Question 1

The want satisfying power of a commodity:
A)satisfaction
B)utility
C)value
D)marginal utility

Accepted Answer

The want satisfying power of a commodity is referred to as its utility. This concept is fundamental in economics, indicating how a good or service can fulfill a consumer's needs or desires.

Question 2

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

Accepted Answer

The supply curve typically represents a direct relationship between quantity and price, meaning as the price increases, the quantity supplied also increases.

Question 3

Laws of return shows ---------production function.
A)short-term
B)medium term
C)long term
D)annual

Accepted Answer

Laws of return typically apply to the short-term production function, where at least one factor of production is fixed.

Question 4

In classical theory the level of employment is a function of:
A)price level
B)money wage rate
C)quantity of money
D)real wage rate

Accepted Answer

In classical theory, the level of employment is determined by the real wage rate. Classical economists believe that the labor market will always clear, meaning supply and demand for labor will equate, and this equilibrium is achieved through adjustments in the real wage rate.

Question 5

Consumption of capital good in the process of production is called as:
A)capital consumption
B)depreciation
C)decay of capital
D)none of the above

Accepted Answer

Depreciation is the correct term used to describe the consumption of capital goods in the process of production. It refers to the wear and tear, obsolescence, or reduction in the value of capital assets over time as they are used in the production process.

Question 6

Economic Laws are:
A)statement of tendencies
B)exact and predictable
C)definite
D)none

Accepted Answer

Economic laws are considered statements of tendencies because they describe general patterns or tendencies in economic behavior rather than exact and predictable outcomes. They are not as precise as laws in the natural sciences due to the complexity and variability of human behavior and economic systems.

Quiz 8: Understanding Economic Concepts and Theories

The want satisfying power of a commodity:

Supply curve represents -------- relationship between quantity and price.

Laws of return shows ---------production function.

In classical theory the level of employment is a function of:

Consumption of capital good in the process of production is called as:

Economic Laws are: