Introduction to Economics - Online Test
Q1. The basic factors of production are land, labour, capital and______
Answer : Option D
Explaination / Solution:
Factors of production is an economic term that describes the inputs that are used in the production of goods or services in order to make an economic profit. This include land, labour, capital and entrepreneurship.
Q2. One of the characteristics of economic resource is scarcity. Which is the other?
Answer : Option D
Explaination / Solution:
Economic resources are the assets which an economy may have available to supply and produce goods and services to meet the ever changing needs and wants of individuals and society as a whole.
Q3. Positive economics states
Answer : Option A
Explaination / Solution:
Positive economics is the branch of economics that concerns the description and explanation of economic phenomena.
Q4. Normative economics states
Answer : Option C
Explaination / Solution:
Normative economics is a part of economics that expresses value or normative judgements about economic fairness or what the outcome of the economy or goals of public policy ought to be.
Q5. An individual in economics is
Answer : Option A
Explaination / Solution:
The decision Making Unit is a collection or team of individuals who participate in a buyer decision process.
Q6. The basic assumption regarding resources while drawing a PPC is
Answer : Option B
Explaination / Solution:
Since human wants are unlimited and the means to satisfy them are limited, every society is faced with the fundamental problem of choosing and allocating its scarce resources among alternative uses. The production possibility curve or frontier is an analytical tool which is used to illustrate and explain this problem of choice.
Q7. A PPC is downward sloping and____________ to the origin. Choose the correct option.
Answer : Option A
Explaination / Solution:
PPFs are normally drawn as bulging upwards or outwards from the origin ("concave" when viewed from the origin), but they can be represented as bulging downward (inwards) or linear (straight), depending on a number of assumptions. A PPF illustrates several economic concepts, such as scarcity of resources, opportunity cost, productive efficiency, allocative efficiency, and economies of scale.
Q8. What is the other name for opportunity cost in economics
Answer : Option B
Explaination / Solution:
Opportunity Cost is also known as Economic Opportunity Loss and it is the highest value alternative forgone. Moreover, Real cost is the fixed cost, which you have paid and therefore, opportunity cost is not a real cost.
Q9. In a centrally planned economy, the central problems are solved by
Answer : Option B
Explaination / Solution:
Method which can be employed to solve the central problems is the adoption of economic planning. In this method, the solution of the various basic problems is not achieved through the free working of demand for and supply of goods and factors. But to solve these problems, Government sets up a central planning authority which has been called by several names, such as planning commission, planning ministry or planning board.
Q10. In a market economy, the central problems are solved by
Answer : Option D
Explaination / Solution:
To solve the problems through market or price mechanism ie., what goods are to be produced and what quantities, which methods for production are to be employed for the production of goods and how the output is to be distributed, should be decided by the free play of the forces of demand and supply.
