McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Economics (CBCS) .
| 1. |
Of ‘real wages’ and ‘money wages’ |
| A. | The former is a wider concept than the latter |
| B. | The latter is a wider concept than the former |
| C. | Both concept mean the same thing |
| D. | All of the above |
| Answer» A. The former is a wider concept than the latter | |
| 2. |
The concept of Quasi-rent mean |
| A. | The rent to the workers |
| B. | The rent shared by the Landlord and workers |
| C. | The interest paid to the entrepreneur |
| D. | The return to a factor of production which is fixed in supply in the short period |
| Answer» D. The return to a factor of production which is fixed in supply in the short period | |
| 3. |
The return to a factor of production which is fixed in supply in the short period is called |
| A. | Scarcity rent |
| B. | Economic rent |
| C. | Quasi-rent |
| D. | Contractual rent |
| Answer» C. Quasi-rent | |
| 4. |
The marginal productivity theory of distribution was firstly formulated in its complete form by |
| A. | Adam Smith |
| B. | J. S. Mill |
| C. | J. B. Clark |
| D. | David Ricardo |
| Answer» C. J. B. Clark | |
| 5. |
The ‘iron law of wages’ is |
| A. | The wage-fund theory |
| B. | The marginal productivity theory of wages |
| C. | Collective bargaining |
| D. | The subsistence theory of wages |
| Answer» D. The subsistence theory of wages | |
| 6. |
According to Prof Knight, profit is the reward for |
| A. | Innovation |
| B. | Capital |
| C. | Foreseeable risks |
| D. | Uncertainty bearing |
| Answer» D. Uncertainty bearing | |
| 7. |
The uncertainty-bearing theory of profit was propounded by |
| A. | F. H. Knight |
| B. | F. B. Hawley |
| C. | P. A. Samuelson |
| D. | Joseph Schumpeter |
| Answer» A. F. H. Knight | |
| 8. |
Which of the following is not included in the assumptions of Clark’s marginal productivity of distribution |
| A. | Perfect competition |
| B. | Constant population |
| C. | Constant amount of capital |
| D. | Labour is heterogeneous |
| Answer» D. Labour is heterogeneous | |
| 9. |
Marginal productivity theory is also called |
| A. | Real theory |
| B. | Classical theory |
| C. | Monetary theory |
| D. | None of the above |
| Answer» A. Real theory | |
| 10. |
Subsistence theory of wages was used by |
| A. | Karl Marx |
| B. | Robinson |
| C. | J. S. Mill |
| D. | David Ricardo |
| Answer» D. David Ricardo | |
| 11. |
Profit is also known as |
| A. | Contractual rent |
| B. | Residual income |
| C. | Net income |
| D. | None of the above |
| Answer» B. Residual income | |
| 12. |
Changes in the rate of interest affect the amount of money held for |
| A. | transaction motive |
| B. | precautionary motive |
| C. | speculative motive |
| D. | normal motive |
| Answer» C. speculative motive | |
| 13. |
The marginal productivity theory of distribution is associated with |
| A. | Adam Smith |
| B. | Lionel Robbins |
| C. | J. B. Clark |
| D. | Bergson |
| Answer» C. J. B. Clark | |
| 14. |
Who has contributed the modem theory of interest rate determination? |
| A. | Paul A. Samuelson |
| B. | Gunnar Myrdal |
| C. | Knut Wicksell |
| D. | J.R. Hicks |
| Answer» D. J.R. Hicks | |
| 15. |
Whose name is associated with the “Uncertainty-bearing theory of profit”? |
| A. | J. Schumpeter |
| B. | F.H. Knight |
| C. | J.B. Clark |
| D. | F.W. Watker |
| Answer» B. F.H. Knight | |
| 16. |
Who has sought to measure Consumer’s Surplus with the help of indifference curve technique? |
| A. | Edgeworth |
| B. | Alfred Marshall |
| C. | J.R. Hick |
| D. | Pareto |
| Answer» C. J.R. Hick | |
| 17. |
Which among the following is NOT an assumption of Pareto optimality? |
