introduction to micro economics section 1 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Micro Economics topic of indian economy mcq
(a) Economic goods
(b) Luxury goods
(c) Expensive goods
(d) Capital goods
The correct answers to the above question in:
Answer: (a)
In economics, a good is something that is intended to satisfy some wants or needs of a consumer and thus has economic utility.
An economic good is a consumable item that is useful to people but scarce in relation to its demand so that human effort is required to obtain it.
In contrast, free goods (such as air) are naturally in abundant supply and need no conscious effort to obtain them.
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Question : 1
Which of the following are consumer semi-durable goods ?
a) Electrical appliance like fans and electric irons.
b) Cars and television sets
c) Milk and Milk products
d) Foodgrains and other food products
Answer »Answer: (d)
Goods that are neither indestructible nor lasting are defined as Semi Durable Goods.
They fall in the category between Durable Goods and Non Durable Goods. Some common Semi Durable Goods are clothing or preserved foods; vehicles and electronic home appliances are classified as Durable Goods.
Question : 2
Demand curve of a firm under perfect competition is :
a) U – shaped
b) horizontal to ox-axis
c) negatively sloped
d) positively sloped
Answer »Answer: (b)
Under Perfect Competition, the firm faces a horizontal demand curve. It can sell any quantity desired at the market price, but cannot sell anything above the market price.
Question : 3
From the national point of view, which of the following indicates micro approach?
a) Inflation in India
b) Study of sales of mobile phones by BSNL
c) Unemployement among Women
d) Per capita income in India
Answer »Answer: (b)
Macroeconomics is a branch of economics in which a variety of economy-wide phenomena is thoroughly examined such as, inflation, price levels, rate of growth, national income, gross domestic product and changes in unemployment.
On the other hand, Microeconomics studies the behaviour of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.
So the study of sales of mobile phones by BSNL comes under microeconomics.
Question : 4
In which market structure is the demand curve of the market represented by the demand curve of the firm ?
a) Perfect Competition
b) Monopoly
c) Oligopoly
d) Duopoly
Answer »Answer: (b)
Because the monopolist is the market's only supplier, the demand curve the monopolist faces is the market demand curve.
The market demand curve is downward sloping, reflecting the law of demand.
The fact that the monopolist faces a downward-sloping demand curve implies that the price a monopolist can expect to receive for its output will not remain constant as the monopolist increases its output.
Question : 5
The demand curve facing a perfectly competitive firm is
a) perfectly elastic
b) downward sloping
c) perfectly inelastic
d) a concave curve
Answer »Answer: (a)
A perfectly competitive industry is comprised of a large number of relatively small firms that sell identical products.
Each perfectly competitive firm is so small relative to the size of the market that it has no market control, it has no ability to control the price.
In other words, it can sell any quantity of output it wants at the going market price. This translates into a horizontal or perfectly elastic demand curve.
Question : 6
The theory of distribution relates to which of the following?
a) Equality in the distribution of the income and wealth
b) The distribution of assets
c) The distribution of income
d) The distribution of factor payments
Answer »Answer: (a)
In economics, distribution theory is the systematic attempt to account for the sharing of the national income among the owners of the factors of production—land, labour, and capital.
Traditionally, economists have studied how the costs of these factors and the size of their return—rent, wages, and profits—are fixed.
The theory of distribution involves three distinguishable sets of questions.
First, how is the national income distributed among persons?
Second, what determines the prices of the factors of production?
Third, how is the national income distributed proportionally among the factors of production?
GET Introduction to Micro Economics PRACTICE TEST EXERCISES
introduction to micro economics section 1
introduction to micro economics section 2
introduction to micro economics section 3
introduction to micro economics section 4
introduction to micro economics section 5
introduction to micro economics section 6
introduction to micro economics section 7
introduction to micro economics section 8
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