Eco MCQ 2 - Multiple Choice Questions (MCQ) for Economics 1 BALLB/BBALLB PDF

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Multiple Choice Questions (MCQ) for Economics 1 BALLB/BBALLB...

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MCQ – ECONOMICS I UNIT II

1. What is the demand of a commodity? [A] Need of the commodity [B] Desire for a commodity [C] Quantity of a commodity demanded at a particular time at a particular price [D] Amount of commodity demanded Ans c 2.

Which of the following is correct regarding the law of demand? [A] It is relationship between Income and price of commodity [B] Assumes Income of customer should not change [C] Assumes Price of the commodity should not change [D] It is relationship between Income and Quantity demanded

Ans b

3.

What is perfectly inelastic demand? [A] Demand doesn’t change with price [B] Demand change with price [C] Change in demand is equal to price [D] Demand changes infinitely

Ans a

4.

Which of the following is not a factor affecting the supply of a commodity? [A] Price of commodity [B] Change of technology of production [C] Change of input prices [D] Income of customers

Ans d

5.

Which among the following is correct regarding the supply curve? [A] It is relation between price of good and quantity produced [B] It is a negatively sloped curve [C] It is relation between price and quantity supplied [D] None of the above

Ans c

6.

Why does Demand of a commodity reduce?

[A] Increase in price of the commodity [B] Decrease in prices of other goods [C] Consumers income decreased [D] Increase in price of other goods Ans a

7.

Which among the following is an example of substitution goods? [A] Milk and Coffee [B] Pen and Paper [C] Ink and Pen [D] Tea and coffee

Ans d

8.

Which among the following is correct regarding Giffen goods? [A] Demand of goods increases with increase in price [B] Demand of goods decreases with increase in price [C] Demand of goods remains unchanged with increase in price [D] None of the above

Ans a

9.

What is marginal utilty in economics signify? [A] Small utlity [B] Additional utlity [C] Minimum utility [D] Satisfied utilty

Ans b

10.

What is the basis for the law of demand? [A] Diminishing marginal utility [B] Demand and supply relation [C] Total utility of a good [D] None of the above

Ans a

11.

Ans d

Which among the following best describes scarcity in economics? [A] Low demand for good [B] High demand and less supply of good [C] Low demand as people don’t want to consume it [D] Goods available are not free

12.

What is Market equilibrium? [A] Quantity demanded greater than quantity supplied [B] Quantity demanded less than quantity supplied [C] Quantity demanded equal to quantity supplied [D] Quantity demanded is same as quantity produced

Ans c

13.

What defines a market place in an economy? [A] Place where profits are made [B] Place where goods are made [C] Place where people meet [D] Place where buyers meet sellers

Ans d

14.

Which of the following is a fixed cost for a firm? [A] Land [B] Labour [C] both a and b [D] None

Ans a

15.

What of the following is correct for marginal cost? [A] Increase in cost due to change in price [B] Increase in cost due to high demand [C] Increase in cost due to increase in extra unit of output [D] None of the above

Ans c

16.

What does Economic profit mean? [A] Total revenue – Total cost [B] Total cost – Total sold [C] Total cost- Total revenue [D] None of the above

Ans a

17. What is the extra cost imposed by the government which increase the price for a customer is known as?

[A] Subsidy [B] Tax [C] Inflation [D] Fine Ans b

18.

What is output per unit of input of labor known as? [A] Labor Productivity [B] Production ability [C] Capacity [D] None of the above

Ans a 19.

