Tag: economics

Questions Related to economics

An inferior commodity is one which is consumed in smaller quantities when the income of consumer ________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. becomes nil

  2. remains the same

  3. falls

  4. rises

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Correct Option: D
Explanation:

The price of inferior goods are very cheap and usually associated with low levels of income. So when the consumer's income rises they try to consume normal good and when there income decreases they consume inferior goods. 

The supply of a good refers to the _________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Actual production of the good

  2. Total existing stock of the good

  3. Stock available for sale

  4. Amount of the good offered for sale at a particular price per unit of time

Show answer
Correct Option: D
Explanation:

The supply of a good refers to the amount of the good offered for sale at a particular price per unit(period) of time.

The goods which cannot be consumed more than once is known as________________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Durable good

  2. Non-durable good

  3. Producer good

  4. None of the above

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Correct Option: B
Explanation:

Non durable goods cannot be consumed more than once like bread, milk etc.

If, as people's income increases, the quantity demanded for a good decreases, the good is called___________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. A substitute

  2. A normal good

  3. An inferior good

  4. A complement

Show answer
Correct Option: C
Explanation:

In case of inferior goods, as income increases demand decreases $(Ey < 0)$.

As per the concept of increasing marginal opportunity cost, under the PPF theory, it can be interpreted that to produce more units of good X, ____________ of good Y have to be sacrificed.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. increasing units

  2. constant units

  3. decreasing units

  4. zero units

Show answer
Correct Option: A
Explanation:

The slope of the curve i.e. marginal opportunity cost which states that for production of every successive unit of butter we need to sacrifice more and more of guns because resource are use specific. 

Excise duties are levied on _______________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Incomes of the individual

  2. production of goods

  3. export and import of goods

  4. Incomes of the corporate

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Correct Option: B
Explanation:

Excise duties are type of taxes which are charged against the production og goods when they are sold in the market. 

If India exports goods worth Rs.$20$ crores and imports goods worth Rs.$30$ crores, it will ________________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. have a surplus of Rs$10$ crores in balance of trade

  2. have a deficit of Rs$10$ crores in balance of trade

  3. have a deficit of Rs$50$ crores in balance of trade

  4. can't say

Show answer
Correct Option: B
Explanation:

BOT =  export - Import i.e. $20 - 30 = 10$ crore deficit.

When Price = Rs. 20, quantity is demanded 9 units, and when Price = Rs. 19, quantity demanded is 10 units. What is the Marginal Revenue resulting from an increase in output from 9 units to 10 units?

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Rs. 20

  2. Rs. 19

  3. Rs. 10

  4. Rs. 1

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Correct Option: C
How are the two goods (apples and oranges) related when, as a result of rise in the price of apples, demand for oranges increases?
economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Substitute Goods

  2. Complementary Goods

  3. Normal Goods

  4. Inferior Goods

Show answer
Correct Option: A
Explanation:

A substitute good is a good that can be used in place of another. It is a good with a positive cross elasticity of demand.

This means a good's demand is increased when the price of another good is increased; both in the same direction.

For example, if apples and oranges are substitutes for a consumer, then if the price of apples increases, the consumer will buy less of apples and more of oranges. Thus, when price of apples increases, the demand for oranges will rise. 

Which of the following pairs represents substitute goods?
economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Car and petrol

  2. Juice and cold drink

  3. Bread and butter

  4. All of the above

Show answer
Correct Option: B
Explanation:

Juice and cold drinks can be taken in place of each other. Therefore,they are substitute goods as substitute goods are those goods where demand of one good rises when the price of another good gets increased.