introduction to micro economics section 5 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Micro Economics topic of indian economy mcq
(a) Joseph Schumpeter
(b) Joan Robinson
(c) Edward Chamberlin
(d) John Bates Clark
The correct answers to the above question in:
Answer: (c)
In treatments of monopolistic competition, Edward Chamberlin and Joan Robinson are usually credited with simultaneously and independently developing the theory of monopolistic or imperfect competition.
Chamberlin published his book ‘The Theory of Monopolistic Competition’ in 1933, the same year that Joan Robinson published her book on the same topic: ‘The Economics of Imperfect Competition,’ so these two economists can be regarded as the parents of the modern study of imperfect competition.
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Read more introduction to micro economics Based Indian Economy Questions and Answers
Question : 1
The principle of maximum social advantage is the basic principle of
a) Environmental Economics
b) Micro Economics
c) Macro Economics
d) Fiscal Economics
Answer »Answer: (d)
The ‘Principle of Maximum Social Advantage’, introduced by British economist Hugh Dalton, is the fundamental principle of Public Finance which implies that all the financial operations of the state should aim at maximization of net social benefit.
It takes into consideration both the aspects of public finance that is the government revenue or taxation as well as government expenditure. Since it studies problems related to government taxation and spending, it comes under the domain of fiscal economics.
Question : 2
Division of labour is limited by
a) working space
b) the number of workers
c) hours of work
d) extent of the market
Answer »Answer: (d)
Division of labour is a process whereby the production process is broken down into a sequence of stages and workers are assigned to particular stages.
As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment.
Question : 3
Which of the following are not fixed costs?
a) Insurance charges
b) Rent on land
c) Municipal taxes
d) Wages paid to workers
Answer »Answer: (d)
In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as salaries or rents being paid per month and are often referred to as overhead costs.
For some employees, salary is paid on monthly rates, independent of how many hours the employees work. This is a fixed cost. On the other hand, the hours of hourly employees paid in wages can often be varied, so this type of labour cost is a variable cost.
Question : 4
The relationship between the value of money and the price level in an economy is
a) Stable
b) Direct
c) Inverse
d) Proportional
Answer »Answer: (c)
The basic causal relationship between the price level and the value of money is that as the price level goes up, the value of money goes down.
The "value of money" refers to what a unit of money can buy whereas the "price level" refers to the average of all of the prices of goods and services in a given economy.
Question : 5
In the case of an inferior good, the income elasticity of demand is :
a) Positive
b) Zero
c) Negative
d) Infinite
Answer »Answer: (c)
Negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes.
Positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.
Question : 6
The situation in which total Revenues equals total cost, is known as :
a) Perfect competition
b) Monopolistic competition
c) Equilibrium level of output
d) Break even point
Answer »Answer: (d)
In economics and cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even.”
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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