

McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: General Knowledge (GK) , Union Public Service Commission (UPSC) .
551. |
Who among the following has suggested tax on expenditure? |
A. | Dalton |
B. | Kaldor |
C. | Musgrave |
D. | Gautam Mathur |
Answer» B. Kaldor | |
Explanation: Nicholas Kaldor's seminal' work, titled 'An Expenditure Tax,' was brought out in 1955. Kaldor asked to levy a tax on a person's expenditure (consumption), instead of on his income. When expenditure is made the basis of taxation, the problems created by the non- comparability of various types of accruals of wealth resolve themselves. This was his major argument in favour of an expenditure tax. |
552. |
Which of the following is not helpful in controlling money supply? |
A. | Free market policy |
B. | CRR |
C. | Bank Rate |
D. | Change in margin requirement |
Answer» A. Free market policy | |
Explanation: The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate). Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity ratio. In India, the Reserve Bank of India has recently been resorting more to open market operations. |
553. |
Which term is not related to banking? |
A. | C.R.R. |
B. | N .E.E .R. |
C. | S.L.R. |
D. | Fixed Deposits |
Answer» B. N .E.E .R. | |
Explanation: NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country's currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good. |
554. |
The process of curing inflation by reducing money supply is called - |
A. | Cost-push inflation |
B. | Demand-pull inflation |
C. | Disinflation |
D. | Reflation |
Answer» C. Disinflation | |
Explanation: Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over Lime. It is the opposite of reflation. Disinflation occurs when the increase in the "consumer price level" slows down from the previous period when the prices were rising. Disinflation is the reduction in the general price level in the economy but for a very short period of time. Disinflation takes place only when an economy is suffering from recession. |
555. |
Longterm funds in the capital, market can be raised either by borrowing from certain institutions or through - |
A. | issue of note |
B. | taking loan from Government |
C. | issue of securities |
D. | taking loan from foreign institutions |
Answer» C. issue of securities | |
Explanation: Capital markets provide for the buying and selling of long term debt or equity backed securities. When they work well, the capital markets channel the wealth of savers to those who can put it to long term productive use, such as companies or governments making long term investments. Capital Markets allow businesses to raise long-term funds by providing a market for securities, both through debt and equity. |
556. |
"Closed Economy" means : |
A. | no provision for public sector |
B. | no provision for private sector |
C. | economy policy not well defined |
D. | a country having no imports and exports |
Answer» D. a country having no imports and exports | |
Explanation: Closed economy is an economy in which no activity is conducted with outside economies. A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders. |
557. |
Dumping is a form of price discrimination at - |
A. | within industry |
B. | national level |
C. | international level |
D. | local level |
Answer» C. international level | |
Explanation: Dumping is, in general, is a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country. It is regarded as an "unfair" trade practice as it may cause or threat en to cause material injury to the importing markets. |
558. |
Money supply is governed by the - |
A. | Planning Commission |
B. | Finance Commission |
C. | Reserve Bank of India |
D. | Commercial Banks |
Answer» C. Reserve Bank of India | |
Explanation: In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. It is governed and regulated by the central bank of a country. The Reserve Bank of India regulates money supply in India through its several policy rates and reserve ratios. |
559. |
The food stocks that are built up during the years of bumper harvest are called : |
A. | Capital stock |
B. | Buffer stock |
C. | Production stock |
D. | Grain stock |
Answer» B. Buffer stock | |
Explanation: Commercial grain stock is the current amount of harvested grain crops stored domestically, including both on-farni and off- farm storage sites. Buffer stocks are created during periods of normal or bumper harvest to ensure food security during the periods when production is short of normal demand during bad agricultural years. |
560. |
'NABARD' is associated with the development of - |
A. | agricultural sector and rural areas |
B. | heavy Industries |
C. | banking sector |
D. | real estates |
Answer» A. agricultural sector and rural areas | |
Explanation: National Bank for Agriculture and Rural Development (NABARD) has been accredited with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India". It serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas. |
561. |
Government takes 'ways and means advances' from - |
A. | RBI |
B. | IDBI |
C. | SBI |
D. | ICICI |
Answer» A. RBI | |
Explanation: Ways and means advances (WMA) is a mechanism used by Reserve Bank of India (RBI) under its credit policy by which provides to the States banking with it to help them to tide over temporary mismatches in the cash flow of their receipts and payments. These are temporary advances (overdrafts) extended by RBI to the government. Section 17(5) of RBI Act allows RBI to make WMA both to the Central and State governments. It aims to bridge the interval between expenditure and receipts. |
