Tag: economic mechanism

Questions Related to economic mechanism

Which of the following is an important ingredient of Selling Economies?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Advertising Economies

  2. Inventory Economies

  3. Transportation Economies

  4. Storage Economies

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Correct Option: A
Explanation:

Advertising Economies is an important ingredient of Selling Economies. Advertising helps to increase the sale of a product by encouraging buyers to buy more products or avail more services. 

As a result of Economic Reforms, Re-structuring, Mergers & Acquisitions of Companies, Business Process Re-engineering, processes have been ___________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Simplified

  2. Made more procedural

  3. Subject to Central Government approval in all situations

  4. None of the above

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Correct Option: A
Explanation:

As a result of Economic Reforms, Re-structuring, Mergers & Acquisitions of Companies, Business Process Re-engineering, processes have been simplified.

Economic reforms  are taken by the Indian government, which emphasized LPG model- liberalization, privatization and globalization.
Positive impact of Economic Reforms on the Indian Economy are :-a)Improvement in work culture

b) Increase in quality and cost consciousness
c)Increase in Value-Added Exports.

The consumer is in equilibrium at a point where the budget line.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Is above an indifference curve

  2. Is below an indifference curve

  3. Is tangent to an indifference curve

  4. Cuts an indifference curve

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Correct Option: C
Explanation:

The consumer is in equilibrium at a point where the budget line is tangent to an indifference curve, because it can not intersect the IC either from above or below.

After the initial stages of increasing returns to scale, the Firm will experience ________________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Still Increasing Returns to Scale

  2. Constant Returns to Scale

  3. Diminishing Returns to Scale

  4. None of the above

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Correct Option: B
Explanation:

In economic terms, constant returns to scale is when a firm changes its inputs with the results being exactly the same change in outputs (production). In other words, if a firm increases its inputs they will see a proportional increase in production (or outputs). 

The similar can be true if a firm decreases its inputs and that results in a proportional decrease in outputs. Constant returns to scale take place when increasing the number of inputs leads to an equivalent increase in the output.

 Thus, the correct option is B.

Which of the following statement is true?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Accumulation of capital depends solely on income

  2. Savings can also be affected by the State

  3. External economies go with size and internal economies with location

  4. The supply curve of labour is an upward slopping curve

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Correct Option: B
Explanation:

Since govt.  also earn income it can also effect savings.

When Total Revenue equals Economic Costs, it means that the firm________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Has No-profits-No-Loss

  2. Earns Normal Profits

  3. Earns more than Normal Profits (i.e. Super -Normal Profits)

  4. Incurs Looses in the accounting sense

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Correct Option: B
Explanation:

Accounting profit is the monetary costs a firm pays out and the income a firm receive. It is the accounting profit, and it is higher than economic profit. 

Accounting profit = total monetary revenue- total costs. 

Economic profit is the monetary costs and opportunity costs a firm pays and the revenue a firm receives.The level of profit that occurs when total revenue is equal to total cost. This stage indicates that a firm is doing just as well as it would have if it had selected to use its income to produce a different product or struggle in a different industry.

Common profit is also known as zero monetary profit.

Thus, the correct option is B.

An indifference curve slopes down towards right since more of one commodity and less of another result in.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Same satisfaction

  2. Greater satisfaction

  3. Maximum satisfaction

  4. Decreasing expenditure

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Correct Option: A
Explanation:

An indifference curve slopes down towards right since more of one commodity and less of another result same satisfaction to the consumer.

Internal Economies and Diseconomies arise due to ________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Overall industry-level changes

  2. Changes at the Firm level

  3. Both (a) and (b)

  4. Neither (a) nor (b)

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Correct Option: B
Explanation:

Internal Economies and Diseconomies arise due to changes at the Firm level.Internal Economies and Diseconomies in operations depend on the internal factors within the firm.
Internal Economies or diseconomies can be defined as a situatiion when the production of the firm gets affected because of the internal factors of the firm only.

If all inputs are trebled and the resultant output is doubled, this is a case of____________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Constant returns to scale

  2. Increasing returns to scale

  3. Diminishing returns to scale

  4. Negative returns to scale

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Correct Option: C
Explanation:
If all inputs are trebled and the resultant output is doubled, this is a case of diminishing returns to scale.
Diminishing return to scale can be defined as a situation when there is an increase in input causes a less proportional increase in output than the input. It is a type of effect which can be seen in the short run period when we increase inputs.

A decrease in the demand for cameras keeping other things the same results in ________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Increase the number of cameras bought

  2. Decrease the price but increase the number of cameras bought

  3. Increase the price of cameras

  4. Decrease the price and also the number of cameras bought

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Correct Option: D
Explanation:

Decrease in demand will decrease the price and quantity both.