| A. | Every consumer wishes to maximize his level of satisfaction. |
| B. | All the factors of production are used in the production of every commodity. |
| C. | Conditions of perfect competition exist making all the factors of production perfectly mobile |
| D. | The concept of utility is cardinal and cardinal utility function of every consumer is given. |
| Answer» D. The concept of utility is cardinal and cardinal utility function of every consumer is given. | |
| 18. |
When a firm’s average revenue is equal to its average cost, it gets ________. |
| A. | Sub normal profit |
| B. | Normal profit |
| C. | Abnormal profit |
| D. | Super profit |
| Answer» B. Normal profit | |
| 19. |
Given the price, if the cost of production increases because of higher price of raw materials, the supply |
| A. | Decrease |
| B. | Increase |
| C. | Remains the same |
| D. | Any of the above |
| Answer» A. Decrease | |
| 20. |
Under __________________, price is determined by the interaction of total demand and total supply in the market. |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Imperfect competition |
| D. | Monopolistic Competition |
| Answer» A. Perfect competition | |
| 21. |
Standard of living of workers depends upon their |
| A. | Nominal wages |
| B. | Real wages |
| C. | Average product |
| D. | Govt. policy |
| Answer» B. Real wages | |
| 22. |
Under Marginal productivity Theory, reward for labour is determined by |
| A. | Owner |
| B. | Labour |
| C. | Government |
| D. | Marginal Product |
| Answer» D. Marginal Product | |
| 23. |
The economist Ricardo argued that prices were _____ because land rents were _______ |
| A. | High, High |
| B. | Low, Low |
| C. | Low, High |
| D. | High, Low |
| Answer» D. High, Low | |
| 24. |
As for the cost of production of an individual farmer, the rent paid by him |
| A. | Enters into the price of his product |
| B. | None of these |
| C. | Does not enter into price of his product |
| D. | Is unjustified |
| Answer» A. Enters into the price of his product | |
| 25. |
He presented a theory of rent |
| A. | Malthus |
| B. | Prof. Knight |
| C. | Ricardo |
| D. | Marshall |
| Answer» C. Ricardo | |
| 26. |
The following affect rent EXCEPT |
| A. | Better location |
| B. | Fertility of land |
| C. | Cleverness of landlords |
| D. | Scarcity of land |
| Answer» C. Cleverness of landlords | |
| 27. |
These are kinds of rent EXCEPT |
| A. | Differential rent |
| B. | Scarcity rent |
| C. | Mobility rent |
| D. | Location rent |
| Answer» C. Mobility rent | |
| 28. |
This is capital: |
| A. | Money |
| B. | Forests |
| C. | Machinery |
| D. | Trademarks |
| Answer» C. Machinery | |
| 29. |
According to Keynes interest is a payment for |
| A. | Consumer's preference |
| B. | Producer's preference |
| C. | Liquidity preference |
| D. | State Bank's preference |
| Answer» C. Liquidity preference | |
| 30. |
Interest is paid because |
| A. | Capital is scarce |
| B. | Capital is productive |
| C. | Capital is attractive |
| D. | Capital is surplus |
| Answer» A. Capital is scarce | |
| 31. |
With decrease in price of bonds, rate of interest: |
| A. | Decreases |
| B. | Increases |
| C. | Does not change |
| D. | None of the above |
| Answer» B. Increases | |
| 32. |
Every factor of production gets reward equal to its: |
| A. | Cost |
| B. | Marginal product |
| C. | Price |
| D. | Increasing return |
| Answer» B. Marginal product | |
| 33. |
According to Keynes, interest is a payment for: |
| A. | Use of durable goods |
| B. | Use of capital |
| C. | Use of money |
| D. | Use of land |
| Answer» C. Use of money | |
| 34. |
In economics capital refers to: |
| A. | Money |
| B. | High quality goods |
