Q. Microeconomics is the study of:
A). National income
B). Individual economic units
C). Inflation and unemployment
D). Economic growth
Answer: B). Individual economic units
Explanation: Microeconomics focuses on individual units like consumers, firms, and markets.
Q. Macroeconomics deals with:
A). Pricing of a single commodity
B). Output of a firm
C). Aggregate economic variables
D). Consumer behaviour
Answer: C). Aggregate economic variables
Explanation: Macroeconomics studies economy-wide aggregates such as national income, inflation, and employment.
Q. Central problems of an economy arise because of:
A). Unlimited resources
B). Unlimited wants
C). Scarcity of resources
D). High population
Answer: C). Scarcity of resources
Explanation: Central problems arise due to the scarcity of resources in relation to unlimited human wants
Q. Which of the following is NOT a central problem of an economy?
A). What to produce
B). How to produce
C). For whom to produce
D). Where to produce
Answer: D). Where to produce
Explanation: The central problems of an economy are what to produce, how to produce, and for whom to produce. “Where to produce” is not a central problem.
Q. The problem of choice arises in an economy because:
A). Resources are unlimited
B). Wants are limited
C). Resources are scarce
D). Technology is perfect
Answer: C). Resources are scarce
Explanation: The problem of choice exists due to scarcity of resources in relation to unlimited human wants.
Q. The problem of choice in an economy leads to:
A). No production
B). Efficient use of resources
C). Elimination of wants
D). Excess supply
Answer: B). Efficient use of resources
Explanation: Making choices helps in allocating scarce resources efficiently among competing uses.
Q. A movement along the Production Possibility Set shows:
A). Economic growth
B). Change in technology
C). Change in allocation of resources
D). Increase in resources
Answer: C). Change in allocation of resources
Explanation: Movement along the set indicates reallocation of resources between different goods.
Q. Which of the following best explains opportunity cost?
A). Choosing all alternatives
B). Ignoring alternatives
C). Sacrificing one alternative to gain another
D). Increasing resources
Answer: C). Sacrificing one alternative to gain another
Explanation: Opportunity cost involves giving up one option in order to choose another.
Q. Production Possibility Set shows:
A). Maximum production of one good only
B). Different combinations of two goods that can be produced with given resources
C). Unattainable output
D). Allocation of government budget
Answer: B). Different combinations of two goods that can be produced with given resources
Q. The problem of ‘for whom to produce’ depends on:
A). Level of technology
B). Cost of production
C). Distribution of income
D). Availability of resources
Answer: C). Distribution of income
Q. In a mixed economy, the government mainly intervenes to:
A). Maximize private profit
B). Eliminate public sector
C). Correct market failures
D). Stop production
Answer: C). Correct market failures
Q. Which of the following economies best represents India?
A). Capitalist economy
B). Socialist economy
C). Mixed economy
D). Traditional economy
Answer: C). Mixed economy
Q. Positive economics deals with:
A). What ought to be
B). Value judgments
C). What is
D). Ethical principles
Answer: C). What is
Explanation: Positive economics studies facts and actual economic conditions without making value judgments.
Q. Normative economics analysis is mainly concerned with:
A). Facts and figures
B). Cause-and-effect relationships
C). Value judgments
D). Statistical data
Answer: C). Value judgments
Explanation: Normative economics involves value judgments about what ought to be done in an economy.
Q. Which of the following is a macroeconomic problem?
A). Price determination of a product
B). Cost of production of a firm
C). Unemployment in the economy
D). Consumer choice
Answer: C). Unemployment in the economy.
Q. Opportunity cost is also known as:
A). Economy cost
B). Accounting cost
C). Fixed cost
D). Explicit cost
Answer: A). Economy cost