562. |
Kisan Credit Card scheme was introduced in - |
A. | 1991 |
B. | 1996 |
C. | 1998 |
D. | 2000 |
Answer» C. 1998 | |
Explanation: Kisan Credit Card Scheme (KCC) aims at providing adequate and timely support from the banking system to t he farmers for their short-term credit needs for cultivation of crops. This mainly helps farmer for purchase of inputs etc., during the cropping season. Credit card scheme proposed to introduce flexibility to thesystem and improve cost efficiency. It was introduced in August 1998. |
563. |
According to Malthusian theory of population - |
A. | Population increases in geometric ratio, food supply increases in arithmetic ratio |
B. | Population increases in arithmetic ratio, food supply increases in geometric ratio |
C. | Population increases in a harmonic mean, food supply increases in geometric ratio |
D. | Population increases in a harmonic ratio, food supply increases in a arithmetic ratio |
Answer» A. Population increases in geometric ratio, food supply increases in arithmetic ratio | |
Explanation: In his 1798 work, An Essay on the Principle of Population, Malthus ermined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time). |
564. |
Whch of the following curve describes the variation of household expenditure on a particular good with respect to household income? |
A. | Demand curve |
B. | Engel curve |
C. | Great Cats by curve |
D. | Cost curve |
Answer» B. Engel curve | |
Explanation: In microeconomics, an Engel curve describes how household expenditure on a particular good or service varies with household income. The curve is named after the German statistician Ernst Engel (1821-1896). who was the first to investigate this relationship between goods expenditure and income systematically in 1857. |
565. |
Malthusian theory is associated with which of the following? |
A. | Poverty |
B. | Employment |
C. | Diseases |
D. | Population |
Answer» D. Population | |
Explanation: The most well-known theory of population is the Malthusian theory. lt explains the relationship between the growth in food supply and in population. It states that population increases faster than food supply and if unchecked leads to vice or misery. Thomas Robert Malthus enunciated his views about population in his famous book, Essay on the Principle of Population as it affects the Future Improvement of Society, published in 1798. |
566. |
Which of the following relations always holds true? |
A. | Income = Consumption + Investment |
B. | Income = Consumption + Saving |
C. | Saving = Investment |
D. | Income = Consumption + Saving + Investment |
Answer» B. Income = Consumption + Saving | |
Explanation: Consumers do one of two things with their disposable income: They save it or they spend it. So Income = Consumption + Saving. |
567. |
The Keynesian consumption function shows a relation between - |
A. | aggregate consumption and total population. |
B. | aggregate consumption and general price level. |
C. | aggregate consumption and aggregate income |
D. | aggregate consumption and interest rate |
Answer» C. aggregate consumption and aggregate income | |
Explanation: According to Keynesian Theory of consumption, the current real disposable income is the most important determinant of consumption in the short run. It bases consumption on current income. |
568. |
Full employment is a situation where - |
A. | there is no involuntary unemployment |
B. | there is involuntary unemployment |
C. | there is no voluntary unemployment |
D. | there is voluntary unemployment |
Answer» B. there is involuntary unemployment | |
Explanation: Full employment refers to a situation in which every able bodied person who is willing to work at the prevailing rate of wages is, in fact, employed. It implies absence of involuntary unemployment which occurs when those who are willing to work at the going wage rate do not get work. |
569. |
What is needed for creating demand? |
A. | Production |
B. | Price |
C. | Income |
D. | Import |
Answer» A. Production | |
Explanation: Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. So for demand to originate, a product is required first. |
570. |
Which of the statements is correct about India's national income? |
A. | Percentage share of agriculture is higher than services |
B. | Percentage share of industry is higher than agriculture |
C. | Percentage share of services is higher than industry |
D. | Percentage share of services is higher than agriculture and industry put together |
Answer» D. Percentage share of services is higher than agriculture and industry put together | |
Explanation: The services sector has the largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950. Industry accounts for 28% of the GDP and employ 14% of the total workforce. Agriculture and allied sectors like forestry, logging and fishing ac-counted for 15.7% of the GDP in 2009-10. |
571. |
Who among the following is not a classical economist? |
A. | David Ricardo |
B. | John Stuart Mill |
C. | Thomas Malthus |
D. | John Maynard Keynes |
Answer» D. John Maynard Keynes | |
Explanation: Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill. John Maynard Keynes was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics and formed the economic policies of governments. |
572. |
The difference in the value of visible exports and visible imports is called : |
A. | Balance Sheet of items |
B. | Balance of Payments |
C. | Balance of Trade |
D. | Balance of Account |
Answer» C. Balance of Trade | |
