Introduction to Microeconomics Test 25

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Introduction to Microeconomics Test 25

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following statement would you consider to be a normative one?

A
Faster economic growth should result if an economy has a higher level of investment

B
Changing the level of interest rates is a better way of managing the economy than using taxation and government expenditure.

C
Higher level of unemployment will lead to higher level of inflation

D
The average level of growth in the economy was faster in the 1990s than the 1980s

Solution

A normative statement explains what should be base of the subject according to the belief through valued judgement that describes the fairness of the subject on public policy.
Therefore, 'Changing level of interest rate is a better way of managing the economy' is just a belief that change in interest rate will bring effectiveness in the economy.
Question 2
1 / -0

Indian industry faced the process of retrogression and deceleration because of ____________.

A
unsatisfactory performance of agriculture

B
slackening of real investment in public sector

C
narrow market for industrial goods, especially in rural areas

D
all of the above

Solution

Indian industry prior to 1991 was high dependent on the agricultural sector due to which industrial sector was very under rated. So due to poor performance of agriculture Indian economy was affected and due to less demand of industrial goods in the market real investment in public sector was affected too that added pillar to Indian economic situation.
Question 3
1 / -0

Production Possibilities (alternative)
A B C D E F
Hot pockets $15$ $12$ $9$ $6$ $2$ $0$
Eggs $0$ $6$ $11$ $15$ $18$ $20$
Referring to the table, in moving from point D to point C, the opportunity cost of $1$ more Hot Pocket is:

A
$4$ eggs

B
$\dfrac{1}{6}$ eggs

C
$1$ egg

D
$\dfrac{4}{3}$ eggs

Solution

The opportunity cost of moving point D to point C, i.e, increasing the production of hot pockets by $3$ units ( $9 - 6$ ), is $4$ eggs ( $15-11$ ). In this case, the opportunity cost of $1$ more hot pocket is $4/3$ eggs, i.e., $(15 - 11/9 - 6)$ .
Question 4
1 / -0

The following table shows the production possibility of cricket bats and sarees of an imaginary economy
Production of Cricket Bats (in thousand) 0 1 2 3 4 5
Production of Sarees (in lakh) 75 70 62 50 30 0
If the production of cricket bats is increased from $3$ thousand to $4$ thousand, what is the opportunity cost that the economy has to bear?

A
Zero

B
$8$ lakh sarees

C
$30$ lakh sarees

D
$20$ lakh sarees

Solution

If the production of cricket bat is increased from 3 thousand to 4 thousand, the opportunity cost that economy has to bear will be 20 lakh sarees(50-30 lakh sarees) since it has to be sacrificed in order to produce more of cricket bats with limited resources and technology given.Opportunity cost of production of a commodity refers to the cost which the producer has to sacrifice in terms of the next best alternative use. Therefore, the sacrifice which is made to produce 4 thousand bats from3 thousand to four thousand thousand is 20 lakh sarees.
Question 5
1 / -0

In a socialist economy, it is the responsibility of the ___________ to ensure that adequate amount of goods are made available to the people.

A
central bank

B
planning authority

C
NGOs

D
business firms

Solution

The central problems of the economy is solved by a centrally based planning authority that resolves all the centrally based problems related to production of goods and services in the economy which includes the problem of 'What to produce? Consumer goods or capital goods?' which is decided by allocating resources for the production keeping in mind the needs of the people i.e. consumer goods and to satisfy their wants.
Question 6
1 / -0

'From each according to his capacity and to each according to his work' is the principle of ___________, in a socialist economy.

A
distribution of utilities

B
distribution of income

C
employment segregation

D
wealth distribution

Solution

In a socialist economy, the central problems of the economy is solved by a centrally based planning authority that resolves all the centrally based problems related to production of goods and services in the economy which includes the problem of 'For whom to produce?' is decided by allocating resources for the production keeping in mind the purchasing power of the nation according to their capacity and income earned and spent by them.
Question 7
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Which among the following influences the choice of method of production used by the public sector in a mixed economy?

A
Promotion of economic growth

B
Input/Factor prices

C
Generation of employment opportunities

D
All of the above

Solution

In a mixed economy, public sector resolves the problem of 'how to produce?' keeping in mind the social welfare of the economy which includes overall economic growth and development, less input and factor prices for the availability of resources and generation of employment opportunities to eradicate poverty from the economy.
Question 8
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The government in a mixed economy controls production in ____________ as well as ____________ sector so as to ensure adequate availability of necessities.

A
primary, industrial

B
public, private

C
banking, agricultural

D
public, construction

Solution

In a mixed economy both private as well as public enterprises utilize the resources for the production of goods and services in the economy for personal as well as social gains where government audits the overall production to ensure adequate availability of goods and services in the economy.
Question 9
1 / -0

The ___________ sector in a mixed economy decides 'what to produce and how much to produce' based on the overall national objectives.

A
private

B
public

C
industrial

D
agricultural

Solution

In a mixed economy, public sector resolves the problems of 'what to produce and how to produce?' keeping in mind the social welfare of the economy which includes overall economic growth and development, less input and factor prices for the availability of resources and generation of employment opportunities to eradicate poverty from the economy.
Question 10
1 / -0

The public sector under a mixed economy provides __________ so as to promote economic development.

A
consumer goods

B
economic infrastructure

C
luxury goods

D
all of the above

Solution

In a mixed economy, private decisions are intervened by the government due to which all the major economic decisions related to economic development is taken by the government i.e. public sector which includes economic infrastructure, development of health and education etc.

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	A	B	C	D	E	F
Hot pockets	$15$	$12$	$9$	$6$	$2$	$0$
Eggs	$0$	$6$	$11$	$15$	$18$	$20$

Production of Cricket Bats (in thousand)	0	1	2	3	4	5
Production of Sarees (in lakh)	75	70	62	50	30	0

Introduction to Microeconomics Test 25

Result

Introduction to Microeconomics Test 25

Score

-

Rank

-

SHARING IS CARING

Question 1

Faster economic growth should result if an economy has a higher level of investment

Changing the level of interest rates is a better way of managing the economy than using taxation and government expenditure.

Higher level of unemployment will lead to higher level of inflation

The average level of growth in the economy was faster in the 1990s than the 1980s

Solution

Question 2

unsatisfactory performance of agriculture

slackening of real investment in public sector

narrow market for industrial goods, especially in rural areas

all of the above

Solution

Question 3

444 eggs

16\dfrac{1}{6}61​ eggs

111 egg

43\dfrac{4}{3}34​ eggs

Solution

Question 4

Zero

888 lakh sarees

303030 lakh sarees

202020 lakh sarees

Solution

Question 5

central bank

planning authority

NGOs

business firms

Solution

Question 6

distribution of utilities

distribution of income

employment segregation

wealth distribution

Solution

Question 7

Promotion of economic growth

Input/Factor prices

Generation of employment opportunities

All of the above

Solution

Question 8

primary, industrial

public, private

banking, agricultural

public, construction

Solution

Question 9

private

public

industrial

agricultural

Solution

Question 10

consumer goods

economic infrastructure

luxury goods

all of the above

Solution

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$4$ eggs

$\dfrac{1}{6}$ eggs

$1$ egg

$\dfrac{4}{3}$ eggs

$8$ lakh sarees

$30$ lakh sarees

$20$ lakh sarees