introduction to micro economics section 1 Practice Questions Answers Test with Solutions & More Shortcuts
Introduction to Micro Economics PRACTICE TEST [8 - 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
Question : 16 [SSC IT 2007]
Economies of Scale means reduction in
a) total cost of distribution
b) unit cost of production
c) unit cost of distribution
d) total cost of production
Answer »Answer: (b)
In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion.
“Economies of scale” is a long-run concept and refers to reductions in unit cost as the size of a facility and the usage levels of other inputs increase.
Question : 17 [SSC DEO & LDC 2013]
Elasticity of demand with respect to price is
a) Elasticity = $\text"% change in supply"/\text"% change in price"$
b) Elasticity = $\text"% change in demand"/\text"% change in price"$
c) Elasticity = $\text"% change in price"/\text"% change in demand"$
d) Elasticity = $\text"% change in demand"/\text"% change in supply"$
Answer »Answer: (b)
Price elasticity of demand (PED or Ed) is a measure used in economics to show the responsiveness, or elasticity, of the quantity, demanded of a good or service to a change in its price.
The formula for the coefficient of price elasticity of demand for a good is: $e_(R) = {{DQ}/Q}/{{dP}/P}$,
where $e_(R)$ = Elasticity of demand;
dQ/ Q= % change in demand and
dP/P= % change in price.
Question : 18 [SSC CHSL 2014]
As the number of investments made by a firm increases, its internal rate of return
a) increases because the level of savings will fall.
b) declines due to diminishing marginal productivity.
c) declines because the market rate of interest will fall, ceteris paribus.
d) increases to compensate the firm for the current consumption foregone.
Answer »Answer: (d)
Internal rates of return are commonly used to evaluate the desirability of investments or projects. The higher a project's internal rate of return, the more desirable it is to undertake the project.
A firm (or individual), in theory, undertakes all projects or investments available with IRRs that exceed the cost of capital.
As the number of investments increases, its internal rate of return is greater than an established minimum acceptable rate of return or cost of capital.
Question : 19 [SSC CML 2001]
The term utility means
a) None of these
b) usefulness of a commodity
c) the satisfaction which a commodity yields
d) the service which a commodity is capable of rendering
Answer »Answer: (c)
In economics, ‘Utility,’ refers to the total satisfaction received from consuming a good or service.
It is usually applied by economists in such constructs as the indifference curve, which plots the combination of commodities that an individual or a society would accept to maintain a given level of satisfaction.
Question : 20 [SSC CGL 2010]
“Economics is what it ought to be” - This statement refers to
a) Fiscal economics
b) Normative economics
c) Positive economics
d) Monetary economics
Answer »Answer: (b)
Normative economics (as opposed to positive economics) is that part of economics that expresses value judgments (normative judgments) about economic fairness or what the economy ought to be like or what goals of public policy ought to be.
It is the study or presentation of “what ought to be” rather than what actually is. Normative economics deals heavily with value judgments and theoretical scenarios.
An example of a normative economic statement would be, “We should cut taxes in half to increase disposable income levels”. By contrast, a positive (or objective) economic observation would be, “Big tax cuts would help many people, but government budget constraints make that option infeasible.”
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Introduction to Micro Economics Shortcuts »
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indian economy MCQ CATEGORIES
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» Introduction to Indian Economy
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» Planning, Economic Development & Five year Plans
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» National Income & Human Development Index
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» Agriculture Sector, Subsidy and Food Processing
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» Industries, Manufacturing & Service Sectors
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» Inclusive growth, Sustainable development and employment
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» Poverty & Unemployment
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» Introduction to Micro Economics
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» Introduction to Macro Economics
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» Macro fundamentals, GDP, Investment, Growth
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» Demand & Supply, Profit Loss, Inflation & Price Index
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» Fiscal Policy, Public Finance and Monetary Policy
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» Money Supply, Banking and Financial Institutions
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» Taxes Types, Methods & Budgeting Process
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» Banking, Security Market & Insurance
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