Explanation: Balance of Trade refers to the difference between the value of a country's visible imports and visible exports. Also known as the visible balance, it forms part of the balance of payments current account. When the value of visible imports totals more than the value of visible exports, it is known as an adverse balance of trade. |
573. |
Which of the following best indicates economic growth of a Nation? |
A. | Agriculture income |
B. | Per capita income |
C. | Gross industrial production |
D. | Inflation |
Answer» B. Per capita income | |
Explanation: Some economists believe that economic growth is meaningless if it is not distributed across different segments of population. So per capita income is considered by some as a better indicator of economic growth since it measures the average income earned per person in country in a specified year. It serves as an indicator of a country's living standards and how wealth or income isdistributed across the population. However, to a vast majority Gross Domestic Product (GDP) is the most comprehensive measure of over-all economic performance. |
574. |
Indirect taxes by nature are - |
A. | degressive |
B. | regressive |
C. | progressive |
D. | proportional |
Answer» B. regressive | |
Explanation: An indirect tax is one in which the burden can be shifted to others. The tax payer is not the tax bearer. The impact and incidence of indirect taxes are on different persons. Since, most of the indirect taxes are not progressive in nature, individuals may not mind to pay them, In other words, indirect taxes are generally regressive in nature. Therefore, individuals would not be de-motivated to work and to save, which may increase investment. |
575. |
Taxation is a tool of - |
A. | Monetary-policy |
B. | Fiscal policy |
C. | Price policy |
D. | Wage policy |
Answer» B. Fiscal policy | |
Explanation: In economics, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. |
576. |
Which of the following is not viewed as national debt? |
A. | Life Insurance Policies |
B. | Long-term Government Bonds |
C. | National Savings Certificates |
D. | Provident Fund |
Answer» A. Life Insurance Policies | |
Explanation: Government debt (also known as public debt, national debt) is the debt owed by a central government. Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest. But this practice simply reduces government interestcosts rather than truly canceling government debt. Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions. |
577. |
What is Value Added Tax (VAT)? |
A. | A simple, transparent, easy to pay tax imposed on consumers |
B. | A new initiative taken by the Government to increase the tax-burden of high income groups |
C. | A single tax that replaces State taxes like, surcharge, turnover tax, etc. |
D. | A new tax to be imposed on the producers of capital goods |
Answer» C. A single tax that replaces State taxes like, surcharge, turnover tax, etc. | |
Explanation: A value added tax (VAT) is a form of consumption tax. A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. VAT comes under the single tax system based primarily or exclusively on one tax, typically chosen for its special properties. |
578. |
What is referred to as 'Depository Services'? |
A. | A new scheme of fixed deposits |
B. | A method for regulating stock exchanges |
C. | An agency for safe-keeping of securities |
D. | An advisory service to investors |
Answer» C. An agency for safe-keeping of securities | |
Explanation: It is a service offered by a securities depository under which the depository maintains book accounts recording the ownership of securities held on behalf of the depository's participants, for eligible securities. |
579. |
The terms 'Bull' and 'Bear' are associated with - |
A. | Banking |
B. | Foreign Trade |
C. | Stock Market |
D. | Internet Trade |
Answer» C. Stock Market | |
Explanation: The terms 'bull' and 'bear' describe upward and downward trends respectively of the stock market. A bear market refers to a decline in prices, usually for .a period of a few months, in a single security or asset, group of securities or the securities market as a whole. A bull market is when prices are rising. |
580. |
A currency whose exchange rate is influenced by the government is a/an - |
A. | Unmanaged Currency |
B. | Managed Currency |
C. | Scarce Currency |
D. | Surplus Currency |
Answer» B. Managed Currency | |
Explanation: Managed currency refers to currency whose ex-change rate is not determined by the free-market forces of demand and supply but instead by the government's intervention through the country's central bank. |
581. |
Which one of the following statements is correct? |
A. | Good money drives bad money out of circulation |
B. | Bad money drives good money out of circulation |
C. | Good and bad money cannot circulate together |
D. | Cannot say |
Answer» B. Bad money drives good money out of circulation | |
Explanation: One of the most famous axioms in economics is "bad money drives out good." This rule has generally been attributed to Sir Thomas Gresham (1519-1579), an English financier who advised King Edward VI and Queen Elizabeth I with regard to financial matters, and it is popularly known as Gresham's Law. The key prerequisite is that there must be two forms of money or currency (with the same face value) in circulation simultaneously. |
582. |
Devaluation of currency leads to - |
A. | expansion of export trade |
B. | contraction of import trade |
C. | expansion of import substitution |
D. | All of the above |
Answer» D. All of the above | |
