Download CBSE Sample Paper 2024-25 for class 12th to 8th

Introduction to Microeconomics Test 24

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Introduction to Microeconomics Test 24

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Weekly Quiz Competition

Question 1
1 / -0

In the parlance of financial investment the term 'bear' denotes.

A
An investor who feels that the price of a particular security is going to fall

B
An investor also feels that the price of a particular share is going to rise

C
A shareholder or a bank holder who has an interest in a company, financial or otherwise

D
Any lender whether by making a loan or buying a bond
Question 2
1 / -0

Which of the following agencies of Indian Government implements the price support scheme (PSS)?

A
FCI

B
NAFED

C
Agriculture pricing agency of India

D
None of the above
Question 3
1 / -0

Which of the following is correct about the term 'ex-factory price'?

A
It is 'factory price' added with all indirect taxes of the centre and the state

B
It is the 'ex-showroom price' after deducting the weight of indirect taxes from it

C
It is 'factor cost' added with weight of current rate of inflation

D
None of the above
Question 4
1 / -0

Consider the following statements about the idea of 'micro-finance' in India and select the correct ones using the code give below:
1. Micro-finance is a small-scale financial intermediation, inclusive of savings, credit, insurance, business services and technical support provided to the needy borrower.
2. The thrust of the micro finance initiative is to channelize production and consumption credit in multiple does based on the absorption capacity of the prospective borrower.
3. It has evolved through following different models at different times - a 'charity based model' to a 'third-based model' and finally to the 'trust and creditworthiness model'.
4. It was in Australia where evolved the link between microfinance institutions and the formal financial institutions.

A
1,2 and 3

B
2,3 and 4

C
1,3 and 4

D
1,2,3 and 4

Solution

Micro-finance (MF) is a small-scale financial intermediation, inclusive of savings, credit, insurance, business services and technical support provided to the needy borrower. The thrust of the MF initiative is to channelize production and consumption credit in multiple doses based on the absorption capacity of the prospective borrower.

The presumption here is that the borrowers possess basic financial literacy and requisite capacity to operate their self-determined economic ventures profitably. The formal existence of MF was found in 1972. A charity based model (interest free loans where repayment was based on peer pressure) of MF was evolved in Ireland. Later on, in Germany, a thrift-based model was developed with establishment of savings funds.

Bangladesh Grameen model is based on the principle of trust and creditworthiness of poor with both, obligatory and voluntary saving schemes. The Foundation for Development Cooperation (FDC) of Australia evolved a research project, The Banking with the Poor (BWTP) network to link between microfinance with formal financial institutions.
Question 5
1 / -0

Which of the following statements(s) are true with respect to the concept of "efficient" as used in mainstream economic?
$$1$$. Efficiency occurs when no possible re-organisation of production can make anyone better off without making someone else worse off
$$2$$. An economy is clearly inefficient if it is inside the Production Possibility Frontier(PPF)
$$3$$. At a minimum, an efficient economy is on its Production Possibility Frontier(PPF)
$$4$$. The terms such as 'Pareto Efficiency', 'Pareto Optimality' and 'Allocative Efficiency' are all essentially one and same which denote 'efficiency in resource allocation'
Select the correct answer using the code given.

A
$$1$$ and $$4$$ only

B
$$1$$ and $$3$$ only

C
$$2$$ and $$3$$ only

D
$$1, 2, 3$$ and $$4$$

Solution

This question gives information about efficiency in resource allocation it is as below: 1)An efficient allocation of resources is: That combination of inputs, outputs such that any change in the economy can make someone better off only by making someone worse off .2) Pareto efficiency or Pareto optimality is a situation that cannot be modified so as to make any one individual or preference criterion better off without making at least or preference criterion worse off. 3) therefore above statement states that 'Pareto Efficiency', 'Pareto Optimality' and 'Allocative Efficiency' are all essentially one and same which denote 'efficiency in resource allocation'.
Question 6
1 / -0

Microeconomics does not focus on all of the following except

A
the effect of increasing money supply on inflation

B
the purchasing decisions that an individual consumer makes

C
the effect of an increase in GST on the sale of goods and services

D
the rate of GDP growth rate and employment

Solution

Micro economics deals with the study of economics from the view point of an individual unit. When economic problems are studied considering small economic units like an individual consumer, or an individual producer, we are referring to micro economics. Hence, correct answer is option B.
Question 7
1 / -0

The problems of customs union are generally studied under the headings of _________________ aspect.

A
Growth and Development

B
Welfare and Development

C
Welfare and Mechanism

D
Growth and Mechanism

Solution

Custom Union is an agreement between two or more countries to remove trade barriers and limit tariff. European Union is an example of custom Union. The problem and solution of custom union are studied under growth and mechanism. High trade leads of growth of the economy. High imports even leads to disequilibrium of BOP.
Hence, option D is correct.
Question 8
1 / -0

An example of positive economic analysis would be:

A
An analysis of the relationship between the price of food and the quantity purchased

B
Determining how much income each person should be guaranteed

C
Determining the fair price for food

D
Deciding how to distribute the output of the economy

Solution

This question gives example of positive economic analysis: Law of demand, which studies the relationship between the price of a good and the quantity purchased, is an apt example of positive economic analysis. This is because it is based on proven facts, that can be empirically tested and it now forms the basis for important microeconomic theories.
Question 9
1 / -0

What is production possibility frontier?

A
Combination of two or ore resources used in production

B
Combination of a good and a service when the resources are fully utilized

C
Combination of a good and a resource when the resources are fully utilized

D
Combination of two goods that can be produced when the resources are fully utilized

Solution

A production possibility frontier/Curve (PPF/PPC) shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed
Question 10
1 / -0

The collection of all the possible combinations produced from a given amount of resources is called _______.

A
production set

B
production possibility set

C
production possibility line

D
possible production group

Solution

The set of all non-negative outputs of goods and services that can be produced using the economy's available factor inputs. The output combinations on the frontier of this set correspond to the Pareto-efficient allocation of factor inputs, i.e. the allocation at which it is not possible, given the total factor endowment, to increase the production of one good without decreasing the production of some other good.