Q. Contraction of demand is the result of: A. Decrease in the number of consumers B. Increase in the price of the commodity concerned C. Increase in the prices of other goods D. Decrease in the income of purchasers Answer: Increase in the price of the commodity concerned
Q. Identify the aspect of taxation which is related to normative economics: A. Incidence of tax B. Effect of tax on the capacity willingness to work C. Equity of tax D. None of the above Answer: Equity of tax
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Q. Formulation of an economic theory involves: A. Statement of various assumptions or postulates B. Logical deductions from the assumptions made C. Testing the hypothesis against empirical evidence D. All of the above Answer: All of the above
Q. Which of the following is Microeconomics concerned with? A. The size of national output B. The levelof employment C. Changes in the general level of prices D. None of the above Answer: None of the above
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Q. If the demand for a commodity is inelastic, an increase in its price will cause the total expenditure of the consumers of the commodity to: A. Remain the same B. Increase C. Decrease D. Any of the above Answer: Increase
Q. Microeconomics deals with the: A. Allocation of resources of the economy as between production of different goods and services B. Determination of prices of goods and services C. Behaviour of industrial decision makers D. All of the above Answer: All of the above
Q. Which is not an essential feature of a socialist economy? A. Social ownership of the means of production B. Freedom of enterprise C. Use of centralized planning D. Government decisions Answer: Freedom of enterprise
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Q. A mixed economy is characterised by the co-existence of: A. Modern and traditional industries B. Public and private sectors C. Foreign and domestic investments D. Commercial and subsistence farming Answer: Public and private sectors
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Q. Which is not an essential condition for an economic problem to arise? A. Unlimited wants B. Use of money C. Scarcity of resources D. Alternative uses of scarce resources Answer: Use of money
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Q. Who defined Economics as a ‘Science which studies human behaviour as a relationship between ends and means which have alternative uses? A. L. Robbins B. Alfred Marshall C. Joan Robinson D. Paul A. Samuelson Answer: L. Robbins
