MCQs
Total Questions : 230
| Page 5 of 23 pages
Answer: Option B. -> All sectors
Answer: (b)The classical economists were of the opinion that – the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
Answer: (b)The classical economists were of the opinion that – the law of diminishing returns applies only to agriculture and to some extractive industries, such as mining, fisheries urban land, etc. However, it is applicable to other sectors such as manufacturing as well.
Answer: Option A. -> one seller and one buyer
Answer: (a)
In a bilateral monopoly, there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as monopoly power and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible.
Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.
Answer: (a)
In a bilateral monopoly, there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as monopoly power and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible.
Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.
Answer: Option B. -> Perfect competition
Answer: (b)The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. The products of all firms in the industry are homogeneous and identical.
Answer: (b)The fundamental condition of perfect competition is that there must be a large number of sellers or firms. Homogeneous Commodity is the second fundamental condition of a perfect market. The products of all firms in the industry are homogeneous and identical.
Answer: Option B. -> consumers are free to spend their income as they like.
Answer: (b)
Consumer sovereignty means that buyers ultimately determine which goods and services remain in production.
In unrestricted markets, those with income or wealth are able to use their purchasing power to motivate producers. So ultimately it means how the consumers want to spend their incomes.
Answer: (b)
Consumer sovereignty means that buyers ultimately determine which goods and services remain in production.
In unrestricted markets, those with income or wealth are able to use their purchasing power to motivate producers. So ultimately it means how the consumers want to spend their incomes.
Answer: Option B. -> effect of change in price of a commodity on its demand
Answer: (b)
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price.
Price is the key determinant of demand. Fluctuations in price lead to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
Answer: (b)
The law of demand states the inverse relation that comes to exist of between price in one hand and quantity demanded on the other. The law of demand portrays that demand is the function of price.
Price is the key determinant of demand. Fluctuations in price lead to changes in the quantity demanded. In other words, the higher the price of a product, the lower the quantity demanded.
Answer: Option B. -> land
Answer: (b)
Factor payments refer to payments made to scarce resources, or the factors of production (labour, capital, land, and entrepreneurship), in return for productive services.
Wages are paid for the services of labour; interest is the payment for the services of capital, rent is the services for land, and profit is the factor payment to entrepreneurship.
Answer: (b)
Factor payments refer to payments made to scarce resources, or the factors of production (labour, capital, land, and entrepreneurship), in return for productive services.
Wages are paid for the services of labour; interest is the payment for the services of capital, rent is the services for land, and profit is the factor payment to entrepreneurship.
Answer: Option B. -> the revenue per unit of commodity sold
Answer: (b)
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold.
Then, AR = TR/Q AR.
In other words, it means price.
Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from the seller’s point of view. Therefore, the average revenue curve of the firm is the same as the demand curve of the consumer.
Answer: (b)
Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold.
Then, AR = TR/Q AR.
In other words, it means price.
Since the demand curve shows the relationship between price and the quantity demanded, it also represents the average revenue or price at which the various amounts of a commodity are sold, because the price offered by the buyer is the revenue from the seller’s point of view. Therefore, the average revenue curve of the firm is the same as the demand curve of the consumer.
Answer: Option A. -> Schumpeter
Answer: (a)
Joseph Alois Schumpeter (1883-1950) was an Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth.
He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
Answer: (a)
Joseph Alois Schumpeter (1883-1950) was an Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth.
He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
Answer: Option B. -> cheap money policy
Answer: (b)
Cheap money policy involves loans or credit with a low interest rate, or the setting of low-interest rates by the central bank of the country. Cheap money is good for borrowers but bad for investors.
The cheap money policy was one of the primary catalysts of the 2008 recession.
Answer: (b)
Cheap money policy involves loans or credit with a low interest rate, or the setting of low-interest rates by the central bank of the country. Cheap money is good for borrowers but bad for investors.
The cheap money policy was one of the primary catalysts of the 2008 recession.
Answer: Option B. -> Labour Surplus Economy
Answer: (b)
‘Labour’ refers to the people required to carry out a process in a business. Labour-intensive processes are those that require a relatively high level of labour compared to capital investment. These processes are more likely to be used to produce individual or personalised products or to produce on a small scale.
The costs of labour are:
wages and other benefits,
recruitment,
training and so on.
Labour-intensive processes are more likely to be seen in Job production and in smaller-scale enterprises.
Answer: (b)
‘Labour’ refers to the people required to carry out a process in a business. Labour-intensive processes are those that require a relatively high level of labour compared to capital investment. These processes are more likely to be used to produce individual or personalised products or to produce on a small scale.
The costs of labour are:
wages and other benefits,
recruitment,
training and so on.
Labour-intensive processes are more likely to be seen in Job production and in smaller-scale enterprises.
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