Explanation: Devaluation in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged. There are two implications for currency devaluation. First, de-valuation makes a country's exports relatively less expensive for foreigners and second, it makes foreign products relatively more expensive for domestic consumers, discouraging imports. As a result, this may help to reduce a country's trade deficit. Import substitution means promotion of export to replace imports. It is also fallout of devaluation. |
583. |
As a result of higher rate of inflation in India, the U.S. dollar will - |
A. | Depreciate |
B. | Constant |
C. | Negligible |
D. | Appreciate |
Answer» D. Appreciate | |
Explanation: A relatively higher rate of inflation causing rise in prices of the goods in India as compared to those in the USA will make US goods relatively cheaper and the Indian goods expensive. This will lead to rise in imports of US goods into India and the reduction in Indian exports to the USA that will, in turn, cause the foreign exchange rate of dollar in terms of rupees to rise and the price of Indian rupee in terms of dollar will fall. Thus, as a result of higher rate of inflation in India, the US dollar -will appreciate and the Indian rupee will depreciate. |
584. |
Which type of foreign investment is considered as unsafe? |
A. | Foreign Direct Investment (FDI) |
B. | Portfolio Investment |
C. | NRI deposits |
D. | External commercial borrowing |
Answer» B. Portfolio Investment | |
Explanation: Portfolio Investments are considered unsafe. These are investments in the form of a group (portfolio) of assets, including transactions in equity securities, such as common stock, and debt securities, such asbanknotes, bonds, and debentures. Portfolio investments are passive investments, as they do not entail active management or control of the issuing company. Rather, the purpose of the investment is solely financial gain, in contrast to foreign direct investment (FDI), which allows an investor to exercise a certain degree of managerial control over a company. |
585. |
'Mixed economy' refers to - |
A. | the co-existence of heavy, small scale and cottage industries |
B. | the promotion of agriculture as well as cottage industries |
C. | the co-existence of rich as well as poor |
D. | the co-existence of public as well as private sector |
Answer» D. the co-existence of public as well as private sector | |
Explanation: Mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies. |
586. |
Golden Handshake Scheme is associated with - |
A. | Inviting foreign companies |
B. | Private investment in public enterprises |
C. | Establishing joint enterprises |
D. | Voluntary retirement |
Answer» D. Voluntary retirement | |
Explanation: A golden handshake is a clause in an executive employment contract that provides the executive with a significant severance package in the case that the executive loses his or her job through firing, restructuring, or even scheduled retirement. This can be in the form of cash, equity, and other benefits, and is often accompanied by an accelerated vesting of stock options. |
587. |
Stagflation is a situation of - |
A. | stagnation and deflation |
B. | stagnation and recession |
C. | stagnation and inflation |
D. | stagnation and recovery |
Answer» C. stagnation and inflation | |
Explanation: Stagflation is a situation of stagnation in which the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in |
588. |
Devaluation makes import - |
A. | Competitive |
B. | Inelastic |
C. | Cheaper |
D. | Dearer |
Answer» D. Dearer | |
Explanation: Devaluation makes import expensive and discourages it, while the export of a country that devalues becomes cheaper and thereby induces trade partners to import more goods from her. Nations that produce industrial goods on a large scale stand to benefit from devaluation. |
589. |
Gresham's law is related to - |
A. | Consumption and demand |
B. | Supply and demand |
C. | Circulation of money |
D. | Deficit financing |
Answer» C. Circulation of money | |
Explanation: Gresham's law is an observation in economics that "bad money drives out good." More exactly, if coins containing metal of different value have the same value as legal tender, the coins composed of the cheaper metal will be used for payment, while those made of more expensive metal will be hoarded or exported and thus tend to disappear from circulation. Sir Thomas Gresham, financial agent of Queen Elizabeth I, was not the first to recognize this monetary principle, but his elucidation of it in 1558 prompted the economist H.D. Macleod to suggest the term Gresham's law in the 19th century. |
590. |
'PROTECTION' means - |
A. | Restrictions imposed on import trade |
B. | Protection to home industries |
C. | No free exchange of goods and services between two countries |
D. | All of the above |
Answer» D. All of the above | |
Explanation: Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow (according to proponents) "fair competition" between imports and goods and services produced domestically. It refers to policies or doctrines which protect businesses and workers within a country by restricting or regulating trade with foreign nations. |
591. |
Which one of the following does not deal with export promotion? |
A. | Trade Development Authority |
B. | Mineral and Metal Trading Corporation |
C. | Cooperative Marketing Societies |
D. | State Trading Corporation of India |
Answer» C. Cooperative Marketing Societies | |
Explanation: Cooperative marketing is just an extension and application of the philosophy of cooperation in the area of agricultural marketing. It is a process of marketing through a cooperative society, formed for the producers, by the producers. It seeks to eliminate the middlemen between the producer and the consumer, thus getting the maximum price for their produce. |
