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 : 21 [FCI AG 2012]
In a Capitalistic Economy, the prices are determined by :
a) Sellers in the Market
b) Demand and Supply
c) Government Authorities
d) Buyers in the Market
Answer »Answer: (b)
Capitalism generally refers to an economic system in which the means of production are largely or entirely privately owned and operated for a profit, structured on the process of capital accumulation.
In general, investments, distribution, income, and pricing are determined by markets. In capitalism, prices are decided by the demand-supply scale.
For example, higher demand for certain goods and services lead to higher prices and lower demand for certain goods lead to lower prices.
Question : 22 [SSC DEO & LDC 2013]
Third stage of Law of Variable Proportion is called
a) increasing returns
b) negative returns
c) positive returns
d) constant returns
Answer »Answer: (b)
The stages of Law of Variable Proportion are:
Stage 1: Increasing return;
Stage 2: Diminishing return; and
Stage 3: Negative Return.
In the third stage, the Marginal Product of the variable factor is zero. In this stage, the Total Product starts diminishing.
Question : 23 [SSC GL 2014]
The demand of a factor of production is
a) discretion of the producer
b) direct
c) derived
d) neutral
Answer »Answer: (c)
There are 4 factors of production;
- land,
- labour,
- capital and
- entrepreneurship.
The demand for the factors of production is a derived demand. That means these factors of production are demanded because there is a demand for the end product they produce.
Question : 24 [SSC Investigator 2010]
‘Law of demand’ implies that when there is excess demand for a commodity, then
a) quantity demanded of the commodity falls
b) price of the commodity falls
c) price of the commodity remains same
d) price of the commodity rises
Answer »Answer: (d)
The Law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant.
That is, if the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in the quantity of goods demanded by the consumer will be negatively correlated to the change in the price of the good.
When there is excess demand for the commodity the price starts rising and it continues to rise till equilibrium price is reached.
Question : 25 [SSC GL 2014]
A unit price elastic demand curve will touch
a) only quantity axis
b) both price and quantity axis
c) neither price axis, nor quantity axis
d) only price axis
Answer »Answer: (c)
Unit elastic refers to An elasticity alternative in which any percentage change in price causes an equal percentage change in quantity.
In other words, any change in price, whether big or small, triggers exactly the same percentage change in quantity.
However, the unit price elastic demand curve does not touch either the price axis or quantity axis.
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Introduction to Micro Economics Shortcuts »
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indian economy MCQ CATEGORIES
-
» Introduction to Indian Economy
-
» Planning, Economic Development & Five year Plans
-
» National Income & Human Development Index
-
» Agriculture Sector, Subsidy and Food Processing
-
» Industries, Manufacturing & Service Sectors
-
» Inclusive growth, Sustainable development and employment
-
» Poverty & Unemployment
-
» Introduction to Micro Economics
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» Introduction to Macro Economics
-
» 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
-
» Money Supply, Banking and Financial Institutions
-
» Taxes Types, Methods & Budgeting Process
-
» Banking, Security Market & Insurance
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