MCQs Micro Economics

80- _____ factors determine the position and slope of consumption curve.

a.      Objective

b.     Subjective

c.      Both A and B

d.     None of the above

(Ans: b)

81-Keynes believed that the equality between savings and investment is brought about by:

a.      Rate of interest

b.     Changes in income

c.      Availability of capital

d.     Marginal efficiency of investment

(Ans: b)

82-Which among the following is NOT an assumption of Pareto optimality?

a.      Every consumer wishes to maximize his level of satisfaction.

b.     All the factors of production are used in the production of every commodity.

c.      Conditions of perfect competition exist making all the factors of production perfectly mobile

d.     The concept of utility is cardinal and cardinal utility function of every consumer is given.

(Ans: d)

83-“Money is a matter of functions four, a medium, a measure, a standard and _______”. What is the fourth function of money indicated in this popular phrase?

a.      A stock

b.     A flow

c.      A store

d.     A payment

(Ans: c)

84-Which of the following measure of the high-power money supply (H) has been used by RBI of India

a.      Currency held by the public + Other deposits with the RBI

b.     Cash reserves of the commercial banks + Other deposits with the RBI

c.      Currency held by the public + cash reserves of the commercial banks + other deposits with the RBI

d.     Currency held by the public + cash reserves of the commercial banks + Time deposits of the commercial banks + other deposits with the RBI

(Ans: c)

85-Broad Money (M3) constitutes currency with public plus demand deposits with banks plus time deposits with bank plus _______

a.      Other deposits with the RBI

b.     Post office deposits

c.      Government deposits with RBI

d.     Bankers deposits with RBI

(Ans: a)

86-For measuring the changes in the price level of the country, which among the following index number is used

a.      Cost of living index number

b.     Production index number

c.      Security Price index number

d.     Whole sale price index number

(Ans: d)

87-The Heckscher-Ohlin approach to international trade provides important insights, in

a.      Gains from trade

b.     Effect of trade on production and consumption

c.      Effect of trade on the incomes of production factors

d.     All of the above

(Ans: d)

88-Under free exchange markets the rate of foreign exchange is determined by:

a.      Balance of Payments theory

b.     Mint par theory

c.      Purchasing power parity theory

d.     None of the above

(Ans: a)

89-When national income is calculated with reference to a base year, it is called:

a.      Nominal national income

b.     Net national income

c.      Real national income

d.     Gross national income

(Ans:c)

90-Isoguants are right angled only when:

a.      Factors are perfect substitutes

b.     Factors are neutral

c.      Factors are perfect complements

d.     Factors are scarce

(Ans:c)

91-Which of the following is known as long run average cost curve?

a.      Learning curve

b.     Envelope curve

c.      Equal product curve

d.     Phillips curve

(Ans:b)

92-Identify which of the following is NOT a correct match?

a. World Bank	provides loans for reconstruction and development of economies
b. IMF	helps in correcting balance of payments
c. RBI	provides technical consultancy to Asian countries
d. WTO	Generally forbids the use of quantitative restrictions on trade

(Ans: c)

93-In a perfectly competitive market a firm in the long run will be in equilibrium when:

a.      AC =MC

b.     AR = MR

c.      MR = MC

d.     P=AR=MR=AC=MC

(Ans: d)

94-Which market structure symbolizes the existence of ‘few sellers’?

a.      Oligopoly

b.     Monopoly

c.      Monopolistic competition

d.     Perfect competition

(Ans:a)

95-Which of the following is a characteristic of capital as a factor of production?

a.      It never depreciates

b.     It is fixed in supply

c.      It is an active factor of production

d.     It is a passive factor of production

(Ans: d)

96-By Parallel economy is meant an economy:

a.      Which runs side by side of the existing economy?

b.     Which has the same characteristics as the main economy?

c.      Which has variety of parallel businesses?

d.     Which has plentiful of black money?

(Ans: d)

97-On which law of consumption the concept of consumer’s surplus is based?

a.      Engel’s law

b.     Law of demand

c.      First law of Gossen

d.     Second law of Gossen

(Ans: c)

98-Which among the following has not been a measure adopted by the government to unearth black money in India?

a.      Voluntary Disclosure schemes

b.     Demonetization of currency

c.      Special Bearer Bond Scheme

d.     Creating civic consciousness

(Ans: d)

99-Trace the mismatch between the policy and its year of announcement in the pairs given below:

a. National Water Policy	2002
b. New National Forest policy	1999
c. New National Mineral policy	2009
d. National Population Policy	2012

Ans: d

100-Which among the following are the factors that determine the national income of a country?

a.      Quantity and Quality of factors of production

b.     The state of technical knowledge

c.      Economic and political stability

d.     All of the above

(Ans: d)