McqMate
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 |
51. |
The firm is in equilibrium in the factor market when it employs units of labour upto the point where |
A. | The marginal revenue product of labour is equal to its marginal cost |
B. | The marginal revenue product of labour is more than its marginal cost |
C. | The marginal revenue product of labour is less than its marginal cost |
D. | none |
Answer» A. The marginal revenue product of labour is equal to its marginal cost |
52. |
A market system, where there is only one seller is known as |
A. | Monopoly |
B. | Monopolistic competition |
C. | Oligopoly |
D. | Monopsony |
Answer» A. Monopoly |
53. |
Equilibrium in the factor market achieved at the factor price and factor quantity is given by |
A. | The intersection of the factor demand curve and the factor supply curve |
B. | The sum total of the elasticities of demand and supply |
C. | The product of the elasticities of demand and supply |
D. | none |
Answer» A. The intersection of the factor demand curve and the factor supply curve |
54. |
Monopsony means |
A. | A single seller |
B. | A single buyer |
C. | Large number of buyers |
D. | None of the above |
Answer» B. A single buyer |
55. |
Monopoly means |
A. | A single seller |
B. | A single buyer |
C. | Large number of buyers |
D. | None of the above |
Answer» A. A single seller |
56. |
Factor prices are determined in the factor market under the forces of |
A. | Marginal productivity |
B. | Elasticity of demand |
C. | Elasticity of supply |
D. | Demand and supply |
Answer» D. Demand and supply |
57. |
The labour market equilibrium determines the wage rate and |
A. | Investment |
B. | Employment |
C. | Savings |
D. | Profits |
Answer» B. Employment |
58. |
Equilibrium conditions for factor market is |
A. | Demand for factors is equal to supply of factors |
B. | Demand for factors is less than supply of factors |
C. | Demand for factors is more than supply of factors |
D. | None of the above |
Answer» A. Demand for factors is equal to supply of factors |
59. |
Demand for factor of production is |
A. | Supplementary demand |
B. | Intermediate goods |
C. | Derived demand |
D. | Complementary demand |
Answer» C. Derived demand |
60. |
Factor market will be in equilibrium when |
A. | Demand for factors is less than its supply |
B. | Demand for factors is equal to supply of factors |
C. | Supply of factors is less than for it |
D. | All of the above |
Answer» B. Demand for factors is equal to supply of factors |
61. |
Which of the following is not a factor of production? |
A. | Land |
B. | Labour |
C. | Money |
D. | Capital |
Answer» C. Money |
62. |
A monopolist maximizes profit by producing the quantity at which |
A. | marginal revenue equals marginal cost. |
B. | marginal revenue equals price. |
C. | marginal cost equals price. |
D. | marginal cost equals demand. |
Answer» A. marginal revenue equals marginal cost. |
63. |
The supply of a good refers to: |
A. | Stock available for sale |
B. | Total stock in the warehouse |
C. | Actual Production of the good |
D. | Quantity of the good offered for sale at a particular price per unit of time |
Answer» D. Quantity of the good offered for sale at a particular price per unit of time |
64. |
The cost of one thing in terms of the alternative given up is called: |
A. | Real cost |
B. | Opportunity cost |
C. | Production cost |
D. | Physical cost |
Answer» B. Opportunity cost |
65. |
The producer’s demand for a factor of production is governed by the ___ of that factor. |
A. | Price |
B. | Marginal Productivity |
C. | Availability |
D. | Profitability |
Answer» B. Marginal Productivity |
66. |
Under conditions of perfect competition in the product market: |
A. | MRP = VMP |
B. | MRP > VMP |
C. | VMP > MRP |
D. | None of the above |
Answer» A. MRP = VMP |
67. |
In a perfectly competitive market a firm in the long run will be in equilibrium when: |
A. | AC = MC |
B. | AR = MR |
C. | MR = MC |
D. | Price = AR = MR= AC= MC |
Answer» D. Price = AR = MR= AC= MC |
68. |
Which of the following is a characteristic of capital as a factor of production? |
A. | It is fixed in supply |
B. | It never depreciates |
C. | It is a passive factor of production |
D. | It is an active factor of production |
Answer» C. It is a passive factor of production |
69. |
On which law of consumption the concept of consumer’s surplus is based? |
A. | Engel’s law |
B. | Law of demand |
C. | First law of Gossen |
D. | Second law of Gossen |
Answer» C. First law of Gossen |
70. |
The relation that the law of demand for factor defines is. |
A. | Income and quantity demanded of a factor |
B. | Price and quantity of a factor |
C. | Income and price of a factor |
D. | Quantity demanded and quantity supplied of a factor |
Answer» B. Price and quantity of a factor |
71. |
Union leaders are in a better position to bargain for higher wages if demand for labour is |
A. | Elastic |
B. | Inelastic |
C. | Very large |
D. | Permanent |
Answer» B. Inelastic |
72. |
Sometimes the supply curve of labour ends: |
A. | Downward |
B. | Upward |
C. | Backward |
D. | Firstly upward and then downward |
Answer» C. Backward |
73. |
A firm maximizes profit if: |
A. | MRP = Wage rate |
B. | MRP is rising |
C. | MRP = ARP |
D. | None of these |
Answer» A. MRP = Wage rate |
74. |
The opportunity cost of a machine which can produce only one product is: |
A. | Low |
B. | Infinite |
C. | High |
D. | Medium |
Answer» A. Low |
75. |
When price is below equilibrium level, there will be: |
A. | Surplus commodity in the market |
B. | Supply curve will shift |
