Micro Economics 1 Set 12

Bachelor of Arts in Economics (BA Economics)

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This set of Micro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 1 Set 12

Q1 | In a free enterprise economy, the problems of what, how and for whom to produce are solved by :
  • A Planning Committee
  • The Price mechanism
  • The Planning Commission
  • None of these.
Answer: The Price mechanism
Q2 | Who considered Political Economy as “an enquiry into the nature and causes of the wealth of nations”?
  • Adam Smith
  • J.B.Say
  • Marshall
  • Keynes
Answer: Adam Smith
Q3 | Which of the following definitions of Economics include the economic concept of ‘scales of Preferences’?
  • Wealth definition
  • Welfare definition
  • Scarcity definition
  • Growth definition
Answer: Scarcity definition
Q4 | Which of the following embodies a more widely accepted definition of economics?
  • Science of material welfare
  • Science of wealth
  • A study of mankind in the ordinary business of life
  • Science of making choice.
Answer: Science of making choice.
Q5 | The fundamental problem faced by an economy is one of :
  • Exchange
  • Decision making by the government
  • Economic welfare
  • Scarcity of resources and multiplicity of wants.
Answer: Scarcity of resources and multiplicity of wants.
Q6 | Production possibilities curve does not show:
  • What to produce
  • How to produce
  • For whom to produce
  • Productive potential under conditions of underemployment
Answer: Productive potential under conditions of underemployment
Q7 | State whether Economics is :
  • A positive science only
  • Neither a positive science
  • A science but not art
  • A science or an art depending on who uses Economics and for what
Answer: A science or an art depending on who uses Economics and for what
Q8 | Who of the following emphasized the normative aspect of Economics as a science?
  • The English classical school
  • Lionel Robbins
  • The German historical school
  • None of these.
Answer: The German historical school
Q9 | Of the following economists who is considered as master of partial analysis?
  • Alfred Marshall
  • A.C.Pigou
  • J.M.Keynes
  • J.S.Mill.
Answer: Alfred Marshall
Q10 | Which of the following statements has been drawn by inductive method?
  • A consumer will buy from the cheapest market
  • All businessmen wish to buy at low price and sell at high price
  • A private firm will try to maximize its profits
  • The larger the stock of money with a person, the lower is the utility that he
Answer: All businessmen wish to buy at low price and sell at high price
Q11 | What is true for deductive method?
  • Abstract
  • Realistic
  • Economic conditions assumed to be changing
  • Supported by historical school.
Answer: Abstract
Q12 | What is true for inductive method?
  • Hypothetical
  • Empirical
  • Ignores experimentation
  • Static
Answer: Empirical
Q13 | Find out the correct statement:
  • Prediction of economic models cannot be refuted by empirical evidence
  • Models transform verbal expressions in to more scientific expressions
  • Models make no assumptions
  • Economic models are comprehensive and not partial
Answer: Models transform verbal expressions in to more scientific expressions
Q14 | Micro economic theory studies how a free enterprise economy determines:
  • The Price of goods
  • The price of services
  • The price of resources
  • All of these.
Answer: The Price of goods
Q15 | Which aspect of taxation involves normative economics?
  • The incidence of the tax
  • The fairness of the tax
  • The effect of the tax on incentives to work
  • All of the above
Answer: The fairness of the tax
Q16 | Microeconomics deals primarily with:
  • Comparative statics, general equilibrium and positive economics
  • Comparative statics, partial equilibrium and normative economics
  • Dynamics, partial equilibrium and positive economics
  • Comparative statics, partial equilibrium and positive economics.
Answer: Comparative statics, partial equilibrium and positive economics.
Q17 | The word micro was first used in Economics by:
  • Keynes
  • Ragnar Frisch
  • J.R.Hicks
  • Marshall
Answer: Ragnar Frisch
Q18 | A function refers to :
  • The demand for a commodity
  • The supply of a commodity
  • The demand and supply of a commodity service or resource
  • The relationship between one dependent variable and one or more
Answer: The relationship between one dependent variable and one or more
Q19 | The validity of an economic theory is judged by its power to:
  • Explain an economic phenomenon
  • Predict the course of an economic phenomenon
  • Prove or disprove a hypothesis
  • Reveal the economic laws
Answer: Explain an economic phenomenon
Q20 | The subject matter of economics is the study of:
  • Wealth
  • Welfare
  • Scarcity
  • Scarcity and Choice
Answer: Scarcity and Choice
Q21 | To whom do you attribute the ‘growth’ definition of economics?
  • Paul Samuelson
  • Lionel Robbins
  • Milton Friedman
  • Alfred Marshall
Answer: Paul Samuelson
Q22 | The first economist who coined the terms micro economics and macroeconomics
  • Ragnar Frisch
  • Keynes
  • Marshall
  • Friedman
Answer: Ragnar Frisch
Q23 | Microeconomics deals with:
  • The theory of factor pricing
  • The theory of product pricing
  • The theory of economic welfare
  • All the above
Answer: All the above
Q24 | Prof. Robbin’s definition of Economics is:
  • Scarcity definition
  • Growth definition
  • Welath definition
  • Welfare definition
Answer: Scarcity definition
Q25 | A theory is:
  • An assumption
  • A validated hypothesis
  • An ‘if then’ proposition
  • A hypothesis
Answer: A validated hypothesis
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