Question 1

Which of the following is NOT an economic theory of Ricardo's discussed in this article?
A)Economic Rent
B)Comparative Advantage
C)Division of Labor
D)All of the concepts listed can be contributed

Accepted Answer

David Ricardo is well-known for his theories on Economic Rent and Comparative Advantage, but the Division of Labor is more closely associated with Adam Smith, not Ricardo.

Question 2

The concept Industrial Reserve Army is introduced by
A)Turgot
B)Karl Marx
C)Joan Robinson
D)J.S. Mill

Accepted Answer

Karl Marx introduced the concept of the Industrial Reserve Army, which refers to the unemployed and underemployed in capitalist society, serving to regulate wages and labor conditions.

Question 3

Who gives a welfare definition of economics?
A)Adam Smith
B)Alfred Marshall
C)Lionel Robbins
D)Paul Samuelson

Accepted Answer

Alfred Marshall is known for providing a welfare definition of economics, focusing on material welfare as the primary concern of economic activities.

Question 4

According to Ricardo, as an economy grows, the-------------------are the only group that would benefit.
A)Workers
B)Land-owners
C)Businessmen
D)None of the above

Accepted Answer

According to David Ricardo's theory of rent, as an economy grows, land becomes more in demand, which increases rent prices. This benefits land-owners, as they can charge more for the use of their land.

Question 5

The type of equilibirium that deals with the determination of price and quantity of only one
A)General equilibrium
B)Partial equilibrium
C)Zero Equilibrium
D)Pareto efficiency

Accepted Answer

The answer of The type of equilibirium that deals with...

Question 6

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to
A)the accumulation of capital
B)the division of labor
C)the perils of government
D)All of the above

Accepted Answer

Adam Smith uses the example of a pin factory in "The Wealth of Nations" to illustrate the concept of the division of labor, showing how it increases productivity and efficiency.

Question 7

The Classical theory did not provide any coherent theory of ------
A)Income distribution
B)Rent Thoery
C)Labor value theory
D)Profit

Accepted Answer

The answer of The Classical theory did not provide any...

Question 8

In Case the supply of a factor of production is fixed , its entire income will be -----
A)Economic Rent
B)Marginal rent
C)Rent
D)Profit

Accepted Answer

When the supply of a factor of production is fixed, its entire income is considered economic rent because it is a payment to a factor of production that is in perfectly inelastic supply.

Question 9

According to Adam Smith , employers earned profits due to ----------used by them
A)Land
B)Labor
C)Capital
D)Enterpreuer

Accepted Answer

Adam Smith believed that profits were earned by employers due to the capital they invested and used in their businesses.

Question 10

According the law of diminishing returns:
A)The marginal product of a variable factor
B)Marginal utility falls as more units of a product are consumed
C)The total product falls as more units of a variable factor
D)The marginal product eventually increases as more

Accepted Answer

The law of diminishing returns states that as additional units of a variable factor (like labor) are added to a fixed factor (like machinery), the marginal product of the variable factor will eventually decrease, not increase. This is because, after a certain point, the additional output gained from adding one more unit of the variable factor decreases, reflecting the essence of diminishing returns.

Question 11

Communist Manifesto was authored by:
A)Stalin
B)Karl Marx
C)Laski
D)George Bernard Shah

Accepted Answer

The Communist Manifesto was authored by Karl Marx, along with Friedrich Engels, in 1848. It is a foundational theoretical text in communist philosophy, politics, and economics.

Question 12

The book Principles of Economics was published in the year
A)1776
B)1932
C)1890
D)1936

Accepted Answer

The book "Principles of Economics" was published in 1890 by Alfred Marshall, marking a significant contribution to the field of economics.

Question 13

The main focus of Karl Marx's work was on which of the following social elements?
A)The plight of the working class
B)Economics of the upper class
C)Worker\s conditions in factories
D)Gender equality

Accepted Answer

The answer of The main focus of Karl Marx's work...

Question 14

Which two philosophers developed the principal concept of Marxism?
A)Marx and Engels
B)Marx and Aristotle
C)Marx and Adam
D)Plato and Aristotle

Accepted Answer

Marxism is named after Karl Marx, and Friedrich Engels co-developed its principal concepts, making them the correct pair.

Question 15

Walras' law implies that if there are N markets, we only need to find equilibrium prices in
A)N-1 markets.
B)N-2 markets.
C)all markets
D)N-3 markets

Accepted Answer

Walras' law states that if N-1 markets are in equilibrium, then the Nth market must also be in equilibrium. Therefore, finding equilibrium prices in N-1 markets is sufficient.

Question 16

The Fisher effect .
A)States that nominal interest rates are equal to the real interest rates plus the expected inflation rate
B)States that nominal interest rates are equal to real interest rates minus the expected inflation rate
C)Predicts that as the expected inflation rate rises, so do nominal interest rates
D)Predicts that as the expected inflation rate rises, real interest rates fall

Accepted Answer

The answer of The Fisher effect .
A)States that nominal interest...

Question 17

If you want a 4% real interest rate and the expected inflation rate is 3%, you should set the
A)1%
B)4%
C)7%
D)20%

Accepted Answer

To achieve a 4% real interest rate when the expected inflation rate is 3%, you should set the nominal interest rate at 7%. This is because the real interest rate is approximately the nominal interest rate minus the inflation rate (Real Interest Rate ≈ Nominal Interest Rate - Inflation Rate).

Question 18

The average number of times that a dollar is spent in buying the total amount of final goods and
A)gross national product
B)the spending multiplier
C)the money multiplier.
D)Velocity

Accepted Answer

The average number of times that a dollar is spent in buying the total amount of final goods and services produced within a country in a specific period of time is referred to as the velocity of money. This concept is distinct from the gross national product, the spending multiplier, and the money multiplier, which relate to different economic measures and mechanisms.

Question 19

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to
A)the accumulation of capital
B)the division of labor
C)the perils of government regulation
D)All of the above

Accepted Answer

Adam Smith uses the example of a pin factory to illustrate the concept of the division of labor, showing how it increases productivity and efficiency in manufacturing processes.

Question 20

Ricardo Theory Of Rent is based on ------ reasoning
A)Deductive
B)Empirical
C)illogical
D)Inductive

Accepted Answer

Ricardo's Theory of Rent is based on deductive reasoning, where he starts with a general principle about land scarcity and productivity to explain rent determination.

Quiz 1: Economic Theories and Concepts

Which of the following is NOT an economic theory of Ricardo's discussed in this article?

The concept Industrial Reserve Army is introduced by

Who gives a welfare definition of economics?

According to Ricardo, as an economy grows, the-------------------are the only group that would benefit.

The type of equilibirium that deals with the determination of price and quantity of only one

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to

The Classical theory did not provide any coherent theory of ------

In Case the supply of a factor of production is fixed , its entire income will be -----

According to Adam Smith , employers earned profits due to ----------used by them

According the law of diminishing returns:

Communist Manifesto was authored by:

The book Principles of Economics was published in the year

The main focus of Karl Marx's work was on which of the following social elements?

Which two philosophers developed the principal concept of Marxism?

Walras' law implies that if there are N markets, we only need to find equilibrium prices in

The Fisher effect .

If you want a 4% real interest rate and the expected inflation rate is 3%, you should set the

The average number of times that a dollar is spent in buying the total amount of final goods and

Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to

Ricardo Theory Of Rent is based on ------ reasoning