Introduction to Economics - Online Test
Q1. The normative economic analysis deals with the variables
Answer : Option A
Explaination / Solution:
Normative economic analysis refers to the analysis in which we study whether a particular mechanism is desirable or not. In this analysis, we study what ought to be the desired situation or in what ways the economic problems should be solved. In other words, it is concerned with what should be and what should not be, and what is desirable and what is not?
Q2. As they see Opportunity cost means
Answer : Option A
Explaination / Solution:
Opportunity cost, also known as alternative cost, is the value (not a benefit) of the choice of a best alternative cost while making a decision. A choice needs to be made between several mutually exclusive alternatives; assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would have been had by taking the second best available choice.
Q3. A Production Possibility Frontier shifts rightward if
Answer : Option C
Explaination / Solution:
The most common reason a PPF would shift is because of a change in technology, or because of economic growth.
Q4. The problem of ‘ How to’ is making a choice between
Answer : Option D
Explaination / Solution:
Technology means the correct proportion in which the different factors of production are to be employed. There are two types of techniques. A labour-intensive technique would employ relatively more labour and less capital. On the other hand, capital- intensive technique means more capital and less labour.The context of how to produce is ‘which techniques are to be adopted’?
Q5. What to produce also deal with what quantities to produce.
Answer : Option D
Explaination / Solution:
The quantity in which a commodity is to be produced is set at that level where demand equals supply. If quality produced is more or less, then there will be dis equilibrium in the market and price will fluctuate. Hence, to maintain stable equilibrium price it becomes necessary to make demand and supply equal.
Q6. Can there be an economy without economic problems
Answer : Option D
Explaination / Solution:
The economic problem – sometimes called the basic or central economic problem – asserts that an economy's finite resources are insufficient to satisfy all human wants and needs. It assumes that human wants are unlimited, but the means to satisfy human wants are scarce.
Q7. A movement along a PPC implies
Answer : Option C
Explaination / Solution:
The movement along the PPC from left to right shows that in order to produce more units of capital goods, the economy must sacrifice some amount of consumer goods
Q8. Increasing MOC mean
Answer : Option A
Explaination / Solution:
It reflects that as the output of good X is increased,the output of goodY is decreasing. Therefore the shape of ppc becomes concave to the origin. The slope of ppc shows increasing moc which tends to rise when resources are shifted from the production of one good to another .
Q9. Larger production of ___________ goods would lead to higher production in the future.
Answer : Option C
Explaination / Solution:
A capital good is a durable good that is used in the production of goods or services. Capital goods are one of the three types of producer goods, the other two being land and labour which are also known collectively as primary factors of production.
Q10. The branch of economics dealing with the problem of allocation of resources is
Answer : Option B
Explaination / Solution:
Microeconomics is the social science that studies the implications of individual human action, specifically about how those decisions affect the utilization and distribution of scarce resources. Microeconomics shows how and why different goods have different values, how individuals make more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another.
