Micro Economics 1 Set 16

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 16

Q1 | Commodities bought in larger quantities when income rises are called:
  • Normal goods
  • Inferior goods
  • Giffen goods
  • None
Answer: Normal goods
Q2 | The curve showing the quantity of a good that would be purchased at various income levels:
  • Income Consumption Curve
  • Price Consumption Curve
  • Engel Curve
  • Indifference Curve
Answer: Engel Curve
Q3 | Change in demand due to change in relative price alone is called:
  • Income effect
  • Substitution effect
  • Price effect
  • Ratchet effect
Answer: Substitution effect
Q4 | Substitution Effect is:
  • Always negative
  • Always positive
  • Seldom negative
  • Zero
Answer: Always negative
Q5 | If income effect works in the same direction to that of substitution effect, the good is a:
  • Normal good
  • Inferior good
  • Giffen good
  • Superior Good
Answer: Normal good
Q6 | If income effect works in the direction opposite to that of substitution effect, the good is not:
  • Giffen good
  • Inferior good
  • Normal good
  • Superior Good
Answer: Normal good
Q7 | Introspection is not the basis of :
  • Marshallian utility analysis
  • Indifference Curve Analysis
  • Revealed Preference Hypothesis
  • Demand Analysis
Answer: Revealed Preference Hypothesis
Q8 | The ordering of combinations on an indifference curve is:
  • Weak
  • Strong
  • Average
  • None
Answer: Weak
Q9 | Strong ordering is a distinguishing feature of the theory given by:
  • Marshall
  • Hicks
  • Samuelson
  • Adam Smith
Answer: Samuelson
Q10 | Father of Economics:
  • Marshall
  • David Ricardo
  • Adam Smith
  • J.M. Keynes
Answer: Adam Smith
Q11 | The Wealth of Nations is the work of:
  • Marshall
  • J.S. Mill
  • Adam Smith
  • Lionel Robins
Answer: Adam Smith
Q12 | Indifference Approach is related with:
  • Marshall
  • J.R. Hicks
  • Samuelson
  • Sismondi
Answer: J.R. Hicks
Q13 | Which one of the following is an example of close substitute:
  • Tea and Coffee
  • Milk and water
  • Bread and Butter
  • Pen and pencil
Answer: Tea and Coffee
Q14 | The addition to the total revenue by the sale of an additional unit is:
  • Total revenue
  • Average revenue
  • Value added
  • Marginal revenue
Answer: Marginal revenue
Q15 | Which cost is to be incurred by a firm even if output is zero:
  • Opportunity cost
  • Fixed cost
  • Variable Cost
  • Total cost
Answer: Fixed cost
Q16 | The marginal utility theory is contributed by:
  • Marshall
  • David Ricardo
  • Adam Smith
  • Samuelson
Answer: Marshall
Q17 | The factor earning of entrepreneur is:
  • Rent
  • Wage
  • Interest
  • Profit
Answer: Profit
Q18 | The Scarcity definition of Economics is the contribution of:
  • Samuelson
  • Adam Smith
  • Lionel Robbins
  • Marshall
Answer: Lionel Robbins
Q19 | Average Revenue is equal to:
  • Price
  • Cost
  • Profit
  • None of these
Answer: Price
Q20 | Total Revenue is the maximum when Marginal Revenue is ----------
  • Positive
  • Negative
  • One
  • Zero
Answer: Zero
Q21 | Market economy is also known as:
  • Socialist economy
  • Capitalist economy
  • Mixed economy
  • Developing economy
Answer: Capitalist economy
Q22 | If the demand curve is linear and negatively sloped, the marginal revenue curve has a slope:
  • Negative
  • Positive
  • Neither negative nor positive
  • Either negative or positive
Answer: Negative
Q23 | Other things remaining the same, the quantity of a product demanded increases with ----- in price.
  • Increase
  • Decrease
  • Variation
  • None of the above
Answer: Decrease
Q24 | For complementary goods, the cross elasticity of demand:
  • Positive
  • Negative
  • Zero
  • None
Answer: Negative
Q25 | Relation between price of a commodity and demand for another commodity is measured by:
  • Price elasticity
  • Income elasticity
  • Cross elasticity
  • Elasticity of substitution
Answer: Cross elasticity
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