Tag: the government and economic development

Questions Related to the government and economic development

The consumer surplus of a product represent.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Excess of demand price over price paid

  2. Excess of price over cost of production

  3. Excess of demand price of equilibrium price

  4. Demand price minus taxes

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Correct Option: A

The difference between what the consumer is prepared to pay and what the actually pays is called ________.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Producer surplus

  2. Consumer surplus

  3. Normal profit

  4. Abnormal profit

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Correct Option: B

Shortage of supply of goods would cause ________.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Equilibrium price to rise

  2. Equilibrium price to fall

  3. Equilibrium price to remain same

  4. Cost of production to go up

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Correct Option: A

EPCG stands for ______________.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Export Promotion Capital Goods

  2. Expert Programmes for Credit Generation

  3. Exchange Programme for Consumer Goods

  4. Export Promotion Consumer Goods

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Correct Option: A
Explanation:

EPCG stands for Export Promotion Capital Goods. This is a scheme provided by the government of India for importers and exporters to promote exports. 

When a market is in equilibrium_________.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. No shortages exist

  2. Quantity demanded equals Quantity supplied

  3. A price is established that clears the market

  4. All of the above are correct

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Correct Option: D
Explanation:

When market is in equilibrium there is a balance of quantity demanded and quantity supplied are the same. Hence, because quantity demanded = quantity supplied there are no shortages in the market and the price is fixed which clears the market. 

Consumer has no consumer surplus on _______ of the commodity consumed.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. first unit

  2. second unit

  3. all units

  4. last unit

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Correct Option: D
Explanation:

Consumer has no consumer surplus on last unit of the commodity consumed. This is because consumer surplus is based on the law of diminishing marginal utility. According to this law, the Marginal utility/satisfaction of the consumer goes on decreasing with every additional consumption of the commodity. Hence, it is because of this law that the consumers willingness to pay for additional unit goes on diminishing and there is no consumer surplus on the last unit. 

When a large firm takes up advertising and grants margin to distribution, it is called.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Technical economics.

  2. Managerial economics.

  3. Marketing economics.

  4. Financial economics.

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Correct Option: C
Explanation:

When large firm takes up advertising and grants margin to distribution its called as market economics. Market economics facilitates sale and purchase of goods and services in the open market. 

In the situation of market equilibrium:

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Market demand = Market supply.

  2. Market demand > Market supply.

  3. Market demand < Market supply.

  4. none of the above

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Correct Option: A
Explanation:

At equilibrium level market demand is equal to market supply. This is the state where the market forces of demand and supply are same and there can be no change in the price. This is the state where the ideal market price is achieved. 

The minimum assured price offered by the government to the farmers for the purchase of their output is called____________.

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. ceiling price.

  2. equilibrium price.

  3. support price.

  4. market price.

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Correct Option: C
Explanation:

The minimum assured price offered by the government to the farmers for the purchase of their output is called support price. This helps the farmers to get adequate remuneration for their crop yield. It saves the customers from losses. 

Supply being perfectly inelastic, what will be the effect of increase or decrease in demand on price and equilibrium quantity?

business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

  1. Price increases or decreases respectively.

  2. No effect on equilibrium quantity.

  3. Both (a) and (b).

  4. None of the above

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Correct Option: C
Explanation:

In case of perfectly inelastic demand the change in price will have no effect on the quantity demanded. The consumers do not change their demand due to the change in price. This usually is seen in case of necessities. Hence, the equilibrium quantity will be same the price might increase or decrease.