Which among the following is not a part of factor of production? [A] Land [B] Labour [C] Capital [D] Wages

Ans d

20. Income of a consumer affect the a) Supply of a good b) Demand of a good c) Both a) and b) d) None of the above Ans: b)

21. Factors affecting demand of a commodity include: a. Technology of production b. Excise duty c. Price of related goods d. None of the above Ans: c)

22. Setting in of rainy season will lead to a. Movement along the demand cure of umbrellas b. Shift in the demand cure of umbrellas c. Both a & b d. Neither a nor b Ans: b)

23. If taste and preference of chocolate milk powder rise, it leads to a. Rise in demand of chocolate b. Rise in supply of chocolate milk powder c. Rise in demand of chocolate milk powder d. All of the above Ans c

24. Change in price of inputs affect the a. Supply of a good b. Demand of a good c. Both a) and b) d. None of the above Ans: a)

25. Factors affecting supply of a commodity include: a. Technology of production b. Income of consumer c. Taste and preference d. None of the above Ans: a)

26. Advancement in production technique will lead to

a. Rightward movement along the supply cure b. Rightward shift in the supply cure c. Both a & b d. Neither a nor b Ans: b)

27. If government raises the tax rate on production of good X. a. Rightward movement along the supply cure of X good b. Leftward shift in the supply cure of good X c. Both a & b d. Neither a nor b Ans: b)

28. Price of a good has increased from 10 rupees per unit to 20 rupees per unit. Due to this demand for this commodity has changed from 160 units to 120 units. Calculate price elasticity of demand a. 25 b. 0.30 c. 0.25 d. 1.25 Ans c

29. Demand curves with high elasticity has a. Steeper slope b. Flatter slope c. Straight line slope d. None of the above Ans b 30. Example of less elastic demand of a good is a. Air conditioner b. Luxury car c. Salt d. Washing machine Ans b

31. If Ed = 0; it means a. Perfectly elastic demand b. Perfectly inelastic demand c. Highly Inelastic demand d. Inelastic demand Ans b 32. Supply curves with less elasticity has a. Steeper slope b. Flatter slope c. Straight line slope d. None of the above Ans a 33. Price of a good has reduced from 100 rupees per unit to 50 rupees per unit. Due to this supply for this commodity has changed from 500 units to 120 units. Calculate price elasticity of supply a. b. c. d.

2.52 3 1.52 0.52

Ans c 34. If Henry buys 10 toffees, Susan buys 20 toffees and Mary buys 8 toffees at 5 rupees each. What will be the market demand? a. 37 b. 38 c. 28 d. 30 Ans b

35. How will rise in price of petrol impact the market equilibrium of the petrol cars? a. b. c. d.

Price and output of cars will rise Car’s price will fall and output rise Car’s price and output will fall Car’s price rises and output falls

Ans c 36. What will happen if demand for onions is more than supply of onions? a. Price of onions falls b. Price of onions rise c. Price of onions remain constant d. None of the above

Ans b 37. In short run, if MP is falling but positive a. TP increases at increasing rate b. TP increases at diminishing rate c. Both a) and b) d. None of the above Ans: b)

38. Short run time period is considered as: a. Less than one year b. Less than five years c. Less than ten years d. None of the above Ans: a) 39. In which phase of production does the producer operate in short run? a. First b. Second c. Third d. None Ans b 40. TP increase at increasing rate in short run a. MP falls b. MP is negative c. MP is positive d. MP rises Ans d

41. MP is calculated as a. TR n – TR n-1 b. TU n – TU n-1 c. TP n – TP n-1 d. TC n – TC n-1

Ans c 42. The gap between TC and TVC signify a. Rising FC b. FC c. Constant FC d. All of the above Ans b

43. Why does TVC initially increase at a diminishing rate in the short run? a. TP increases at diminishing rate b. TP increases at increasing rate c. TP increases d. TP increases at constant rate Ans b 44. Which is the example of variable cost? a. Rent b. Wages c. Both a and b d. None Ans b 45. When MC falls a. AC falls b. AC rises c. AC is above MC d. AC is below MC Ans c 46. AVC reaches its minimum point a. Before MC falls b. Before AC attains its minimum c. When MC rises d. When AC rises Ans b

47. Which of the following is also the demand curve a. AP b. AC c. AR d. ALL Ans c

48. What is the shape of TR curve when price is constant? a. Upward sloping, concave b. Upward sloping, convex c. Upward sloping, straight line d. Upward sloping Ans c 49. AR > MR, when a. P is constant b. P is changing c. More can be sold at a lesser price d. All of the above Ans c 50. TR is the function of a. Output sold b. Output produced c. Output retained d. None of the above Ans a...