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) .
| 51. |
The concept of utility was introduced by |
| A. | marshall |
| B. | hicks and allen |
| C. | geremy bentham |
| D. | gossen |
| Answer» C. geremy bentham | |
| 52. |
Cardinal utility analysis to consumer equilibrium was developed by |
| A. | marshall |
| B. | hicks and allen |
| C. | geremy bentham |
| D. | gossen |
| Answer» A. marshall | |
| 53. |
MC at any level of output is given by |
| A. | slope of tc curve |
| B. | slope of tvc curve |
| C. | slope of either tc or tvc |
| D. | slope of tfc |
| Answer» C. slope of either tc or tvc | |
| 54. |
If a firm’s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which one among the following is the marginal cost of producing the 7th unit |
| A. | 46 |
| B. | 2 |
| C. | 36 |
| D. | 42 |
| Answer» A. 46 | |
| 55. |
The cost that cannot be recovered once spent |
| A. | accounting cost |
| B. | fixed cost |
| C. | implicit cost |
| D. | sunk cost |
| Answer» B. fixed cost | |
| 56. |
The saucer-type of modern Short run Average Variable Cost (SAVC) represents |
| A. | excess capacity |
| B. | managerial costs |
| C. | load factors |
| D. | reserve capacity |
| Answer» B. managerial costs | |
| 57. |
The Long run Average Cost curve (LAC) in modern cost theory is roughly |
| A. | u shaped |
| B. | saucer shaped |
| C. | l shaped |
| D. | rectangular hyperbola |
| Answer» D. rectangular hyperbola | |
| 58. |
Under increasing returns to scale, which of the following is the nature of the long run average cost curve? |
| A. | downward sloping |
| B. | upward rising |
| C. | parallel to output axis |
| D. | identical to short run average cost curve |
| Answer» D. identical to short run average cost curve | |
| 59. |
Which of the following has a U shape? |
| A. | average fixed cost curve |
| B. | total cost curve |
| C. | average variable cost curve |
| D. | total variable cost curve |
| Answer» C. average variable cost curve | |
| 60. |
AFC curve will always be |
| A. | rectangular hyperbola |
| B. | u shaped |
| C. | horizontal |
| D. | downward sloping |
| Answer» D. downward sloping | |
| 61. |
Implicit cost of a factor of production is determined by its |
| A. | sunk cost |
| B. | variable cost |
| C. | fixed cost |
| D. | opportunity cost |
| Answer» A. sunk cost | |
| 62. |
Economic cost include both |
| A. | explicit cost and implicit cost |
| B. | fixed cost and variable cost |
| C. | explicit cost and prime cost |
| D. | money cost and sunk cost |
| Answer» A. explicit cost and implicit cost | |
| 63. |
The U shape of MC curve reflects |
| A. | economies of scale |
| B. | law of increasing returns |
| C. | reserve capacity |
| D. | law of variable proportion |
| Answer» D. law of variable proportion | |
| 64. |
Envelope curve is |
| A. | long run marginal cost curve |
| B. | long run average cost curve |
| C. | total cost curve |
| D. | none of the above |
| Answer» D. none of the above | |
| 65. |
In long run, which factor of production is fixed? |
| A. | labour |
| B. | capital |
| C. | building |
| D. | none of the above |
| Answer» B. capital | |
| 66. |
The U shape of the average total cost curve reflects |
| A. | ldmu |
| B. | the law of variable proportions |
| C. | consumer’s surplus |
| D. | reserve capacity |
| Answer» A. ldmu | |
| 67. |
The total fixed cost is a |
| A. | horizontal straight line |
| B. | vertical |
| C. | hyperbola |
| D. | u shaped |
| Answer» A. horizontal straight line | |
| 68. |
When AC minimum in short run |
| A. | ac < mc |
| B. | ac > mc |
| C. | ac = mc |
| D. | any of above is possible |
| Answer» B. ac > mc | |
| 69. |
The shape of TVC and TC are |
| A. | rectangular hyperbola |
| B. | inverse ‘s’ shape |
| C. | horizontal straight line |
| D. | l shaped |
| Answer» A. rectangular hyperbola | |
| 70. |
The cost expressed not in terms of money but in terms of efforts of workers undergone for making the commodity |
| A. | opportunity cost |
| B. | real cost |
| C. | sacrifice cost |
| D. | implicit cost |
| Answer» C. sacrifice cost | |
| 71. |
The MC curve cuts the AC curve at |
| A. | the maximum point |
| B. | the initial point |
| C. | the minimum point |
| D. | any point |
| Answer» B. the initial point | |
| 72. |
The minimum point of ATC is at ...................position of the minimum point of AVC |
| A. | right |
| B. | left |
| C. | same |
| D. | all of above can be |
| Answer» B. left | |
| 73. |
If the long run cost curve shifts down wards it is an indication of |
| A. | technological progress |
| B. | lower factor prices |
| C. | both of these |
| D. | reserve capacity |
| Answer» C. both of these | |
| 74. |
The U shape of the LAC reflects |
| A. | law of variable proportions |
| B. | laws of returns to scale |
| C. | reserve capacity |
| D. | none of these |
| Answer» A. law of variable proportions | |
| 75. |
A production possibility curve is concave to the point of origin because of |
| A. | increasing marginal rate of transformation (mrt) |
| B. | increasing marginal opportunity cost (moc) |
| C. | both of the above |
| D. | decreasing marginal rate of transformation |
| Answer» C. both of the above | |
| 76. |
The deductive method is also called |
| A. | abstract |
| B. | analytical |
| C. | priori method |
| D. | all the above |
| Answer» D. all the above | |
| 77. |
