Analysis |
| Answer» C. Revealed Preference Hypothesis | |
| 123. |
The ordering of combinations on an indifference curve is: |
| A. | Weak |
| B. | Strong |
| C. | Average |
| D. | None |
| Answer» A. Weak | |
| 124. |
Strong ordering is a distinguishing feature of the theory given by: |
| A. | Marshall |
| B. | Hicks |
| C. | Samuelson |
| D. | Adam Smith |
| Answer» C. Samuelson | |
| 125. |
Father of Economics: |
| A. | Marshall |
| B. | David Ricardo |
| C. | Adam Smith |
| D. | J.M. Keynes |
| Answer» C. Adam Smith | |
| 126. |
The Wealth of Nations is the work of: |
| A. | Marshall |
| B. | J.S. Mill |
| C. | Adam Smith |
| D. | Lionel Robins |
| Answer» C. Adam Smith | |
| 127. |
Indifference Approach is related with: |
| A. | Marshall |
| B. | J.R. Hicks |
| C. | Samuelson |
| D. | Sismondi |
| Answer» B. J.R. Hicks | |
| 128. |
Which one of the following is an example of close substitute: |
| A. | Tea and Coffee |
| B. | Milk and water |
| C. | Bread and Butter |
| D. | Pen and pencil |
| Answer» A. Tea and Coffee | |
| 129. |
The addition to the total revenue by the sale of an additional unit is: |
| A. | Total revenue |
| B. | Average revenue |
| C. | Value added |
| D. | Marginal revenue |
| Answer» D. Marginal revenue | |
| 130. |
Which cost is to be incurred by a firm even if output is zero: |
| A. | Opportunity cost |
| B. | Fixed cost |
| C. | Variable Cost |
| D. | Total cost |
| Answer» B. Fixed cost | |
| 131. |
The marginal utility theory is contributed by: |
| A. | Marshall |
| B. | David Ricardo |
| C. | Adam Smith |
| D. | Samuelson |
| Answer» A. Marshall | |
| 132. |
The factor earning of entrepreneur is: |
| A. | Rent |
| B. | Wage |
| C. | Interest |
| D. | Profit |
| Answer» D. Profit | |
| 133. |
The Scarcity definition of Economics is the contribution of: |
| A. | Samuelson |
| B. | Adam Smith |
| C. | Lionel Robbins |
| D. | Marshall |
| Answer» C. Lionel Robbins | |
| 134. |
Average Revenue is equal to: |
| A. | Price |
| B. | Cost |
| C. | Profit |
| D. | None of these |
| Answer» A. Price | |
| 135. |
Total Revenue is the maximum when Marginal Revenue is ---------- |
| A. | Positive |
| B. | Negative |
| C. | One |
| D. | Zero |
| Answer» D. Zero | |
| 136. |
Market economy is also known as: |
| A. | Socialist economy |
| B. | Capitalist economy |
| C. | Mixed economy |
| D. | Developing economy |
| Answer» B. Capitalist economy | |
| 137. |
For complementary goods, the cross elasticity of demand: |
| A. | Positive |
| B. | Negative |
| C. | Zero |
| D. | None |
| Answer» B. Negative | |
| 138. |
Relation between price of a commodity and demand for another commodity is measured by: |
| A. | Price elasticity |
| B. | Income elasticity |
| C. | Cross elasticity |
| D. | Elasticity of substitution |
| Answer» C. Cross elasticity | |
| 139. |
The demand curve for Giffen’s goods: |
| A. | Vertical |
| B. | Horizontal |
| C. | Negative slope |
| D. | Positive slope |
| Answer» D. Positive slope | |
| 140. |
When Q = f (P), the elasticity coefficient is measured by: |
| A. | ΔQ/ΔP / P/Q |
| B. | ΔP/ΔQ * Q/P |
| C. | ΔQ/ΔP * P/Q |
| D. | P/ΔQ / Q/P |
| Answer» C. ΔQ/ΔP * P/Q | |
| 141. |
Income elasticity of demand for inferior goods is: |
| A. | Negative |
| B. | Positive |
| C. | Zero |
| D. | Unity |
| Answer» A. Negative | |
| 142. |
In the case of luxury goods, the income elasticity of demand will be: |
| A. | Less than unity |
| B. | Unity |
| C. | More than unity |
| D. | All the above |
| Answer» C. More than unity | |
| 143. |
Income elasticity is positive, but less than unity in the case of: |
| A. | Necessity |
| B. | Luxury |
| C. | Inferior |
| D. | Substitutes |
| Answer» A. Necessity | |
| 144. |
The change in demand is due to the change in : |
| A. | Income |
| B. | Own price |
| C. | Prices of related products |
| D. | Expectations |
| Answer» B. Own price | |
| 145. |
Supply curve represents -------- relationship between quantity and price |
| A. | Direct |
| B. | Inverse |
| C. | Either direct or inverse |
| D. | None of the above |
| Answer» A. Direct | |
| 146. |
A market: |
| A. | Necessarily refers to a meeting place between buyer and sellers |
| B. | Does not necessarily refers to a meeting place between buyer and sellers |
| C. | Extends over the entire country |
| D. | Extends over a city |
| Answer» B. Does not necessarily refers to a meeting place between buyer and sellers | |
| 147. |
The market equilibrium for a commodity is determined by: |
| A. | Market demand |
| B. | Market supply |
| C. | Balancing of the forces of demand and supply |
| D. | Any of the above |
| Answer» C. Balancing of the forces of demand and supply | |
| 148. |
A fall in the price of the commodity holding everything else constant results in: |
| A. | Increase in demand |
| B. | Decrease in demand |
| C. | Increase in quantity demanded |
| D. | Decrease in quantity demanded |
| Answer» C. Increase in quantity demanded | |
| 149. |
When the price of the substitute commodity of X falls, the demand for X: |
| A. | Rises |
| B. | Falls |
| C. | Remains unchanged |
| D. | All of the above is possible |
| Answer» B. Falls | |
| 150. |
If the income elasticity of demand is greater than one, then the commodity is: |
| A. | Necessity |
| B. | Luxury |
| C. | Inferior |
| D. | Non-related commodity |
| Answer» A. Necessity | |
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