Top Mcqs: Elements of Economic Theory Mcqs

Elements of Economic Theory

(EET)

MCQs

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1. Flatter the demand curve,

A. lower the price elasticity of demand

B. The lower the effect of a change in price on the demand for the good

C. Greater the price elasticity of demand

D. The more the seller would increase the price of the product to increase his revenue

2. Which of these supports the Law of Diminishing Marginal Utility?

A. There is a time gap in consumption

B. Unit examined is spoonful of water

C. Each successive unit of the good consumed is better than the previous

D. Consumption is continuous

3. State what is true of these demand and supply functions: SS_t = f(DD_t-1), SS_t =f(_Pt-1)

A. These equations represent static analysis of the market

B. These equations represent dynamic analysis of the market

C. These equations relate to short period

D. These equations do not take into account time element

4. If on the production possibility curve, the production of good X increases without any decrease in the production of good Y, it indicates

A. better utilization of resources

B. under utilization of resources

C. optimum utilization of resources

D. growth in the resources of the country

5. The degree of responsiveness of a variable to changes in another related variable is called _________.

A. Income elasticity

B. Elasticity

C. Cross elasticity

D. Price elasticity

6. A movement from left to right on a given production possibility curve indicates

A. increase in the production of the good measured on the Y axis and decrease in the production of the good measured on the X axis

B. growth in resources of the country

C. inefficency in the use of resources

D. increase in the production of the good measured on the X axis and decrease in the production of the good measured on the Y axis

7. Whose definition of economics includes the dynamic nature of the subject of economics?

A. Paul Samuelson

B. Lionel Robbins

C. Alfred Marshall

D. David Ricardo

8. Mobile phone internet data is a __________ good.

A. durable

B. free

C. non-durable

D. public

9. Consumer surplus is measured as

A. the area of the triangle formed at the equilibrium point on the demand curve

B. the area under the demand curve

C. total expenditure minus total utility

D. the area of the rectangle formed by the product of price and quantity demanded

10. According to Robbins, Economics is a _________.

A. Macro Science

B. Normative Science

C. Natural Science

D. Positive Science

11. Choose the correct option

Statement I: A seller can sell only as much as the supply he has on hand in the market period.

Statement II: A seller can sell only as much as the stock he has on hand in the market period.

A. Both statements are incorrect

B. Statement I is correct, Statement II is incorrect

C. Both statements are correct

D. Statement I is incorrect, Statement II is correct

12. Identify the odd one out.

A. Increase in the price of a complementary good

B. Increase in the size of the population

C. Increase in income of the consumer

D. Increase in the price of a substitute good

13. Which of these is a characteristic of a private good?

A. Its use by one person does not bar another person from using the same good.

B. Its ownership by one person includes the ownership by another person.

C. Its ownership by one person excludes ownership by another person

D. It has common ownership of the public.

14. Who of these has incorporated welfare aspect in the subject of economics?

A. Alfred Marshall

B. Lionel Robbins

C. Paul Samuelson

D. Adam Smith

15. A reasoning where we start with certain particular statements and conclude with a universal statement is called

A. Intensive Reasoning

B. Incentive Reasoning

C. Inductive Reasoning

D. Inducive Reasoning

16. Match the following:

1. Slope of a curve	i. Price elasticity of demand
2. Proportionate changes in price and demand for a good	ii. Consumer Surplus
3. Total utility less total expenditure on a good	iii. Downward sloping linear demand curve
4. Lower segment/Upper segment	iv. Vertical change/Horizontal change

A. 1-iv, 2-i, 3-iii, 4-ii

B. 1-iv, 2-i, 3-ii, 4-iii

C. 1-i, 2-iii, 3-ii, 4-iv

D. 1-iii, 2-i, 3-ii, 4-iv

17. Identify the odd one out.

A. Real Estate

B. Car

C. Gold

D. Shares

18. Identify the odd one out.

A. Table

B Chalk

C. Soap

D. Milk

19. Choose the correct option:

Statement 1: The Law of Diminishing Marginal Utility is based on the Law of demand

Statement II: The demand curve slopes downwards because of income and Substitution effect of a price-change

A. Both statements are correct

B. Statement I is incorrect and Statement II is correct

C. Statement I is correct and Statement II is incorrect

D. Both statements are incorrect

20. Which of these is most likely to have positive, negative and values?

A. Cross elasticity

B. Price elasticity

C. Advertisement elasticity

D. Supply elasticity

21. Which of these statements is correct?

A. A good is said to possess utility only if it is useful

B. Utility is the same as satisfaction

C. A good is said to possess utility even if it gives displeasure

D. A good is said to possess utility only if it gives pleasure

22. Which of these can have positive, negative and zero values?

A. Total Utility

B. Marginal Utility

C. Average Utility

D. All of the above

23. Which of these basic economic problems refers to the question of allocation of resources?

A. Why to produce?

B. How to produce?

C. For whom to produce?

D. What to produce?

24. Identify the odd one out

A. Free good

B. Economic good

C Market does not exist

D. Supply of the good exceeds its demand at all possible prices

25. Recurring, complementary and competitive are characteristics of

A. price

B. utility

C. human wants

D. value

26. Match the following:

1. Horizontal straight line demand curve	i. Giffen good
2. Positively sloped demand curve	ii. Perfectly elastic demand
3. Rectangular hyperbola demand curve	iii. Perfectly inelastic demand
4. Vertical straight line demand curve	iv. Unitary elasticity

A. 1-i, 2-ii, 3-iii, 4-iv

B. 1-ii, 2-i, 3-iv, 4-iii

C. 1-ii, 2-i, 3-iii, 4-iv

D. 1-iii, 2-i, 3-iv, 4-ii

27. Unitary price elasticity on all points on the demand curve is based on

A. Geometric method of price elasticity of demand

B. proportionate method of price elasticity of demand

C. Are method of price elasticity of demand

D. Total expenditure method of price elasticity of demand

28. Which of these statements is incorrect?

A. A Giffen good is one which has a negative price elasticity of demand

B. A good cannot be a Giffen good for all consumers at the same price and same income level

C. A Giffen good is one on which the consumer spends a large proportion of his income

D. A Giffen good is one which has a large negative income elasticity of demand

29. Identify the odd one out.

A. Marketable

B. Intangible

C. Non-transferable

D. Internal

30. Which of these is true?

A. Total Utility becomes negative on over consumption

B. Total Utility curve is positively sloped throughout

C. Average Utility is always constant

D. Marginal utility curve is always downward sloping