introduction to micro economics section 1 MCQ Questions & Answers Detailed Explanation

Answer: (b)

The equilibrium price is a state in an economy where the supply of goods matches demand. When a major index experiences a period of consolidation or sideways momentum, it can be said that the forces of supply and demand are relatively equal and that the market is in a state of equilibrium.

In short, it is the market price at which the supply of an item equals the quantity demanded.

Answer: (a)

Division of Labor is the “specialization” of cooperative labour in specific, circumscribed tasks and like roles.

It is a process whereby the production process is broken down into a sequence of stages and workers are assigned to particular stages.

Answer: (c)

A market economy is an economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country’s individual citizens and businesses.

There is little government intervention or central planning. The United States is the world’s premier market economy.

Answer: (c)

A seller’s market is a market that has more buyers than sellers. High prices result from this excess of demand oversupply.

The opposite of the seller’s market is the buyer’s market, where supply greatly exceeds demand.

Answer: (c)

Human capital is the stock of competencies, knowledge, social and personality attributes, including creativity, embodied in the ability to perform labour so as to produce economic value.

It is an aggregate economic view of the human being acting within economies, which is an attempt to capture the social, biological, cultural and psychological complexity as they interact in explicit and/or economic transactions.

Answer: (d)

The Production function expresses a functional relationship amidst quantities of raw materials and goods.

It is the name given to the relationship between rates of input of productive services and the rate of output of product.