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This set of Introductory Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Introductory Economics 1 Set 2
Q1 | The deductive method is also called
- abstract
- analytical
- priori method
- all the above
Q2 | An Essay on the Nature and Significance of Economic Science was written by
- adamsmith
- alfred marshall
- lord robbins
- samuelson
Q3 | Other things being equal a decrease in demand can be caused by
- a fall in price of the commodity
- a fall in income of the consumer
- a rise in price of the substitute
- none of these
Q4 | When price of a product falls, more of it is purchased because of
- the substitution effect
- the income effect
- neither substitution effect nor income effect
- both the substitution and income effects
Q5 | “Utility or satisfaction is a subjective concept; therefore it could only be ranked”.The statement supports
- cardinal utility theorist
- ordinal utility theorist
- behavioral theorist of the firm
- none of the above
Q6 | The basic doctrine of consumers surplus is based on
- indifference curve analysis
- revealed preference theory
- law of substitution
- law of diminishing marginal utility
Q7 | According to Marshall, The law of diminishing marginal utility
- applies on money in the manner in which it applies on commodity
- do not applies on money except bank money
- does not applies on bank money but applies on cash
- applies on all commodities except money
Q8 | Indifference curve is always
- concave to the origin
- convex to the oringin
- l shaped
- a straight line
Q9 | Engel curve for giffen good is
- positively sloped
- negatively sloped
- horizontal straight line
- vertical straight line
Q10 | Price effect is
- income effect – substitution effect
- substitution effect – income effect
- income effect + substitution effect
- income effect + substitution effect- negative effects
Q11 | For a giffen good, when price falls
- demand increases at a faster rate
- demand decreases
- demand remains constant
- demand curve has a negative slope
Q12 | Inferior goods are the goods with
- falling income effect
- rising income effect
- negative income effect
- positive marshallian effects
Q13 | Which of the following is called gossans first law
- law of substitution
- law of equi marginal utility
- law of diminishing marginal utility
- none of the above
Q14 | When individuals income falls (everything remain the same) his demand for aninferior good
- rises
- falls
- remains the same
- we cannot say without additional information
Q15 | According to Marshall consumer surplusis:
- total utility – marginal utility
- total utility + marginal utility
- total utility derived – price
- price – marginal utility
Q16 | If both the products X & Y are normal goods
- slopes down towards right
- slopes up towards right
- slopes up towards left
- slopes down towards left
Q17 | Which of the following statement is TRUE with regard to total utility
- total utility is the utility derived from last unit
- total utility increases at a diminishing range
- as consumption increases total utility goes on diminishing
- at saturation point total utility is negative
Q18 | If negative income effect is less than positive substitution effect : the product will be
- a normal good
- an inferior good
- a giffen good
- a complementary good