introduction to micro economics section 7 MCQ Questions & Answers Detailed Explanation
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The following question based on Introduction to Micro Economics topic of indian economy mcq
(a) Average Revenue is more than the Marginal Revenue
(b) Marginal Revenue is less than the Average Revenue
(c) Average Revenue is less than the Marginal Revenue
(d) Average Revenue is equal to the Marginal Revenue
The correct answers to the above question in:
Answer: (d)
Perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous product.
In the short run, perfectly competitive markets are not productively efficient as output will not occur where marginal cost is equal to average cost (MC=AC).
They are allocatively efficient, as output will always occur where marginal cost is equal to marginal revenue (MC=MR).
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Read more introduction to micro economics Based Indian Economy Questions and Answers
Question : 1
Name the curve which shows the quantity of products a seller wishes to sell at a given price level.
a) None of these
b) Demand curve
c) Cost curve
d) Supply curve
Answer »Answer: (d)
The supply curve shows the relationship between the price of a good and the quantity supplied, holding constant the values of all other variables that affect supply.
Each point on the curve shows the quantity that sellers would choose to sell at a specific price.
Question : 2
Which is the most essential function of an entrepreneur ?
a) Risk bearing
b) Supervision
c) Management
d) Marketing
Answer »Answer: (a)
An entrepreneur performs a series of functions necessary right from the genesis of an idea up to the establishment and effective operation of an enterprise.
The functions of an entrepreneur as a risk bearer are specific in nature. The entrepreneur assumes all possible risks of business that emerges due to the possibility of changes in the tastes of consumers, modern techniques of production and new inventions.
Such risks are not insurable and incalculable. In simple terms, such risks are known as uncertainty concerning a loss.
Question : 3
Production refers to
a) use of a product
b) destruction of utility
c) creation of utilities
d) exchange value
Answer »Answer: (c)
Production refers to “the creation of utility having value-in-exchange.” The process of production may create six types of utilities: form utility, time utility, place utility, ownership utility, service utility and knowledge utility.
Question : 4
Quasi rent is a_________ phenomenon.
a) no time
b) medium term
c) long term
d) short term
Answer »Answer: (d)
Quasi-rent is a term in economics that describes certain types of returns to firms. It differs from pure economic rent in that it is a temporary phenomenon. It can arise from the barriers to entry that potential competitors face in the short run, such as the granting of patents or other legal protections for intellectual property by governments.
Question : 5
Who developed the innovations theory of profit ?
a) Schumpeter
b) Walker
c) Clark
d) Knight
Answer »Answer: (a)
Joseph Alois Schumpeter (1883-1950) was an Austrian-born American economist and social scientist. He did important early analyses of business cycles and economic growth.
He pinpointed technical innovation as the chief contributor to growth. In Capitatism, Socialism and Democracy (1942), he argued that capitalism would naturally evolve into socialism through its very success.
Question : 6
Labour Intensive Technique would get chosen in a
a) Developing Economy
b) Labour Surplus Economy
c) Capital Surplus Economy
d) Developed Economy
Answer »Answer: (b)
‘Labour’ refers to the people required to carry out a process in a business. Labour-intensive processes are those that require a relatively high level of labour compared to capital investment. These processes are more likely to be used to produce individual or personalised products or to produce on a small scale.
The costs of labour are:
- wages and other benefits,
- recruitment,
- training and so on.
Labour-intensive processes are more likely to be seen in Job production and in smaller-scale enterprises.
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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