Question 1

Of 'real wages' and 'money wages'&#10;A)The former is a wider concept than the latter&#10;B)The latter is a wider concept than the former&#10;C)Both concept mean the same thing&#10;D)All of the above

Accepted Answer

Real wages refer to the purchasing power of wages, i.e., the quantity of goods and services that can be bought with a given amount of money wages, making it a broader concept that accounts for inflation and cost of living, unlike money wages which only refer to the nominal amount of money earned.

Question 2

The concept of Quasi-rent mean&#10;A)The rent to the workers&#10;B)The rent shared by the Landlord and workers&#10;C)The interest paid to the entrepreneur&#10;D)The return to a factor of production which is fixed in supply in the short period

Accepted Answer

Quasi-rent refers to the return to a factor of production that is temporarily fixed in supply in the short run, generating earnings above its opportunity cost due to its inelastic supply.

Question 3

The return to a factor of production which is fixed in supply in the short period is called&#10;A)Scarcity rent&#10;B)Economic rent&#10;C)Quasi-rent&#10;D)Contractual rent

Accepted Answer

Quasi-rent&#10;

Question 4

The marginal productivity theory of distribution was firstly formulated in its complete form by&#10;A)Adam Smith&#10;B)J. S. Mill&#10;C)J. B. Clark&#10;D)David Ricardo

Accepted Answer

The marginal productivity theory of distribution, which explains how the prices of factors of production are determined, was first fully formulated by J. B. Clark.

Question 5

The 'iron law of wages' is&#10;A)The wage-fund theory&#10;B)The marginal productivity theory of wages&#10;C)Collective bargaining&#10;D)The subsistence theory of wages

Accepted Answer

The 'iron law of wages' is associated with the subsistence theory of wages, which suggests that wages naturally tend to a level just sufficient to keep workers alive and able to work.

Question 6

According to Prof Knight, profit is the reward for&#10;A)Innovation&#10;B)Capital&#10;C)Foreseeable risks&#10;D)Uncertainty bearing

Accepted Answer

According to Prof. Frank H. Knight, profit is primarily seen as the reward for bearing uncertainty, not just for innovation, capital, or foreseeable risks. Knight distinguished between risk (which can be quantified and thus insured against) and true uncertainty, which cannot be accurately measured or fully anticipated.

Question 7

The uncertainty-bearing theory of profit was propounded by&#10;A)F. H. Knight&#10;B)F. B. Hawley&#10;C)P. A. Samuelson&#10;D)Joseph Schumpeter

Accepted Answer

F. H. Knight propounded the uncertainty-bearing theory of profit, which suggests that profit is the reward for bearing uncertainty in business.

Question 8

Which of the following is not included in the assumptions of Clark's marginal productivity of distribution&#10;A)Perfect competition&#10;B)Constant population&#10;C)Constant amount of capital&#10;D)Labour is heterogeneous

Accepted Answer

Clark's marginal productivity theory of distribution assumes perfect competition, a constant population, and a constant amount of capital. It does not assume labor is heterogeneous; instead, it typically assumes labor is homogeneous for simplification.

Question 9

Marginal productivity theory is also called&#10;A)Real theory&#10;B)Classical theory&#10;C)Monetary theory&#10;D)None of the above

Accepted Answer

Marginal productivity theory is also known as the real theory because it explains how the distribution of income is determined by the productivity of the factors of production in real terms, without focusing on monetary aspects.

Question 10

Subsistence theory of wages was used by&#10;A)Karl Marx&#10;B)Robinson&#10;C)J. S. Mill&#10;D)David Ricardo

Accepted Answer

David Ricardo is associated with the subsistence theory of wages, which suggests that wages tend to gravitate towards the minimum level necessary for workers to sustain their basic needs.

Question 11

Profit is also known as&#10;A)Contractual rent&#10;B)Residual income&#10;C)Net income&#10;D)None of the above

Accepted Answer

The answer of Profit is also known as&#10;A)Contractual rent&#10;B)Residual income&#10;C)Net...

