Introduction To Micro Economics

68 Questions | Total Attempts: 216

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Introduction To Micro Economics - Quiz

Questions and Answers
  • 1. 
    Find the correct match :
    • A. 

      An enquiry into the nature and causes of the wealth of the nation : A.C.Pigou.

    • B. 

      Science which deals with wealth : Alfred Marshall.

    • C. 

      Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses : Robbins.

    • D. 

      The range of our enquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money : Adam Smith.

  • 2. 
    The law of scarcity :
    • A. 

      Does not apply to rich, developed countries.

    • B. 

      Applies only to the less developed countries.

    • C. 

      Implies that consumers wants will be satisfied in a socialistic system.

    • D. 

      Implies that consumers wants will never be completely satisfied.

  • 3. 
    Who expressed the view that aEconomics is neutral between enda?
    • A. 

      Robbins

    • B. 

      Marshall

    • C. 

      Pigou

    • D. 

      Adam Smith

  • 4. 
    Which of the following is the best general definition of the study of Economics?
    • A. 

      Inflation and unemployment in a growing economy.

    • B. 

      Business decision making under foreign competition.

    • C. 

      Individual and social choice in the face of scarcity.

    • D. 

      The best way to invest in the stock market.

  • 5. 
    What implication(s) does resource scarcity have for the satisfaction of wants?
    • A. 

      Not all wants can be satisfied.

    • B. 

      We will never be faced with the need to make choices.

    • C. 

      We must develop ways to decrease our individual wants.

    • D. 

      The discovery of new natural resources is necessary to increase our ability to satisfy wants.

  • 6. 
    Rational decision making requires that :
    • A. 

      One's choices be arrived at logically and without error.

    • B. 

      One's choices be consistent with one's goals.

    • C. 

      One's choices never vary.

    • D. 

      One makes choices that do not involve trade-offs.

  • 7. 
    Economics according to Lionel Robbins is a
    • A. 

      Normative science

    • B. 

      Applied science

    • C. 

      Positive science

    • D. 

      Experimental science

  • 8. 
    Which of the following is a normative statement?
    • A. 

      Planned economies allocate resources via government departments.

    • B. 

      Most transitional economies have experienced problems of falling output and rising prices over the past decade.

    • C. 

      There is a greater degree of consumer sovereignty in market economies than planned economies.

    • D. 

      Reducing inequality should be a major priority for mixed economies.

  • 9. 
    Macroeconomics is also called _______________ economics.
    • A. 

      Applied

    • B. 

      Aggregate

    • C. 

      Experimental

    • D. 

      None of the above

  • 10. 
    An example of 'positive' economic analysis would be :
    • A. 

      An analysis of the relationship between the price of food and the quantity purchased.

    • B. 

      Determining how much income each person should be guaranteed.

    • C. 

      Determining the 'fair' price for food.

    • D. 

      Deciding how to distribute the output of the economy.

  • 11. 
    Identify the correct statement :
    • A. 

      In deductive method logic proceeds from the particular to the general.

    • B. 

      Micro and Macro-Economics are interdependent.

    • C. 

      In a capitalist economy, the economic problems are solved by Planning Commission.

    • D. 

      Higher the prices lower is the quantity demanded of a product is a normative statement.

  • 12. 
    A study of how increases in the corporate income tax rate will affect the national unemployment rate is an example of
    • A. 

      Macro-economics.

    • B. 

      Descriptive economics.

    • C. 

      Micro-economics.

    • D. 

      Normative economics.

  • 13. 
    Which of the following does not suggest a macro approach for India?  
    • A. 

      Determining the GNP of India.

    • B. 

      Finding the causes of failure of X and co.

    • C. 

      Identifying the causes of inflation in India.

    • D. 

      Analyse the causes of failure of industry in providing large scale employment.

  • 14. 
    Economic goods are considered scarce resources because they     
    • A. 

      Cannot be increased in quantity.

    • B. 

      Do not exist in adequate quantity to satisfy social requirements.

    • C. 

      Are of primary importance in satisfying social requirements.

    • D. 

      Are limited to man made goods.

  • 15. 
    From the national point of view which of the following indicates micro approach?    
    • A. 

      Per capita income of India.

    • B. 

      Underemployment in agricultural sector.

    • C. 

      Lock out in TELCO.

    • D. 

      Total savings in India.

  • 16. 
    In a free market economy the allocation or resources is determined by
    • A. 

      Votes taken by consumers

    • B. 

      A central planning authority.

    • C. 

      Consumer preference.

    • D. 

      The level of profits of firms.

  • 17. 
    A capitalist economy uses _________ as the principal means of allocating resources.
    • A. 

      Demand

    • B. 

      Supply

    • C. 

      Efficiency

    • D. 

      Prices

  • 18. 
    In a free market economy, when consumers increase their purchase of a good and the level of ____________  exceeds_________then prices tend to rise.  
    • A. 

      Demand, supply

    • B. 

      Supply, demand

    • C. 

      Prices, demand

    • D. 

      Profits, supply.

  • 19. 
    Which of the following would be considered a disadvantage of allocating resources using a market system?
    • A. 

      Income will tend to be unevenly distributed.

    • B. 

      Significant unemployment may occur.

    • C. 

      It cannot prevent the wastage of scarce economic resources.

    • D. 

      Profits will tend to be low.

  • 20. 
    In a mixed economy,
    • A. 

      All economic decisions are taken by the central authority.

    • B. 

      All economic decisions are taken by private entrepreneurs.

    • C. 

      Economic decisions are partly taken by the state and partly by the private entrepreneurs

    • D. 

      None of the above.

  • 21. 
    The central problem in economics is that of  
    • A. 

      Comparing the success of command versus market economies.

    • B. 

      Guaranteering that production occurs in the most efficient manner.

    • C. 

      Guaranteering a minimum level of income for ev^ry citizen.

    • D. 

      Allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied as well as possible.

  • 22. 
    An economy achieves aproductive efficiencya when :
    • A. 

      Resources are employed in their most highly valued uses.

    • B. 

      The best resources are employed.

    • C. 

      The total number of goods produced is greatest.

    • D. 

      Goods and services are produced at least cost and no resources are wasted.

  • 23. 
    If the PPF is linear, i.e., a straight line, which of the following is true?
    • A. 

      As the production of a good increases, the opportunity cost of that good rises.

    • B. 

      As the production of a good increases, the opportunity cost of that good falls.

    • C. 

      Opportunity costs are constant.

    • D. 

      The economy is not at full employment when operating on the PPF.

  • 24. 
    Periods of less than full employment correspond to  
    • A. 

      Points outside the PPF.

    • B. 

      Points inside the PPF.

    • C. 

      Points on the PPF.

    • D. 

      Either points inside or outside the PPF.

  • 25. 
    Which of the following would not result in an rightward shift of the PPF?
    • A. 

      An increase in investment in capital stock.

    • B. 

      A reduction in the labour unemployment rate.

    • C. 

      The discovery of new oil deposits in India.

    • D. 

      An increase in the number of people taking management training courses.

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