An Essay on the Nature and Significance of Economic Science was written by |
| A. | adamsmith |
| B. | alfred marshall |
| C. | lord robbins |
| D. | samuelson |
| Answer» C. lord robbins | |
| 78. |
The word ‘Micro Economics and Macro Economics’ were first coined by |
| A. | adamsmith |
| B. | ragnar frisch |
| C. | alfred marshall |
| D. | lord robbins |
| Answer» B. ragnar frisch | |
| 79. |
Excess demand for money, according to Say’s law in the Economy: |
| A. | Is greater |
| B. | Is very less |
| C. | Is equal to zero |
| D. | There is no relationship between excess demand for money and Say’s Law |
| Answer» D. There is no relationship between excess demand for money and Say’s Law | |
| 80. |
Which of the following is not an assumption of classical theory? |
| A. | Price flexibility |
| B. | Unemployment |
| C. | Say’s law |
| D. | Neutrality of money |
| Answer» B. Unemployment | |
| 81. |
In classical theory the equality between saving and investment is brought about by: |
| A. | Rate of interest |
| B. | Income |
| C. | Consumption |
| D. | Multiplier |
| Answer» A. Rate of interest | |
| 82. |
The normal condition of a capitalist economy in classical theory is: |
| A. | Underemployment |
| B. | Full employment |
| C. | General unemployment |
| D. | Frictional unemployment |
| Answer» B. Full employment | |
| 83. |
The classical economists believed that the demand for labour is a function of: |
| A. | Total money wages |
| B. | Money wage rate |
| C. | Total real wages |
| D. | Real wage rate |
| Answer» D. Real wage rate | |
| 84. |
In classical theory of employment, there is the possibility of: |
| A. | Voluntary unemployment |
| B. | No unemployment |
| C. | Involuntary unemployment |
| D. | Disguised unemployment |
| Answer» A. Voluntary unemployment | |
| 85. |
The idea that a general cut in wages will finally lead to a state of full employment was suggested by : |
| A. | Keynes |
| B. | Marshall |
| C. | J.B.Say |
| D. | A.C.Pigou |
| Answer» D. A.C.Pigou | |
| 86. |
The aggregate production function implied under classical theory is : |
| A. | Long run |
| B. | Short run |
| C. | No time element |
| D. | None of the above |
| Answer» A. Long run | |
| 87. |
In the Cambridge equation of M = kPR, the value of k is: |
| A. | M/V |
| B. | 1/V |
| C. | V in Fisher’s equation |
| D. | None of these |
| Answer» B. 1/V | |
| 88. |
As a result of an increase in capital, ceteris paribus, ------ the marginal productivity of labour: |
| A. | Remains constant |
| B. | Increase |
| C. | decreases |
| D. | none of these |
| Answer» B. Increase | |
| 89. |
In the classical theory, one of the following is an important assumption: |
| A. | Wages and prices are inflexible |
| B. | There is full employment |
| C. | Agents are price setters |
| D. | Adjustment is through quantity. |
| Answer» B. There is full employment | |
| 90. |
In the Fisher’s extended equation of exchange MI VI represents: |
| A. | Credit money |
| B. | Primary money |
| C. | Both primary and credit money |
| D. | General price level |
| Answer» A. Credit money | |
| 91. |
In Fisher’s transaction velocity model, one of the following is not an assumption: |
| A. | Velocity of circulation of money is constant |
| B. | The volume of transactions is constant |
| C. | Full employment |
| D. | P is considered as an active factor |
| Answer» D. P is considered as an active factor | |
| 92. |
The cash balance equation M = KPO was given by: |
| A. | Keynes |
| B. | Pigou |
| C. | Robertson |
| D. | Marshall |
| Answer» D. Marshall | |
| 93. |
“Supply creates its own demand “is a law of: |
| A. | Investment |
| B. | Inflation |
| C. | Consumption |
| D. | Market |
| Answer» D. Market | |
| 94. |
In the equation MV+ MI VI = PT, ‘M ‘denotes: |
| A. | Velocity of money |
| B. | Money in circulation |
| C. | Bank deposit |
| D. | None of these |
| Answer» B. Money in circulation | |
| 95. |
I classical demand for money, the relationship between money supply and price level is: |
| A. | Proportional |
| B. | Non-proportional |
| C. | Neither proportional nor non-proportional |
| D. | None of these |
| Answer» B. Non-proportional | |
| 96. |
As per classical theory saving is: |
| A. | An increasing function of rate of interest |
| B. | Decreasing function of rate of interest |
| C. | Decreasing function of level of income |
| D. | None of these |
| Answer» A. An increasing function of rate of interest | |
| 97. |
The Cambridge version of the quantity theory of money was developed by: |
| A. | Fisher |
| B. | Alfred Marshall |
| C. | Pigou |
| D. | Keynes |
| Answer» C. Pigou | |
| 98. |
In classical system which of the following keeps the economy at full employment: |
| A. | Level of saving |
| B. | Increase in money supply |
| C. | Adjustment in investment |
| D. | Adjustment in money wages |
| Answer» D. Adjustment in money wages | |
| 99. |
In Fisher’s equation of exchange MV=PT, the variation of which produces a proportional change in price: |
| A. | M |
| B. | V |
| C. | P |
| D. | T |
| Answer» A. M | |
| 100. |
According to classical economists, variations in savings are due to: |
| A. | Level of investment |
| B. | Rate of interest |
| C. | Level of employment |
| D. | None of the above |
| Answer» B. Rate of interest | |
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