Question 12

Changes in the rate of interest affect the amount of money held for&#10;A)transaction motive&#10;B)precautionary motive&#10;C)speculative motive&#10;D)normal motive

Accepted Answer

The answer of Changes in the rate of interest affect...

Question 13

The marginal productivity theory of distribution is associated with&#10;A)Adam Smith&#10;B)Lionel Robbins&#10;C)J. B. Clark&#10;D)Bergson

Accepted Answer

The answer of The marginal productivity theory of distribution is...

Question 14

Who has contributed the modem theory of interest rate determination?&#10;A)Paul A. Samuelson&#10;B)Gunnar Myrdal&#10;C)Knut Wicksell&#10;D)J.R. Hicks

Accepted Answer

The answer of Who has contributed the modem theory of...

Question 15

Whose name is associated with the &#34;Uncertainty-bearing theory of profit&#34;?&#10;A)J. Schumpeter&#10;B)F.H. Knight&#10;C)J.B. Clark&#10;D)F.W. Watker

Accepted Answer

The answer of Whose name is associated with the &#34;Uncertainty-bearing...

Question 16

Who has sought to measure Consumer's Surplus with the help of indifference curve technique?&#10;A)Edgeworth&#10;B)Alfred Marshall&#10;C)J.R. Hick&#10;D)Pareto

Accepted Answer

The answer of Who has sought to measure Consumer's Surplus...

Question 17

Which among the following is NOT an assumption of Pareto optimality?&#10;A)Every consumer wishes to maximize his level of satisfaction.&#10;B)All the factors of production are used in the production of every commodity.&#10;C)Conditions of perfect competition exist making all the factors of production perfectly mobile&#10;D)The concept of utility is cardinal and cardinal utility function of every consumer is given.

Accepted Answer

The answer of Which among the following is NOT an...

Question 18

When a firm's average revenue is equal to its average cost, it gets ________.&#10;A)Sub normal profit&#10;B)Normal profit&#10;C)Abnormal profit&#10;D)Super profit

Accepted Answer

The answer of When a firm's average revenue is equal...

Question 19

Given the price, if the cost of production increases because of higher price of raw materials, the supply&#10;A)Decrease&#10;B)Increase&#10;C)Remains the same&#10;D)Any of the above

Accepted Answer

The answer of Given the price, if the cost of...

Question 20

Under __________________, price is determined by the interaction of total demand and total supply in the market.&#10;A)Perfect competition&#10;B)Monopoly&#10;C)Imperfect competition&#10;D)Monopolistic Competition

Accepted Answer

The answer of Under __________________, price is determined by the...

Question 21

Standard of living of workers depends upon their&#10;A)Nominal wages&#10;B)Real wages&#10;C)Average product&#10;D)Govt. policy

Accepted Answer

The answer of Standard of living of workers depends upon...

Question 22

Under Marginal productivity Theory, reward for labour is determined by&#10;A)Owner&#10;B)Labour&#10;C)Government&#10;D)Marginal Product

Accepted Answer

The answer of Under Marginal productivity Theory, reward for labour...

Question 23

The economist Ricardo argued that prices were _____ because land rents were _______&#10;A)High, High&#10;B)Low, Low&#10;C)Low, High&#10;D)High, Low

Accepted Answer

The answer of The economist Ricardo argued that prices were...

Question 24

As for the cost of production of an individual farmer, the rent paid by him&#10;A)Enters into the price of his product&#10;B)None of these&#10;C)Does not enter into price of his product&#10;D)Is unjustified

Accepted Answer

The answer of As for the cost of production of...

Question 25

He presented a theory of rent&#10;A)Malthus&#10;B)Prof. Knight&#10;C)Ricardo&#10;D)Marshall

Accepted Answer

The answer of He presented a theory of rent&#10;A)Malthus&#10;B)Prof. Knight&#10;C)Ricardo&#10;D)Marshall...

Deck 1: Economic Concepts and Theories