Deck 1: Economics: Definitions, Methods, and Concepts

Question 1

The curve showing the possibilities of production of desired good is known as:

A)indifference curve
B)production possibility curve
C)revealed preference curve
D)none of these

Answer 1

production possibility curve

Question 2

Which one of the following definition of Economics is associated with the name of Lionel Robbins?

A)welfare definition
B)scarcity definition
C)growth definition
D)wealth definition

Answer 2

scarcity definition

Question 3

A hypothesis is tested by:

A)the realism of its assumptions
B)the lack of realism of its assumptions
C)its ability to predict accurately an outcome that follows logically from the assumptions
D)none of these

Answer 3

its ability to predict accurately an outcome that follows logically from the assumptions

Question 4

In a free enterprise economy, the problems of what, how and for whom to produce are solved by :

A)a planning committee
B)the price mechanism
C)the planning commission
D)none of these.

Question 5

Who considered Political Economy as "an enquiry into the nature and causes of the wealth of nations"?

A)Adam Smith
B)J. B. Say
C)Marshall
D)Keynes

Question 6

Which of the following definitions of Economics include the economic concept of 'scales of Preferences'?

A)wealth definition
B)welfare definition
C)scarcity definition
D)growth definition

Question 7

Which of the following embodies a more widely accepted definition of economics?

A)science of material welfare
B)science of wealth
C)a study of mankind in the ordinary business of life
D)science of making choice.

Question 8

The fundamental problem faced by an economy is one of :

A)exchange
B)decision making by the government
C)economic welfare
D)scarcity of resources and multiplicity of wants.

Question 9

Production possibilities curve does not show:

A)what to produce
B)how to produce
C)for whom to produce
D)productive potential under conditions of underemployment

Question 10

State whether Economics is :

A)a positive science only
B)neither a positive science
C)a science but not art
D)a science or an art depending on who uses economics and for what purpose.

Question 11

Who of the following emphasized the normative aspect of Economics as a science?

A)the english classical school
B)Lionel Robbins
C)the german historical school
D)none of these.

Question 12

Of the following economists who is considered as master of partial analysis?

A)Alfred Marshall
B)A. C. Pigou
C)J. M. Keynes
D)J. S. Mill.

Question 13

Which of the following statements has been drawn by inductive method?

A)a consumer will buy from the cheapest market
B)all businessmen wish to buy at low price and sell at high price
C)a private firm will try to maximize its profits
D)the larger the stock of money with a person, the lower is the utility that he

Question 14

What is true for deductive method?

A)abstract
B)realistic
C)economic conditions assumed to be changing
D)supported by historical school.

Question 15

What is true for inductive method?

A)hypothetical
B)empirical
C)ignores experimentation
D)static

Question 16

Find out the correct statement:

A)prediction of economic models cannot be refuted by empirical evidence
B)models transform verbal expressions in to more scientific expressions
C)models make no assumptions
D)economic models are comprehensive and not partial

Question 17

Micro economic theory studies how a free enterprise economy determines:

A)the price of goods
B)the price of services
C)the price of resources
D)all of these.

Question 18

Which aspect of taxation involves normative economics?

A)the incidence of the tax
B)the fairness of the tax
C)the effect of the tax on incentives to work
D)all of the above

Question 19

Microeconomics deals primarily with:

A)comparative statics, general equilibrium and positive economics
B)comparative statics, partial equilibrium and normative economics
C)dynamics, partial equilibrium and positive economics
D)comparative statics, partial equilibrium and positive economics.

Question 20

Which of the following is incorrect?

A)microeconomics is concerned primarily with the problem of what , how and for whom to produce
B)microeconomics is concerned primarily with the economic behavior of individual decision making units when at equilibrium
C)microeconomics is concerned primarily with the time path and processes by which one equilibrium position evolves into another
D)microeconomics is concerned primarily with comparative statics rather than dynamics.

Question 21

Which of the following statements is most closely associated with general equilibrium analysis?

A)everything depends on everything else
B)the equilibrium price of a factor depends on the balancing of the forces of demand and supply for that factor
C)the equilibrium price of a good or service depends on the balancing of the forces of demand and supply for that good or service
D)none of these

Question 22

The meaning of the word 'economic' is most closely associated with the word:

A)free
B)scarce
C)unlimited
D)unrestricted

Question 23

Microeconomics studies the decision making behavior of:

A)society as a whole
B)an individual or household
C)a group of individuals
D)economy as a whole

Question 24

The word micro was first used in Economics by:

A)Keynes
B)Ragnar Frisch
C)J. R. Hicks
D)Marshall