Introduction to Microeconomics Test 7

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Introduction to Microeconomics Test 7

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Weekly Quiz Competition

Question 1
1 / -0

The difference between the positive and normative approach in economics is that ___________.

A
positive economic start with statement in affirmative mode whereas normative in negative mode

B
positive economic concerns matter of fact, whereas normative concerns matter of opinion

C
in positive economic answer is yes whereas in normative there is no answer to the problem

D
all of the above
Solution
- Positive economics: It studies the fact of life i.e it deals with 'things as they are'. It deals with what are the economic problems and how are they actually solved. It explains the cause and effect relationship and avoids giving suggestions.
- Normative economics deals with what ought to be or how the economic problems should be solved. It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
Question 2
1 / -0

By scarcity of productive resources we mean ______.

A
limited supply

B
restricted supply

C
non existence of supply

D
fixed supply

Solution

Scarce resources refers to the resources which are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs.
Question 3
1 / -0

Higher PPC curve indicates _______.

A
more production of both the things with increase in technology or increase in supply of factors of production

B
more production of one at the expense of other

C
more production of one items at the expense of other with increase in technology or factor input supply

D
less than full employment situation

Solution

Higher PPC curve indicates more of production of both the things with an increase in technology or increase in the supply of factors of production. This is because when there is a capacity increase with respect to both the goods, the PPF curve moves to the left/ outward, being the Higher PPF. However, the decrease in resources or technology will have a lower PPF.
Question 4
1 / -0

Economic efficiency means _______.

A
production of goods of mass consumption at lower cost.

B
production of goods and services for those who have purchasing power.

C
getting greatest satisfaction from available resources.

D
full employment of working force.

Solution

Economic efficiency means making optimum use of the available resources. There is a need to economize, as we satisfy our unlimited wants out of limited resources. Thus economic efficiency is achieved when we derive greatest satisfaction from the existing resources.
Question 5
1 / -0

Senior citizen deserve hike in pension and better medical care. This is a ______________ statement.

A
subjective

B
negative

C
positive

D
normative
Solution
Normative economics deals with what ought to be or how the economic problems should be solved. It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
Senior citizens deserve hike in pension and better medical care is suggesting us a measure to make the situation desirable for senior citizens and thus the statement is normative in nature.
Question 6
1 / -0

Which of the following is not a central problem of a society?

A
What to produce

B
How to produce

C
For whom to produce

D
What to eat

Solution

The central problem of a society refers to all such prominent problems that affect the civilians of that society directly. Therefore, the problem of 'how to eat' is the problem of deciding the accurate consumption by an individual through various commodities available to him.
Question 7
1 / -0

Which of the following is a normative statement?

A
To check inflation RBI should restrict money supply

B
Government spends Rs. $$5000$$ crore annually of public health

C
Increase in crude prices will hit the industry hand

D
WPI index is not a true barometer of inflation
Solution
Normative economics deals with what ought to be or how the economic problems should be solved. It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
To check the inflation, RBI should restrict the money supply is suggesting us a measure to make the situation desirable that is keep a check on inflation and thus the statement is normative in nature.
Question 8
1 / -0

To reduce pollution, government should impose heavy penalty on polluting vehicles. This is a __________ statement.

A
subjective

B
negative

C
positive

D
normative
Solution
- Normative economics deals with what ought to be or how the economic problems should be solved. It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
- To reduce pollution, government should impose heavy penalty on polluting vehicles is suggesting us a measure to make the situation desirable, that is reducing pollution and thus the statement is normative in nature.
Question 9
1 / -0

PPF is negative sloped due to ________.

A
scarcity of production resources

B
unlimited wants

C
improvement in technology

D
increasing opportunity cost
Question 10
1 / -0

Production Possibility curve helps in __________.

A
making proper choice

B
deciding optimal level of production

C
deciding minimum level of cost

D
deciding the stage of increasing return to scale

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Re-Attempt Weekly Quiz Competition

Introduction to Microeconomics Test 7

Result

Introduction to Microeconomics Test 7

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Rank

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SHARING IS CARING

Question 1

positive economic start with statement in affirmative mode whereas normative in negative mode

positive economic concerns matter of fact, whereas normative concerns matter of opinion

in positive economic answer is yes whereas in normative there is no answer to the problem

all of the above

Solution

Question 2

limited supply

restricted supply

non existence of supply

fixed supply

Solution

Question 3

more production of both the things with increase in technology or increase in supply of factors of production

more production of one at the expense of other

more production of one items at the expense of other with increase in technology or factor input supply

less than full employment situation

Solution

Question 4

production of goods of mass consumption at lower cost.

production of goods and services for those who have purchasing power.

getting greatest satisfaction from available resources.

full employment of working force.

Solution

Question 5

subjective

negative

positive

normative

Solution

Question 6

What to produce

How to produce

For whom to produce

What to eat

Solution

Question 7

To check inflation RBI should restrict money supply

Government spends Rs. $$5000$$ crore annually of public health

Increase in crude prices will hit the industry hand

WPI index is not a true barometer of inflation

Solution

Question 8

subjective

negative

positive

normative

Solution

Question 9

scarcity of production resources

unlimited wants

improvement in technology

increasing opportunity cost

Question 10

making proper choice

deciding optimal level of production

deciding minimum level of cost

deciding the stage of increasing return to scale

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My Perfomance

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