Question 1

The horizontal supply curve parallel to quantity axis represents&#10;A)elastic supply&#10;B)inelastic supply&#10;C)perfectly elastic supply&#10;D)perfectly inelastic supply

Accepted Answer

A horizontal supply curve parallel to the quantity axis indicates that the supplier is willing to supply any quantity at a particular price, which is the definition of perfectly elastic supply.

Question 2

When output is zero, variable cost is --------&#10;A)maximum&#10;B)minimum&#10;C)infinity&#10;D)zero

Accepted Answer

Variable costs vary with the level of output. When there is no output, there are no variable costs, making them zero.

Question 3

Change in quantity supplied of a product can result from&#10;A)changes in own price&#10;B)changes in cost of production&#10;C)change in technology&#10;D)change in price of related products

Accepted Answer

Changes in the own price of a product directly affect the quantity supplied, as suppliers are typically willing to supply more at higher prices and less at lower prices, according to the law of supply. Changes in costs of production, technology, or prices of related products affect the supply curve itself, not just the quantity supplied at a given price.

Question 4

At prices above the equilibrium price&#10;A)quantity supplied exceeds quantity demanded&#10;B)quantity demanded exceeds quantity supplied&#10;C)there is shortage&#10;D)all of the above is possible

Accepted Answer

At prices above the equilibrium price, quantity supplied exceeds quantity demanded, leading to a surplus.

Question 5

When MC cuts AC, AC is at its ------------&#10;A)maximum&#10;B)minimum&#10;C)zero&#10;D)negative

Accepted Answer

When Marginal Cost (MC) cuts Average Cost (AC), AC is at its minimum. This is because the point where MC intersects AC from below is the point where AC starts to increase, indicating its minimum value at the intersection.

Question 6

Cost function relates cost to&#10;A)input&#10;B)output&#10;C)raw material&#10;D)machines

Accepted Answer

Cost function relates cost primarily to output, as it is a mathematical function that estimates the total cost of production given the quantity of output produced.

Question 7

An increase in market demand, supply remaining the same results in&#10;A)decrease in equilibrium price&#10;B)decrease in equilibrium quantity&#10;C)decrease in equilibrium price and increase in equilibrium quantity&#10;D)both equilibrium price and quantity rises

Accepted Answer

When market demand increases while supply remains constant, both the equilibrium price and quantity rise. This is because the higher demand pushes the price up as consumers are willing to pay more, and the quantity sold increases to meet this higher demand.

Question 8

There is no distinction between firm and industry in&#10;A)perfect competition&#10;B)monopoly&#10;C)monopolistic competition&#10;D)oligopoly

Accepted Answer

In a monopoly, there is no distinction between a firm and an industry because the single firm constitutes the entire market for its product, effectively making it the industry.

Question 9

A fall in the market demand, supply remaining the same results in&#10;A)increase in equilibrium price&#10;B)increase in equilibrium quantity&#10;C)increase in equilibrium price and decrease in equilibrium quantity&#10;D)both equilibrium price and quantity falls

Accepted Answer

A fall in market demand, with supply remaining constant, leads to a decrease in both equilibrium price and quantity. This is because the demand curve shifts leftward, indicating that at any given price, consumers now want to buy less of the good, leading to a lower equilibrium price and quantity.

Question 10

The cost of next best alternative is called&#10;A)marginal cost&#10;B)average cost&#10;C)opportunity cost&#10;D)direct cost

Accepted Answer

Opportunity cost refers to the cost of the next best alternative that is foregone when a decision is made to choose one option over another. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Question 11

When MC is greater than AC, AC&#10;A)rises&#10;B)falls&#10;C)maximum&#10;D)minimum

Accepted Answer

The answer of When MC is greater than AC, AC&#10;A)rises&#10;B)falls&#10;C)maximum&#10;D)minimum...

Question 12

Supply curve represents -------- relationship between quantity and price&#10;A)direct&#10;B)inverse&#10;C)either direct or inverse&#10;D)none of the above

Accepted Answer

The answer of Supply curve represents -------- relationship between quantity...

Question 13

National Income means:&#10;A)gnp at factor cost&#10;B)gnp at market price&#10;C)nnp at factor cost&#10;D)nnp at market price

Accepted Answer

The answer of National Income means:&#10;A)gnp at factor cost&#10;B)gnp at...

Question 14

The difference between GDP and NDP equals:&#10;A)transfer payments&#10;B)net indirect taxes&#10;C)net factor income from abroad&#10;D)depreciation

Accepted Answer

The answer of The difference between GDP and NDP equals:&#10;A)transfer...

Question 15

Which of the following is true?&#10;A)gnp + depreciation = nnp&#10;B)gnp = gdp + net factor income from abroad&#10;C)ndp = gnp minus net indirect taxes&#10;D)nnp = dgp minus depreciation

Accepted Answer

The answer of Which of the following is true?&#10;A)gnp +...

Question 16

Which of the following is not a method of national income estimation?&#10;A)matrix method&#10;B)income method&#10;C)expenditure method&#10;D)product method

Accepted Answer

The answer of Which of the following is not a...

Question 17

An accounting year in India is:&#10;A)calendar year&#10;B)academic year&#10;C)fiscal year&#10;D)none of these

Accepted Answer

The answer of An accounting year in India is:&#10;A)calendar year&#10;B)academic...

Question 18

Increase in real National Income (NI) means increase in:&#10;A)ni at current prices&#10;B)ni at constant prices&#10;C)both&#10;D)none of these

Accepted Answer

The answer of Increase in real National Income (NI) means...

Question 19

Net indirect taxes means:&#10;A)indirect taxes plus subsidies&#10;B)income minus taxes&#10;C)indirect taxes minus subsidies&#10;D)exports minus imports

Accepted Answer

The answer of Net indirect taxes means:&#10;A)indirect taxes plus subsidies&#10;B)income...

Question 20

Net factor income from abroad shows the difference between:&#10;A)gdp and ndp&#10;B)nnp and ndp&#10;C)gnp and gdp&#10;D)gnp and nnp

Accepted Answer

The answer of Net factor income from abroad shows the...

Question 21

Per capita income is equal to:&#10;A)population/national income&#10;B)national income/population&#10;C)national income/gdp&#10;D)nnp/gnp

Accepted Answer

The answer of Per capita income is equal to:&#10;A)population/national income&#10;B)national...

Question 22

National income in India is estimated by:&#10;A)rbi&#10;B)nsso&#10;C)cso&#10;D)world bank

Accepted Answer

The answer of National income in India is estimated by:&#10;A)rbi&#10;B)nsso&#10;C)cso&#10;D)world...

Question 23

The first estimate of National income in India was done by:&#10;A)k.n. raj&#10;B)v.k.r.v. rao&#10;C)dadabai naoroji&#10;D)p.c. mahalanobis

Accepted Answer

The answer of The first estimate of National income in...

Deck 4: Economics and National Income Estimation