Elements of Economic Theory
(EET)
MCQs
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(1) The characteristic/s of human wants is/are
(A) Recurring
(B) Complementary
(C) Competitive
(D) All of the above
(2) The problem of scarcity __________
(A) Exists because of limited resources
(B) Arises only in poor countries
(C) Will eventually be completely removed
(D) Exists because the prices of goods are two low
(3) When a re-allocation of resources between sectors increases the output of some sectors without reducing the output of the remaining sectors, _________ is said to have been achieved.
(A) Functional distribution
(B) Distributive efficiency
(C) Productive efficiency
(D) Equal allocation
(4) In ___________ equilibrium forces do not get sufficient time to bring about complete adjustment.
(A) Short run
(B) Long run
(C) Both a and b
(D) None of the above
(5) According to Spencer and Siegelman, Business Economics is the integration of economics theory with business practice for the purpose of facilitating____________.
(A) Forward and backward linkages
(B) Decision making & forward planning
(C) Monetary policy formulation
(D) Central planning of the economy
(6) State of Equilibrium can be illustrated by _______
(A) The peak point of supply curve
(B) The point of lowest price
(C) The lowest point of demand curve
(D) The intersection of Demand and Supply Curve
(7) If the price of a commodity is distributed due to some external forces and after having been distributed tends to resume its original positions, it is a case of _______ equilibrium
(A) Short run equilibrium
(B) Unstable
(C) Stable
(D) Neutral
(8) Which of the following is an example of Durable Goods?
(A) Refrigerator
(B) Eggs
(C) Talk time in mobile phone
(D) Toothpaste
(9) Transformation of a wooden log into a piece of furniture is a case of creation of _______
(A) Form utility
(B) Place utility
(C) Time utility
(D) Service
(10) The type of behavior assumed in economics from an individual is
(A) Irrational
(B) Rational
(C) Indifferent
(D) Emotional
(11) Diamonds have ___________
(A) High value in exchange
(B) High value in use as well as in exchange
(C) High value in use exchange
(D) High value in use and low value in
exchange
(12) Storing a commodity and selling it at a time of scarcity is a case of __________ utility.
(A) Form
(B) Place
(C) Time
(D) Negative
(13) For efficient accomplishment of price signaling ________ is needed.
(A) Stable monetary policy
(B) Government intervention
(C) Stable trade policy
(D) Stable fiscal policy
(14) A house maker cooking for his family ______________
(A) Is an economic activity
(B) Has a price tag
(C) Is a wasteful activity
(D) Is a non-economic activity
(15) Which of these is/are the attribute/s of wealth
(A) Possesses utility
(B) Scarce
(C) Transferable
(D) All of the above
(16) Marshall's idea on the study of economics was mainly as
(A) Science of material welfare
(B) Science of scarcity
(C) Science of wealth
(D) All of the above
(17) In the Robbins definition of Economics, the term 'end' refers to
(A) End of production process
(B) Human wants
(C) Scarcity of resources
(D) End use of Alternative resources
(18) 'Wealth of Nations' was written by
(A) Lionel Robbins
(B) Adam Smith
(C) Keynes
(D) Robert Lucas
(19) Which of these is not a basic economic problem?
(A) For whom to produce
(B) High population
(C) What to produce
(D) How to produce
(20) Capital goods are also known as ___________
(A) Second order goods
(B) Producers goods
(C) Produced factor of production
(D) All of the above
(21) "Economics is what Economists do" is a definition of economics given by
(A) Ely
(B) Friedman
(C) Adam Smith
(D) Jacob Viner
(22) Any point on the PPC signifies
(A) Full utilization of resources
(B) Equal production of two goods
(C) Equilibrium point
(D) None of the above
(23) Assertion (A) - Prices of the crucial role in determining an efficient distribution of resources.
Assertion (B) - Price acts as a signals for shortages and surpluses which help firms to respond to changing market conditions.
(A) Only A is true
(B) Only B is true
(C) Both A and B are true
(D) Neither of them is true
(24) Wealth is ________ where, income is _________
(A) a flow, a stock
(B) Money, an asset
(C) a stock, a flow
(D) The yield, the source
(25) Which of the following statements is correct?
(A) Analysis excludes the time element
(B) The static method is much difficult and complex to work out than dynamic method
(C) Static analysis excludes the time element
(D) States method applies to microeconomics while dynamic method relates to Macro-economics
(26) The service of a doctor to his patient is a _________
(A) Material good
(B) Capital good
(C) Non-material good
(D) Social service
(27) In free market the price of a commodity is determined by _______
(A) Supply and demand
(B) Supply
(C) Demand
(D) Government
(28) Economic growth is best depicted by
(A) Upward movement on the given PPC
(B) Outward shift of PPC
(C) Inward Shift in PPC
(D) Downward movement on the given PPC
(29) The most common shape of the PPC is ____________
(A) Downward sloping straight line
(B) Downward sloping convex to the origin
(C) Downward sloping concave to the origin
(D) Upward sloping
(30) Which of the following is NOT true of Business Economics?
(A) It is Practical in its outlook
(B) It is a Positive Economics
(C) It uses knowledge of Macro Economics for better decision making
(D) It is Micro Economic in nature
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