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Quiz 4
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Q.1
Demand for a commodity refers to a
Desire for the commodity
Need for the commodity
Quantity demanded of that commodity
Quantity of the commodity demanded at a certain price during any particular period of time
Q.2
Under conditions of perfect competition in the product market
MRP = VMP
MRP > VMP
VMP > MRP
None of the above
Q.3
Which statistical measure helps in measuring the purchasing power of money?
Arithmetic average
Index numbers
Harmonic mean
Time series
Q.4
Fisher's ideal index number is
Arithmetic mean of Laspeyre's and Paasche's index
Harmonic mean of Laspeyre's and Paasche's index
Geometric mean of Laspeyre's and Paasche's index
None of the above
Q.5
Number of times a unit of money changes hands in the course of a year is called
Supply of money
Purchasing power of money
Velocity of money
Value of money
Q.6
What is meant by Autarky in international trade?
Monopoly in international trade
Imposition of restrictions in international trade
Removal of all restrictions from international trade
The idea of self sufficiency and no international trade by a country
Q.7
Normally a demand curve will have the shape
Horizontal
Vertical
Downward sloping
Upward sloping
Q.8
Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is
10%
30%
3
1
Q.9
Identify the aspect of taxation which is related to normative economics
Incidence of tax
Effect of tax on the capacity willingness to work
Equity of tax
None of the above
Q.10
In order to control credit, Reserve Bank of India should
Increase CRR and decrease Bank rate
Decrease CRR and reduce Bank rate
Increase CRR and increase Bank rate
Reduce CRR and increase Bank rate
Q.11
Which among the following is a function of the Reserve Bank of India?
Bank issues the letters of credit to their customers certifying their credibility
Collecting and compilation of statistical information relating to banking & other financial sector
Banks underwrite the securities issued by public or private organizations
Accepting deposits from the public
Q.12
Credit creation power of the commercial banks gets limited by which of the following?
Banking habits of the people
Cash Reserve Ratio
Credit policy of the central bank
All of the above
Q.13
An individual demand curve slopes downward to the right because of the
Working of the law of diminishing marginal utility
Substitution effect of decrease in price
Income effect of fall in price
All of the above
Q.14
Income elasticity of demand is defined as the responsiveness of
Quantity demanded to a change in income
Quantity demanded to a change in price
Price to a change in income
Income to a change in quantity demanded
Q.15
The supply of a good refers to
Stock available for sale
Total stock in the warehouse
Actual production of the good
Quantity of the good offered for sale at a particular price per unit of time
Q.16
The capital that is consumed by an economy or a firm in the production process is known as
Capital loss
Production cost
Dead-weight loss
Depreciation
Q.17
Who propounded the opportunity cost theory of international trade?
Ricardo
Marshall
Heckscher & Ohlin
Haberler
Q.18
Which among the following statement is INCORRECT?
Floating exchange rate system works on the market mechanism
Floating exchange rate breeds uncertainties and speculation
Economic and political factors and value judgement influence the choice of the exchange rate system
The system of floating exchange rate requires comprehensive government intervention
Q.19
Which among the following statement is INCORRECT?
Welfare economics is based on value judgements
Welfare economics is also called 'economics with a heart'
Welfare economics focuses on questions about equity as well as efficiency
The founder of Welfare economics was Alfred Marshall
Q.20
Who defined Economics as a 'science which studies human behaviour as a relationship betweeen ends and means which have alternative uses'?
L. Robbins
Alfred Marshall
Joan Robinson
Paul A. Samuelson
Q.21
Law of demand shows relation between
Income and price of commodity
Price and quantity of commodity
Income and quantity demanded
Quantity demanded and quantity supplied
Q.22
The economist's objections to monopoly rest on which of the following grounds?
There is a transfer of income from consumers to the monopolist
There is welfare loss as resources tend to be misallocated under monopoly
Both A and B are incorrect
Both A and B are correct
Q.23
In which of the following market structure is the degree of control over the price of its product by a firm very large?
Imperfect competition
Perfect competition
Monopoly
In A and B both
Q.24
Which cost increases continuously with the increase in production?
Avearge cost
Marginal cost
Fixed cost
Variable cost
Q.25
The cost of one thing in terms of the alternative given up is called
Real cost
Production cost
Physical cost
Opportunity cost
Q.26
Assume that consumer's income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certaintty that the equilibrium
Price will decrease
Price will increase
Quantity will decrease
Quantity will increase
Q.27
Which among the following statement is INCORRECT?
On a linear demand curve, all the five forms of elasticity can be depicted
If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
Q.28
If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to
Increase
Decrease
Remain the same
Become zero
Q.29
The offer curves introduced by Alfred Marshall, helps us to understand how the ___ is established in international trade.
Terms of trade
Equilibrium price ratio
Exchange rate
Satisfaction level
Q.30
Demand for factors of production is
Derived demand
Joint demand
Composite demand
None of the above
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