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Question 1. Standard of living of a country can be raised if it increases
  1.    Labour force
  2.    Production
  3.    Money supply
  4.    Exports
Answer: Option B

Question 2. According to Malthus, population increases by progression of which kind?
  1.    Systematic
  2.    Arithmetic
  3.    Geometric
  4.    Automatic
Answer: Option C

Question 3. Indifference curves are convex to the origin because
  1.    Two goods are perfect substitutes
  2.    Two goods are imperfect substitutes
  3.    Two goods are perfect complementary goods
  4.    None of the above
Answer: Option B

Question 4. Risks in the business arise because of
  1.    Introduction of the new products
  2.    Uncertain policy of rival firms
  3.    Changes in tastes
  4.    All of the above
Answer: Option D

Question 5. The total effect of a price change of a commodity is
  1.    Sustitution effect plus price effect
  2.    Substitution effect plus income effect
  3.    Substitution effect plus demonstration effect
  4.    Substitution effect minus income effect
Answer: Option B

Question 6. The following are some of the costs of a clothing manufacturer. State which among them will you consider as fixed cost?
  1.    Cost of cloth
  2.    Piece wages paid to workers
  3.    Depreciation on machines owing to time
  4.    Cost of electricity for running machines
Answer: Option C