Deck 6: Economic Theory and Methodology: Exploring the Fundamentals of Economics

Question 1

Adam Smith, the father of modern economic theory, defined economics as a subject, which is mainly concerned with the study of nature and causes of generation of

A)wealth
B)welfare
C)hipness
D)scarcity

Answer 1

wealth

Question 2

introduced the concept of welfare in the study of economics:

A)fischer
B)alfred marshall
C)j s mill
D)adam smith

Answer 2

alfred marshall

Question 3

Who defined economics as: a science which studies human behavior as a relationship between ends and scarce means which have alternative uses:

A)j b say
B)alfred marshall
C)david ricardo
D)robbins

Answer 3

robbins

Question 4

The problem of scarcity and choice making can be depicted using the tool of curve.

A)demand
B)isoquant
C)indifference
D)production possibility

Question 5

Macroeconomicsis primarily concerned with aggregates. Which of the following is not a macroeconomic aggregate?

A)decision making by a household
B)the unemployment rate, and inflation levels
C)national income
D)the supply of money

Question 6

Scientific attempts to describe economic relationships are :

A)factual and can never be wrong
B)accurate ways to predict political viewpoints
C)known as positive economics
D)directed at the fairness of social programs

Question 7

The method consistsin deriving conclusionsfrom general truths, takesfew general principles and applies them draw conclusions.

A)inductive
B)deductive
C)empirical
D)scientific

Question 8

is a term referring to an intellectual controversy over epistemology, research methodology between Carl Menger, and Gustav von Schmoller.

A)methodenstreit
B)laissez-faire
C)cetris paribus
D)quid proquo

Question 9

Inductive method which also called empirical method was adopted by the:

A)marginalist school
B)mercantilists
C)physiocrats
D)historical school of economists

Question 10

Decisions made in households, firms, and government are the focus of:

A)positive economic
B)microeconomics
C)normative economics
D)macroeconomics

Question 11

Knowledge used to combine resources productively is called:

A)comparative advantage
B)capitalism
C)entrepreneurship
D)technology

Question 12

Economic efficiency for the entire economy requires that :

A)potential gains to anyone necessitate losses to another
B)all goods be produced at their lowest possible opportunity costs
C)maximum-valued output is obtained from given resource
D)all of the above

Question 13

Theories are:

A)much more complicated than common sense
B)scientific only if based on normative value judgments
C)proven if only a few unimportant exceptions exist
D)developed when we collect data, try to explain how things work, and then

Question 14

Division of Labour is limited by the extent of:

A)supply
B)demand
C)price
D)market

Question 15

Milton Friedman restated the :

A)labour theory
B)profit theory
C)quantity theory of money
D)wage theory

Question 16

If the value of a variable varies as a consequence of the variation in the value of some other variable, it is called:

A)exogenous variable
B)endogenours v ariable
C)stock
D)flow

Question 17

Which of the following concepts are most closely associated with J.M. Keynes?

A)control of the money supply
B)marginal utility theory
C)indifference curve analysis
D)marginal efficiency of capital

Question 18

Which of the following is an example of economic overhead?

A)schools
B)roads and railwlays
C)sanitary facilities
D)hospitals