Elements of Economic Theory Mcqs - Study For Buddies

Thursday, November 17, 2022

Elements of Economic Theory Mcqs

F.Y B.COM
SEMESTER - 1

ELEMENTS OF ECONOMIC THEORY
(EET)
MCQS - 5 March 2022

1. Which of the following is correct in the context of Marshallian Utility analysis?

A. utility is cardinal
B. utility is ordinal
C. marginal utility of money changes with changes in amount of money with the consumer 
D. utility can only be ranked but not measured

2. Which one is the internal factor affecting pricing policy?

A. Level of Competition in Market
B. Managerial Policy 
C. Business Environment
D. Government Tax policy 

3. In the full cost pricing, which cost is the base of the price?

A. marginal cost
B. average variable cost
C. average cost
D. total cost 

4. Which of these is not a feature of services?

A. lacks physical substance
B. cannot be touched or seen
C. can be experienced
D. is tangible in nature 

5. When the value of income elasticity of demand is higher, the income-demand curve will be

A. flatter 
B. steeper
C. vertical
D. horizontal

6. Which of these is not a feature of perfect competition?

A. homogeneous product
B. free entry and exit
C. seller is price maker 
D. perfect information

7. Mobile phones becoming as important as food, clothing and shelter implies that

A. wants differ in intensity
B. wants multiply with civilization 
C. wants are insatiable
D. wants are subjective in nature

8. Statement I: In economic theory, normal profits form a part of business firm's cost of production. 
Statement II: An accountant includes only explicit costs in cost calculation

A. both statements are true
B. both statements are false
C. statement I is true, statement II is false 
D. statement I is false, statement Il is true

9. Which of these is a central problem of an economy?

A. How to maximize profits
B. What to produce? 
C. How to maximize satisfaction
D. When to produce?

10. Which of these statements is true?

A. the total fixed cost curve is a vertical straight line with output measured on the x axis
B. the average fixed cost curve is a U shaped
C. the total fixed cost is upward sloping straight line
D. the average cost curve is U shaped 

11. Specific demand function is one which relates

A. quantity demanded to the price of the good, prices of related goods income of the consumer, tastes and preferences of the consumer, etc. 
B. quantity demanded to the price of the good
C. quantity demanded of a good to specific market only
D. quantity demanded of a good to specific consumer only

12. Which of these statements is correct?

A. when the long run average cost curve is falling, it will cut through the short run average cost curves
B. when the plant size is optimum, the long run average cost curve will cut the short run average cost curve
C. when the plant size is optimum, the minimum point of one short run average cost curve and of the long run average cost curve will be common
D. long run average curve will intersect the lowest short run average cost curve 

13. Following are the three time periods referred to with reference to the determination of market price except:

A. market period
B. short run 
C. medium run
D. long run

14. Jacob Viner defined economics as

A. study of scarcity
B. study of wealth
C. what economists do 
D. study of welfare

15. In the Robbins' definition of Economics, the term 'means' refers to

A. wants
B. alternative uses
C. meaning
D. resources 

16. Which of these statements is true?

A. In perfect competition, the total revenue curve is linear in nature 
B. In imperfect competition, the total revenue curve is linear in nature
C. In imperfect market, there are no restrictions on entry/exit
D. in perfectly competitive market, information is hard to get

17. Which definition of economics gives due importance to the element of time?

A. wealth definition
B. welfare definition
C. growth definition  
D. scarcity definition

18. Which of these is incorrect with reference to the algebraic demand function?

A. the price coefficient is positive
B. price appears on the left hand side of the equation
C. price appears on the right hand side of the equation 
D. quantity demand appears on the right hand side of the equation

19. When the price of good X increased from Rs.600 to Rs.650, its demand decreased from 200 units to 188 units. What is its price elasticity of demand?

A. 0.72
B. 0.88
C. 0.56 
D. 0.65

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