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1.

Micro economics theory deals with


(a) Economic behavior of individual economic decision
making units
(b) Economy as a whole
(c) Trade relations
(d) Economic growth of the society

2. Which of the following is a central problem of every
economy
(a) Abundance of resources
(b) Scarcity of economic resources
(c) Poverty
(d) Moral and ethical values

3. Normative economic theory deals with
(a) What is or how the economic problem facing the
society are solved
(b) How the problem should be solved
(c) What to Produce
(d) How to produce

4. In a mixed economy which sector(s) is/ are found
(a) Private Only (b) Public sector only
(c) None (d) Both a and b

5. In economic theory the term means refers to
(a) Resources (b) Arithmetic mean
(c) A characteristic (d) None

6. Cetris Paribus means
(a) Holding demand constant
(b) Holding supply constant
(c) Price being constant
(d) Other things being constant

7. Which of the following goods is likely to have
perfectly inelastic demand?
a. Car
b. Salt
c. Cabbage
d. Sugar

8. At higher prices people demand more of certain
goods not for their worth but for their
prestige value This is called
a. veblen effect
b. giffens paradox
c. speculative effect
d. none of the above

9. Which of the following statements is correct?
a. When the price falls the demand falls
b. Seasonal changes do not affect the supply of a
commodity
c. Taxes and subsidies do not influence the supply of
the commodity
d. With lower cost, it is profitable to supply more
of the commodity.

10. Scarcity of resources leads to
(a) Unsatisfaction of human wants
(b) Evaluation of alternative uses of scarce resources
(c) Both
(d) None
11. Who defined economics as Science which deals
with wealth
(a) J. B. Say (b) A. C. pigou
(c) Alfred Marshall (d) Robbins

12. Economics cannot be considered a perfect science
because
(a) Human behaviour is unpredictable
(b) It is difficult to make correct prediction of economic
variables
(c) Economist do not have common opinion about a
particular economic event
(d) All the three

13. In addition to three Central problem of economy,
the additional problem(s) raised by the Modern
economists is / are
(a) Are the resources fully utilized or not
(b) How efficient is the production and distribution
system
(c) Whether the capacity to produce or grow is
increasing or is static
(d) All the three

14. The basic assumption of an economic analysis is/
are
(a) Cetris paribus (b) Rational behaviour
(c) Both (d) None

15. The terms Micro economic and Macro economics
were coined by
(a) Professor A Samulson (b) Giffen
(c) Prof. Ragner Frisch (d) Eagle

16. ----------is known as father of economics
(a) Adam Smith (b) Professor A Samulson
(c) Alfred Marshall (d) J R Hicks

17. Which of these are outside the domain of macro
economics
(a) Consumer behavior
(b) National income
(c) Economic growth
(d) Balance of payment and trade

18. Scarcity of resources means
(a) Limited resources
(b) Non existence of resources
(c) Both
(d) None

19. Human wants are
(a) Unsatisfiable (b) Unlimited
(c) Undefined (d) Limited

20. Economics cannot be given the status of science
because
(a) Of non-uniformity of opinion and approach of
economist
(b) Economic behaviour of human being is
unpredictable
(c) Measuring rod of money is unstable
(d) All the three

21. Which of the following is not a central problem of a
society
(a) What to produce
(b) How to produce
(c) For whom to produce
(d) Where to produce
22. Which of these is an economic activity
(a) A father teaching his son at home instead of
sending to any coaching centre
(b) A hair dresser doing hair cut designing on payment
(c) A housewife mending her family cloths on her own
(d) A singer giving a show on his sons wedding
anniversary

23. Which of the following issue relates to micro-
economics
(a) Impact of crude price hike on inflation
(b) Impact of change in bank rate on bank saving and
investment
(c) Impact of Information technology on economic
growth
(d) Impact of shortage of wheat production on wheat
prices

24. Economics models are
(a) Based on some realistic assumptions
(b) Based on hypothetical assumptions
(c) Scientifically tested
(d) Based on necessity

25. The famous book An enquiry into the nature and
causes of wealth of Nation was written by
(a) Adam Smith (b) Samulson
(c) Robertson (d) JB Say

26. Which of the following is not a central problem of a
society
(a) What to produce
(b) How to produce
(c) For whom to produce
(d) What to eat

27. In free economy the decision about investment,
saving and consumption are decided by
(a) Price mechanism
(b) Central bank
(c) Planning Commission
(d) Finance budget

28. Chicken and fish are substitutes. If the price of
chicken increases, the demand for fish will
a. increase or decrease but the demand curve for
chicken will not change
b. increase and the demand curve for fish will shift
rightwards.
c. not change but there will be a movement along the
demand curve for fish.
d. decrease and the demand curve for fish will shift
leftwards.

29. Potato chips and popcorn are substitutes. A rise
in the price of potato chips will
the demand for popcorn and the quantity of
popcorn will
a. increase; increase
b. increase; decrease
c. decrease; decrease
d. decrease; increase

30. If the price of Orange Juice increases, the
demand for Apple Juice will _____________.
a. increase b. decrease
c. remain the same. d. become negative.
31. An increase in the demand for computers, other
things remaining same, will:
a. Increase the number of computers bought.
b. Decrease the price but increase the number of
computers bought.
c. Increase the price of computers.
d. Increase the price and number of computers
bought.

32. When total demand for a commodity whose
price has fallen increases, it is due to:
a. income effect.
b. substitution effect
c. complementary effect
d. price effect

33.Condition of consumers equilibrium:
a) Slope of IC = slope of budget line
b) MRSXY = PX/PY
c) MRS = price ratio of two goods
d) all of the above

34. Goods that exhibit direct price-demand
relationship are called:
a. Giffen goods b. Complementary goods
c. Substitute goods d. None of the above

35. The price of a commodity decreases from Rs 6
to Rs 4 and the quantity demanded of the good
increases from 10 units to 15 units, find the
coefficient of price elasticity. (Use Point Elasticity
Method)
a. 1.5 b. 2.5 c. -1.5 d. 0.5

36. An imposition of excise duty would effect the
demand of a product due to ..
(a) Income effect (b) Substitution effect
(c) Both (d) None

37. Two commodities X and Y goods can be inferred as
close substitute of each other if
(a) Increase in price of one leads to increase in
demand of other and vice versa
(b) Increase in price of one leads to decrease in
demand of other and vice versa
(c) Fall in price of one lead to fall in demand of other
one
(d) Increase in price of one leads to increase in
demand of other one

38.Consumer will be in surplus when:
a) MUX > PX b) MUX = PX
c) MUX < PX d) unlimited income

39. Two ICs never intersect each other because:
a) they cant be close to each other
b) they represent different levels of satisfaction
c) both
d) None

40.The budget line is also known as:
a) income line
b) price line
c) preference line
d) none