C. | Demand curve will shift |
D. | Shortage of commodity in the market |
Answer» D. Shortage of commodity in the market |
76. |
If equilibrium price rises but equilibrium quantity remains unchanged, the cause is: |
A. | Supply and demand both decrease equally |
B. | Supply and demand both increase equally |
C. | Supply decreases and demand increases |
D. | Supply increases and demand decreases |
Answer» C. Supply decreases and demand increases |
77. |
A decrease in demand causes the equilibrium price to: |
A. | Rise |
B. | Fall |
C. | Remain constant |
D. | Indeterminate |
Answer» B. Fall |
78. |
Price of a product is determined in a free market: |
A. | By demand for the product |
B. | By supply of the product |
C. | By both demand and supply |
D. | By the government |
Answer» C. By both demand and supply |
79. |
In market equilibrium, supply is vertical line. The downward sloping demand curve shifts to the rights. Then, |
A. | Price will rise |
B. | Quantity rises |
C. | Price remains same |
D. | Price will fall |
Answer» A. Price will rise |
80. |
A rise in supply and demand in equal proportion will result in: |
A. | Increase in equilibrium price and decrease in equilibrium quantity |
B. | Decrease in equilibrium price and increase in equilibrium quantity |
C. | No change in equilibrium price and increase in equilibrium quantity |
D. | Increase in equilibrium price and no change in equilibrium quantity |
Answer» C. No change in equilibrium price and increase in equilibrium quantity |
81. |
Every factor of production gets reward equal to: |
A. | Value of average product |
B. | Value of marginal product |
C. | Value of total product |
D. | Total revenue |
Answer» B. Value of marginal product |
82. |
Under perfect competition, demand for a factor is its: |
A. | MRP curve |
B. | ARP curve |
C. | TRP curve |
D. | TR – TC |
Answer» A. MRP curve |
83. |
We should employ units of a factor to a point where: |
A. | MR is negative |
B. | MP is equal to price of the factor |
C. | MP is positive |
D. | MP is rising |
Answer» B. MP is equal to price of the factor |
84. |
If marginal product of labour rises because of new technology: |
A. | Wages will rise |
B. | Wages will fall |
C. | Wages will be unaffected |
D. | May rise or fall |
Answer» A. Wages will rise |
85. |
Increasing the minimum wage for workers will: |
A. | Sole the unemployment problem |
B. | Result in scarcity of workers |
C. | Cause a substitution of capital for labour |
D. | Decrease the MP of those workers |
Answer» C. Cause a substitution of capital for labour |
86. |
The price of capital is |
A. | money |
B. | Interest |
C. | profits |
D. | wages |
Answer» B. Interest |
87. |
If MRP > Price of the factor: firm should hire |
A. | less factors |
B. | more factors |
C. | the same factors |
D. | All of the above |
Answer» B. more factors |
88. |
If MRP = Price of the factor: firm should _______ at the unit of factor |
A. | less factors |
B. | more factors |
C. | stop hiring more |
D. | All of the above |
Answer» C. stop hiring more |
89. |
If MRP < P of the factor, firm should hire |
A. | less factors |
B. | more factors |
C. | the same factors |
D. | All of the above |
Answer» A. less factors |
90. |
The labor market equilibrium determines the wage rate and |
A. | market |
B. | employment |
C. | money |
D. | interest |
Answer» B. employment |
91. |
Union leaders are in a worse position to bargain for higher wages if demand for labour is |
A. | perfectly Elastic |
B. | perfectly Inelastic |
C. | Very large |
D. | Permanent |
Answer» A. perfectly Elastic |
92. |
The concept of social optimum was introduced in Welfare Economics by |
A. | Vilfredo Pareto |
B. | A. C. Pigou |
C. | Adam Smith |
D. | A. Marshall |
Answer» A. Vilfredo Pareto |
93. |
An ethical or value judgement must be made in order to derive the |
A. | Transformation curve |
B. | Grand utility possibly curve |
C. | Consumption contract curve |
D. | Social welfare function |
Answer» D. Social welfare function |
94. |
According to Kaldor-Hicks compensation criteria, the proposed change will increase the social welfare if |
A. | The gains are equal to the losses |
B. | The gains are greater than the losses |
C. | The losses are greater than the gains |
D. | None of the above |
Answer» B. The gains are greater than the losses |
95. |
The concept of Social Welfare function was firstly introduced by |
A. | Pareto |
B. | Kaldor |
C. | Bergson |
D. | Samuelson |
Answer» C. Bergson |
96. |
The first condition of which economist states that welfare is said to increase when national income increases |
A. | Kaldor-Hicks |
B. | Adam Smith |
C. | A. C. Pigou |
D. | Prof . Bergson |
Answer» C. A. C. Pigou |
97. |
Compensation criterion principle is associated with the name of |
A. | Kaldor-Hicks |
B. | Vilfredo Pareto |
C. | A. C. Pigou |
D. | Prof . Bergson |
Answer» A. Kaldor-Hicks |
98. |
Who proclaimed the ‘doctrine of invisible hand’? |
A. | Adam Smith |
B. | A. C. Pigou |
C. | Kaldor-Hicks |
D. | V. Pareto |
Answer» A. Adam Smith |
99. |
Social Welfare function is a function of |
A. | All the individuals constituting the society |
B. | All consumers excluding producers |
C. | Only sample of individuals in society |
D. | None of the above |
Answer» A. All the individuals constituting the society |
100. |
“Social welfare increases when transfer of real income from the rich to poor increases” is a statement given by |
A. | Kaldor-Hicks |
B. | A. C. Pigou |
C. | Pareto |
D. | Prof. Bergson |
Answer» B. A. C. Pigou |
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