Practice Quiz set 5 - indian economy mcq Online Quiz (set-1) For All Competitive Exams
Q-1) The total utility from 9 units of commodity x is 20 and from 10 units is 15. Calculate the marginal utility from 10th unit.
(a)
(b)
(c)
(d)
Marginal Utility = Change in Total Utility / Change in number of Units consumed.
The first component of the formula is to calculate the change in total utility. The second component of the marginal utility formula is the change in the number of units that have been consumed.
This is done by subtracting the number that is currently being consumed from a previously consumed amount.
So, Marginal Utility (MU) from 10th Unit = TU10 - TU9
= 15 – 20= –5
Q-2) If total product is at its maximum then: (AP= Average product) (MP= Marginal product)
(a)
(b)
(c)
(d)
Total product (TP) is the total output a production unit can produce, using different combinations of factors of production.
When marginal product =0 (at point D in the figure), the total product is at its maximum (as seen at point C in the figure given below). Then en as the marginal product becomes negative, the total product starts going down.
Q-3) What is needed for creating demand ?
(a)
(b)
(c)
(d)
Demand refers to how much (quantity) of a product or service is desired by buyers.
The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship.
So for demand to originate, a product is required first.
Q-4) Which one of the following is not included while estimating national income through income method?
(a)
(b)
(c)
(d)
The income approach equates the total output of a nation to the total factor income received by residents or citizens of the nation. Transfer incomes are excluded from national income.
Therefore, wages of labourers will be included, pensions of retired workers will be excluded from national income.
Labour income includes compensations in kind. Non-labour income includes dividends, undistributed profits of corporations before taxes, interest, rent, royalties, profits of non-incorporated enterprises and of government enterprises.
Q-5) The innovation theory of profit was proposed by
(a)
(b)
(c)
(d)
The Innovation Theory of Profit was proposed by Joseph. A. Schumpeter, who believed that an entrepreneur can earn economic profits by introducing successful innovations.
In other words, the innovation theory of profit posits that the main function of an entrepreneur is to introduce innovations and the profit in the form of reward is given for his performance.
Q-6) Which of the following costs is related to marginal cost?
(a)
(b)
(c)
(d)
In economics, marginal cost is the change in the total cost that arises when the quantity produced is incremented by one unit.
That is, it is the cost of producing one more unit of a good. Marginal cost is independent of the fixed cost and depends on the changes in the variable factors.
Since fixed costs do not change with output, there are no marginal fixed costs when output is increased in the short run.
It is only the variable costs that vary with output in the short run. Therefore, the marginal costs are in fact due to the changes in variable costs, and whatever the amount of fixed cost, the marginal cost is unaffected by it.
Q-7) In a business, raw materials, components, work in progress and finished goods are jointly regarded as
(a)
(b)
(c)
(d)
Inventory refers to raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale.
Inventory represents one of the most important assets that most businesses possess because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders/owners.
Q-8) The main emphasis of Keynesian economics is on
(a)
(b)
(c)
(d)
Keynesian Economics is an economic theory of total spending in the economy and its effects on output and inflation. It emphasizes that government expenditures (or tax cuts) leads to increase in GDP which is a multiple of the original expenditure.
Q-9) An economy which does not have any relation with the rest of the world is known as
(a)
(b)
(c)
(d)
A Closed economy is an economy in which no activity is conducted with outside economies.
A closed economy is self-sufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.
Q-10) Which of the following is a consequence of inflationary price rise ?
(a)
(b)
(c)
(d)
Inflationary price rise is harmful to a country’s economic performance and to the welfare of its citizens. It can create a random redistribution of income given that inflation does not have an equal impact on individuals and groups.
The balance of payments may deteriorate because domestic inflation stimulates import spending, given that imports appear relatively cheaper, and dampens export sales.
A continuous price rise can be an obstacle to development as it has an adverse effect on saving and investment and causes a fall in growth.