MCQs on Economics -1

1. For downward movement along the iso-quant, MRTS of Labour per unit of capital (MRTSL,K) is given by
(A) – dK/dL
(B) dK/dL
(C) dL/dK
(D) – dL/dK

2. Charging a different price in different markets is called
(A) price discrimination
(B) second degree price discrimination
(C) third degree price discrimination
(D) perfect price discrimination

3. Which of the following is the most significant in stabilization policy ?
(A) Private investment
(B) Inventory investment
(C) Autonomous investment
(D) Public investment

4. The concept of vicious circle of poverty is associated with
(A) Kindleberger
(B) Schumpeter
(C) Ragnar Frish
(D) Gunnar Myrdal

5. Solow built his model as an alternative to
(A) Kaldor’s model of growth
(B) Ranis-Fei model of growth
(C) Harrod-Domar model of growth
(D) Meade’s model of growth

6. If interest payments are subtracted from gross fiscal deficit, the remainder will be
(A) revenue deficit
(B) gross primary deficit
(C) capital deficit
(D) budgetary deficit

7. Which of the following measures of central tendency will be the most appropriate to use if the data relate to rates, proportions and ratios ?
(A) Arithmetic mean
(B) Median
(C) Harmonic mean
(D) Geometric mean

8. Opportunity cost version of comparative cost advantage doctrine was introduced by
(A) J.M. Keynes
(B) Kindleberger
(C) Haberler
(D) Karl Marx

9. The most popular definition of sustainable development is given by
(A) World Development Report
(B) UNDP Report
(C) Brundtland
(D) IMF Report

10. During the planning period, highest growth rate was achieved during
(A) eighth plan
(B) tenth
(C) ninth plan
(D) seventh plan

11. A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to
(A) Zero
(B) Infinity
(C) Less than one
(D) One

12. Although a monopolist can charge any price he likes, but does not charge a higher price than his equilibrium price because
(A) higher price means fall in total revenue.
(B) higher price can be charged only on that segment of firm’s demand curve which is price inelastic implying that the marginal revenue will be negative.
(C) it is inconsistent with profit maximization goal under monopoly.
(D) marginal cost will be negative over the relevant range of output.

13. Which of the following conditions specify the least cost-output combination?
(A) PL/Pk = MRTS
(B) PL/Pk = MPL/MPk
(C) MPk/MPL = dL/dK
(D) All the above

14. Which of the following is not relevant in case of Sweezy’s oligopoly model?
(A) A price cut by a firm is followed by the price cut by the rival firms.
(B) Price hike is not followed by the rival firms.
(C) Firms do not react to price change made by one of the firms.
(D) Firms react to all kinds of price changes made by the rival.

15. Quasi rent is the reward to a factor of production which is
(A) Economic rent in the short run but transfer earnings in the long run.
(B) Transfer earnings in the short run.
(C) Transfer earnings both in the short and long run.
(D) Economic rent both in the short and long run.



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