Tag: utility, value and price

Questions Related to utility, value and price

The broad purpose of price deals is _______________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. to sell more of the product

  2. to get more profit

  3. both (a) and (b)

  4. none of these

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Correct Option: A
Explanation:

Price deals mainly refers to reduction of the price of a product from its original MRP in order to maximize the sale ,as we know when the price of a product gets lower ,demand increase and thus the sales rise.

The internal factors which governing the prices are _________________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. The costs and the management policy

  2. The elasticity of demand and supply

  3. The goodwill of the company

  4. The government policy

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Correct Option: A
Explanation:

There are certain factors which govern the prices. Internal and external factors. Internal factors are the ones which are caused internally in the organization due to certain policies set by the firm. Thus the cost and management policies influence the prices. 

The fundamental elements in the price- setting process is ________________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. Cost data

  2. Demand elasticity

  3. Managerial ability

  4. Wages and Salaries

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Correct Option: A
Explanation:

The main element in the price-setting process of a product is the cost data of the product. This is because for any producer, it is first important to cover up the cost of making the good and then add a profit margin to set the appropriate price. Thus, it is important to cover the cost so that the firm does not incur a loss.

Real value of a commodity is ________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. the amount of other goods which have to be given up in order to get it.

  2. its exchange value

  3. its total utility

  4. its cost of production.

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Correct Option: A
Explanation:

At the time of barter system, commodities were exchanged for commodities. But after the introduction of money, the concept of opportunity cost came up where the real value of a commodity is measured in terms of the next best alternative that needs to be sacrificed to buy the commodity.

If the current price index of pulses is 295, what is the increase in prices of pulses in comparison to base years prices.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. 195%

  2. 295%

  3. 250%

  4. 195 times

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Correct Option: A

Which of the following is not a main approaches to Pricing of commodities.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. Classical Ecoomists

  2. Australian approach

  3. Marshall approach

  4. Neo-classical economist

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Correct Option: D

Which of the following method of constructing index number satisfies time reversal test.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. Laspeyres index

  2. Fishers Ideal index

  3. Paasches index

  4. All the three

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Correct Option: B

The paradox of value means that _____________________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. people are irrational in consumption choices

  2. the total utilities yielded by commodities do not necessarily have relationship to their prices

  3. value has no relationship to utility schedules

  4. free goods are goods that are essential to life.

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Correct Option: B
Explanation:

The paradox of value, also known as the diamond water paradox, is a contradiction which means that the total utilities yielded by commodities do not necessarily have relationship to their prices. We see that though water is available in abundance and it so useful and essential for survival yet it costs much lower than diamond which is just a luxury item costs much higher price in the market. This paradox discusses the concepts of value in use and value in exchange. The things which have the greatest value in use have little or no value in exchange; whereas those which have the greatest value in exchange have frequently little or no value in use.

When a relationship between DMU of a product and its prices is decided than it helps in determining __________.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. total marginal value of a product

  2. average utility of product

  3. price of product in market

  4. total utility value of product

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Correct Option: C
Explanation:

When the diminishing marginal utility is set in the market then that is compared with various prices in the market for the commodity which decides the ideal price for the commodity in the market which the consumer is willing to pay if they get required utility from the product. 

A capitalist economy uses_____as the principal means of allocating resources.

social science prices and cost of living value and price utility, value and price price rise/inflation

  1. Demand

  2. Supply

  3. Efficiency

  4. Prices

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Correct Option: D
Explanation:

In a capitalist economy, personal gains are given more preference than social welfare. Therefore, allocating of resources takes place on the basis of what value it will yield after production and this done through prices.