| C. | Trade mark |
| D. | Machinery and factories |
| Answer» D. Machinery and factories | |
| 35. |
Professor Knight is famous for his theory of: |
| A. | Rent |
| B. | Profit |
| C. | Population |
| D. | Wages |
| Answer» B. Profit | |
| 36. |
Profits: |
| A. | Are residual payment |
| B. | Are pre-determined |
| C. | Are fixed contract |
| D. | Are always higher than wages |
| Answer» A. Are residual payment | |
| 37. |
Profits: |
| A. | Are lower in the long run than in the short run |
| B. | Can be negative |
| C. | Are less in perfect competition than in monopoly |
| D. | All of the above |
| Answer» D. All of the above | |
| 38. |
Profits arise because an entrepreneur: |
| A. | Prepares plan |
| B. | Innovates |
| C. | Lends money |
| D. | Both (a) and (b |
| Answer» D. Both (a) and (b | |
| 39. |
Gross profit does NOT include: |
| A. | Rent of land owned by the firm |
| B. | Pure profit |
| C. | Interest on capital owned by firm |
| D. | Taxes |
| Answer» D. Taxes | |
| 40. |
Some economists say that profit earner is a kind of: |
| A. | Wage earner |
| B. | Rent receiver |
| C. | Interest receiver |
| D. | Govt. officer |
| Answer» A. Wage earner | |
| 41. |
Risks in the business arise because of: |
| A. | Introduction of the new products |
| B. | Uncertain policy of rival firms |
| C. | Changes in tastes |
| D. | All the above |
| Answer» D. All the above | |
| 42. |
According to Professor Knight risks are of _____ kinds: |
| A. | two |
| B. | three |
| C. | four |
| D. | many |
| Answer» A. two | |
| 43. |
This is not a function of the entrepreneur: |
| A. | Supervise |
| B. | Innovate |
| C. | Lend money |
| D. | Prepare plan |
| Answer» C. Lend money | |
| 44. |
According to Modern Theory of Rent, rent accrues to |
| A. | Land only |
| B. | Any factor |
| C. | Capital only |
| D. | Labour only |
| Answer» B. Any factor | |
| 45. |
An increase in the wage rate: |
| A. | Will usually lead to more people employed |
| B. | Will decrease total earnings of employees if the demand for labour is wage elastic |
| C. | Is illegal in a free market |
| D. | Will cause a shift in the demand for labour |
| Answer» B. Will decrease total earnings of employees if the demand for labour is wage elastic | |
| 46. |
A decrease in the supply of labour is likely to lead to: |
| A. | A lower equilibrium wage and lower quantity of labour employed |
| B. | A lower equilibrium wage and higher quantity of labour employed |
| C. | A higher equilibrium wage and higher quantity of labour employed |
| D. | A higher equilibrium wage and lower quantity of labour employed |
| Answer» D. A higher equilibrium wage and lower quantity of labour employed | |
| 47. |
In order to maximize profits, a firm should produce at the output level for which |
| A. | Average cost is minimised |
| B. | Marginal cost equals marginal revenue |
| C. | marginal cost is minimised |
| D. | All of the above |
| Answer» B. Marginal cost equals marginal revenue | |
| 48. |
A market system where there is only one buyer, is known as. |
| A. | Monopoly |
| B. | Monopolistic competition |
| C. | Monopsony |
| D. | Monopsonistic competition |
| Answer» C. Monopsony | |
| 49. |
The market, where the services of factor of production are bought and sold is, is |
| A. | Product market |
| B. | Factor market |
| C. | Commodity market |
| D. | Monopoly market |
| Answer» B. Factor market | |
| 50. |
Factor prices are determined in the market under forces of |
| A. | Elasticity of demand |
| B. | Elasticity of supply |
| C. | Elasticity and supply |
| D. | None of the above |
| Answer» D. None of the above | |
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