introduction to micro economics section 3 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Micro Economics topic of indian economy mcq
(a) go far advertising campaign.
(b) stop production.
(c) continue to produce as long as it can cover its variable costs.
(d) raise price of its product.
The correct answers to the above question in:
Answer: (b)
In the short run, a firm that is operating at a loss (where the revenue is less than the total cost or the price is less than the unit cost) must decide to operate or temporarily shut down.
.It will shut down if the sale of the goods or services produced cannot even cover the variable costs of production.
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Read more introduction to micro economics Based Indian Economy Questions and Answers
Question : 1
Real wage is :
a) $\text"Money wage"/\text"price level"$
b) $\text"Profit"/\text"price level"$
c) $\text"Rent"/\text"price level"$
d) $\text"Interest"/\text"price level"$
Answer »Answer: (a)
If a person’s wage rises by ten per cent and prices rise by more than ten per cent, his real wage goes down.
Question : 2
Selling cost means:
a) Cost Incurred on factors of production
b) Cost of selling a product
c) Cost incurred in transportation
d) Cost Incurred in advertisement
Answer »Answer: (d)
Selling cost is total cost of marketing, advertising, and selling a product. It differs from the production cost which is incurred to produce goods. Selling cost influences the commercial desire to purchase a commodity.
Question : 3
Price theory is also known as
a) Micro Economics
b) Macro Economics
c) Development Economics
d) Public Economics
Answer »Answer: (a)
Price theory is also known as microeconomics and is concerned with the economic behaviour of individual consumers, producers and resource owners. Prof. Leftwich defines Price Theory as “it is concerned with the flow of goods and services from business firms to consumers, the composition of flow and the evaluation of pricing of the component parts of the flow.
It is concerned too with the flow of productive resources (or their services) from resource owners to business firms with their evaluation and with their allocation among alternative uses.”
Question : 4
Surplus earned by a factor other than land in the short period of referred to as
a) super-normal rent
b) economic rent
c) net rent
d) quasi-rent
Answer »Answer: (d)
Quasi-rent is the surplus that is received in a short period because of demand exceeding the supply by the man-made factors besides land. It is an analytical term in economics, for the income earned, in excess of post-investment opportunity cost, by a sunk cost investment.
In general, economic rent is the difference between the income from a factor of production in particular use, and either the cost of bringing the factor into economic use (Classical factor rent) or the opportunity cost of using the factor, where opportunity cost is defined as the current income minus the income available in the next best use.
Question : 5
The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called
a) Worker’s Surplus
b) Consumer’s Surplus
c) Producer’s Surplus
d) Landlord’s Surplus
Answer »Answer: (b)
Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay.
If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they spent to buy it.
Question : 6
The father of Economics is
a) Karl Marx
b) Marshall
c) Adam Smith
d) J.M. Keynes
Answer »Answer: (c)
Adam Smith is known as ‘Father of Modern Economics.’ He is best known for two classic works: The Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776).
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
Introduction to Micro Economics Shortcuts and Techniques with Examples
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