592. |
Commercialization of agriculture implies - |
A. | cultivation of Limbers |
B. | plantation |
C. | production of crops for sale |
D. | production of crops like wheat or rice |
Answer» C. production of crops for sale | |
Explanation: Commercial agriculture is large- scale production of crops for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat, maize, tea, coffee, sugarcane, cashew, rubber, banana, and cotton are harvested and sold into world markets. |
593. |
Agricultural income tax is a source of revenue to - |
A. | Central Government |
B. | State Government |
C. | Local Administration |
D. | Centre and State Governments |
Answer» B. State Government | |
Explanation: The Constitution of India allocates the taxation of agricultural income to states. Land revenue is a major source of revenue for states in India |
594. |
Agricultural Technology is hard to spread because : |
A. | it has to be adopted to local conditions. |
B. | rural people are not receptive |
C. | farmers are afraid to experiment on land for fear of failure. |
D. | all of the above |
Answer» D. all of the above | |
Explanation: There are many benefits of using technology in agriculture system, but there are also negative aspects. Technology transfer ismost difficult in agriculture because of the differences in natural conditions, such as weather, geographical features, plant ecology, and irrigation, which overlap social and institutional restrictions. When an agricultural technology is stable as a result of the limitations imposed by the existing national conditions and social system, the limits of production are empirically foreseeable. |
595. |
Structural unemployment arises due to : |
A. | deflationary conditions |
B. | heavy industry bias |
C. | shortage of raw materials |
D. | inadequate productive capacity |
Answer» D. inadequate productive capacity | |
Explanation: Structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Structural unemployment is a result of the dynamics of the labor market, such as agricultural workers being displaced by mechanized agriculture. unskilled laborers displaced by both mechanization and automation, or industries with declining employment. Many of these displaced workers are "left behind" due to costs of training and moving (e.g., the cost of selling one's house in a depressed local economy), inefficiencies in the labor markets, such as discrimination or monopoly power, or because they are unsuited for work in growing sectors such as health care or high technology. |
596. |
The demand of a commodity is a direct demand but the demand of a factor of production is called a - |
A. | Crossed demand |
B. | Joint demand |
C. | Derived demand |
D. | Independent demand |
Answer» C. Derived demand | |
Explanation: In the words of McConnell, the demand for factors of production is a derived demand that is derived from the finished goods and services which resources help to produce. While the demand for good is direct demand, demand for factors is derived demand. It is based on the productivity of the factors. |
597. |
Depreciation is loss in value of . |
A. | Final goods |
B. | Machinery |
C. | Capital stock |
D. | Stock of inventory |
Answer» B. Machinery | |
Explanation: The term depreciation represents loss or diminution in the value of an asset consequent upon wear and tear, obsolescence, effluxion of time or permanent fall in market value. Physical deterioration of an asset is caused from movement, strain, friction, erosion etc. For instance, building, machineries, furniture, vehicles, plant etc. The wear and tear is general but primary cause of depreciation. |
598. |
When income increase, consumption also increases : |
A. | in a lower proportion |
B. | in a higher proportion |
C. | in the same proportion |
D. | None of the options |
Answer» A. in a lower proportion | |
Explanation: According to the Keynesian Consumption theory, "men are disposed, as a rule and on average, to increase their consumption as their income increases, but not by as much as the increase in their income." Another feature of consumer behavior is that when income increases, people do not spend their entire incremental income on consumption. They save a part of it for their financial security during the period of =employment, illness, etc. In simple words, the marginal propensity to consume decreases, i.e., house-holds spend a decreasing proportion of marginal income on consumption. |
599. |
The total utility from 9 units of commodity x is 20 and from 10 units is 15. Calculate the marginal utility from 10th unit. |
A. | 0.5 |
B. | 5 |
C. | -0.5 |
D. | -5 |
Answer» D. -5 | |
Explanation: Marginal Utility = Change in Total Utility / Change in number of Units consumed. The first component of the formula is to calculate the change in total utility. The second component of the marginal utility formula is the change in the number of units that have been consumed. |
600. |
A camera in the hands of a professional photographer is a good. |
A. | Free |
B. | Intermediary |
C. | Consumer |
D. | Capital |
Answer» B. Intermediary | |
Explanation: Good is any tangible item, whether produced or found naturally and which is available for exchange. Free good is a good that is so abundant is supply that it has no opportunity cost, for example, air. Intermediary good is a firm's product that is used as an input into the production process of either the same firm or another, |
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