Introduction To Micro Economics
- 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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