Deck 1: Economic Concepts and Theories

Question 1

Of 'real wages' and 'money wages'

A)The former is a wider concept than the latter
B)The latter is a wider concept than the former
C)Both concept mean the same thing
D)All of the above

Answer 1

The former is a wider concept than the latter

Question 2

The concept of Quasi-rent mean

A)The rent to the workers
B)The rent shared by the Landlord and workers
C)The interest paid to the entrepreneur
D)The return to a factor of production which is fixed in supply in the short period

Answer 2

The return to a factor of production which is fixed in supply in the short period

Question 3

The return to a factor of production which is fixed in supply in the short period is called

A)Scarcity rent
B)Economic rent
C)Quasi-rent
D)Contractual rent

Answer 3

Quasi-rent

Question 4

The marginal productivity theory of distribution was firstly formulated in its complete form by

A)Adam Smith
B)J. S. Mill
C)J. B. Clark
D)David Ricardo

Question 5

The 'iron law of wages' is

A)The wage-fund theory
B)The marginal productivity theory of wages
C)Collective bargaining
D)The subsistence theory of wages

Question 6

According to Prof Knight, profit is the reward for

A)Innovation
B)Capital
C)Foreseeable risks
D)Uncertainty bearing

Question 7

The uncertainty-bearing theory of profit was propounded by

A)F. H. Knight
B)F. B. Hawley
C)P. A. Samuelson
D)Joseph Schumpeter

Question 8

Which of the following is not included in the assumptions of Clark's marginal productivity of distribution

A)Perfect competition
B)Constant population
C)Constant amount of capital
D)Labour is heterogeneous

Question 9

Marginal productivity theory is also called

A)Real theory
B)Classical theory
C)Monetary theory
D)None of the above

Question 10

Subsistence theory of wages was used by

A)Karl Marx
B)Robinson
C)J. S. Mill
D)David Ricardo

Question 11

Profit is also known as

A)Contractual rent
B)Residual income
C)Net income
D)None of the above

Question 12

Changes in the rate of interest affect the amount of money held for

A)transaction motive
B)precautionary motive
C)speculative motive
D)normal motive

Question 13

The marginal productivity theory of distribution is associated with

A)Adam Smith
B)Lionel Robbins
C)J. B. Clark
D)Bergson

Question 14

Who has contributed the modem theory of interest rate determination?

A)Paul A. Samuelson
B)Gunnar Myrdal
C)Knut Wicksell
D)J.R. Hicks

Question 15

Whose name is associated with the "Uncertainty-bearing theory of profit"?

A)J. Schumpeter
B)F.H. Knight
C)J.B. Clark
D)F.W. Watker

Question 16

Who has sought to measure Consumer's Surplus with the help of indifference curve technique?

A)Edgeworth
B)Alfred Marshall
C)J.R. Hick
D)Pareto

Question 17

Which among the following is NOT an assumption of Pareto optimality?

A)Every consumer wishes to maximize his level of satisfaction.
B)All the factors of production are used in the production of every commodity.
C)Conditions of perfect competition exist making all the factors of production perfectly mobile
D)The concept of utility is cardinal and cardinal utility function of every consumer is given.

Question 18

When a firm's average revenue is equal to its average cost, it gets ________.

A)Sub normal profit
B)Normal profit
C)Abnormal profit
D)Super profit

Question 19

Given the price, if the cost of production increases because of higher price of raw materials, the supply

A)Decrease
B)Increase
C)Remains the same
D)Any of the above

Question 20

Under __________________, price is determined by the interaction of total demand and total supply in the market.

A)Perfect competition
B)Monopoly
C)Imperfect competition
D)Monopolistic Competition

Question 21

Standard of living of workers depends upon their

A)Nominal wages
B)Real wages
C)Average product
D)Govt. policy

Question 22

Under Marginal productivity Theory, reward for labour is determined by

A)Owner
B)Labour
C)Government
D)Marginal Product

Question 23

The economist Ricardo argued that prices were _____ because land rents were _______

A)High, High
B)Low, Low
C)Low, High
D)High, Low

Question 24

As for the cost of production of an individual farmer, the rent paid by him

A)Enters into the price of his product
B)None of these
C)Does not enter into price of his product
D)Is unjustified

Question 25

He presented a theory of rent

A)Malthus
B)Prof. Knight
C)Ricardo
D)Marshall