Deck 12: Economics and Economic Methods

Question 1

In a free enterprise economy, the problems of what, how and for whom to produce are solved by :

A)A Planning Committee
B)The Price mechanism
C)The Planning Commission
D)None of these.

Answer 1

The Price mechanism

Question 2

Who considered Political Economy as "an enquiry into the nature and causes of the wealth of nations"?

A)Adam Smith
B)J.B.Say
C)Marshall
D)Keynes

Answer 2

Adam Smith

Question 3

Which of the following definitions of Economics include the economic concept of 'scales of Preferences'?

A)Wealth definition
B)Welfare definition
C)Scarcity definition
D)Growth definition

Answer 3

Scarcity definition

Question 4

Which of the following embodies a more widely accepted definition of economics?

A)Science of material welfare
B)Science of wealth
C)A study of mankind in the ordinary business of life
D)Science of making choice.

Question 5

The fundamental problem faced by an economy is one of :

A)Exchange
B)Decision making by the government
C)Economic welfare
D)Scarcity of resources and multiplicity of wants.

Question 6

Production possibilities curve does not show:

A)What to produce
B)How to produce
C)For whom to produce
D)Productive potential under conditions of underemployment

Question 7

State whether Economics is :

A)A positive science only
B)Neither a positive science
C)A science but not art
D)A science or an art depending on who uses Economics and for what

Question 8

Who of the following emphasized the normative aspect of Economics as a science?

A)The English classical school
B)Lionel Robbins
C)The German historical school
D)None of these.

Question 9

Of the following economists who is considered as master of partial analysis?

A)Alfred Marshall
B)A.C.Pigou
C)J.M.Keynes
D)J.S.Mill.

Question 10

Which of the following statements has been drawn by inductive method?

A)A consumer will buy from the cheapest market
B)All businessmen wish to buy at low price and sell at high price
C)A private firm will try to maximize its profits
D)The larger the stock of money with a person, the lower is the utility that he

Question 11

What is true for deductive method?

A)Abstract
B)Realistic
C)Economic conditions assumed to be changing
D)Supported by historical school.

Question 12

What is true for inductive method?

A)Hypothetical
B)Empirical
C)Ignores experimentation
D)Static

Question 13

Find out the correct statement:

A)Prediction of economic models cannot be refuted by empirical evidence
B)Models transform verbal expressions in to more scientific expressions
C)Models make no assumptions
D)Economic models are comprehensive and not partial

Question 14

Micro economic theory studies how a free enterprise economy determines:

A)The Price of goods
B)The price of services
C)The price of resources
D)All of these.

Question 15

Which aspect of taxation involves normative economics?

A)The incidence of the tax
B)The fairness of the tax
C)The effect of the tax on incentives to work
D)All of the above

Question 16

Microeconomics deals primarily with:

A)Comparative statics, general equilibrium and positive economics
B)Comparative statics, partial equilibrium and normative economics
C)Dynamics, partial equilibrium and positive economics
D)Comparative statics, partial equilibrium and positive economics.

Question 17

The word micro was first used in Economics by:

A)Keynes
B)Ragnar Frisch
C)J.R.Hicks
D)Marshall

Question 18

A function refers to :

A)The demand for a commodity
B)The supply of a commodity
C)The demand and supply of a commodity service or resource
D)The relationship between one dependent variable and one or more

Question 19

The validity of an economic theory is judged by its power to:

A)Explain an economic phenomenon
B)Predict the course of an economic phenomenon
C)Prove or disprove a hypothesis
D)Reveal the economic laws

Question 20

The subject matter of economics is the study of:

A)Wealth
B)Welfare
C)Scarcity
D)Scarcity and Choice

Question 21

To whom do you attribute the 'growth' definition of economics?

A)Paul Samuelson
B)Lionel Robbins
C)Milton Friedman
D)Alfred Marshall

Question 22

The first economist who coined the terms micro economics and macroeconomics

A)Ragnar Frisch
B)Keynes
C)Marshall
D)Friedman

Question 23

Microeconomics deals with:

A)The theory of factor pricing
B)The theory of product pricing
C)The theory of economic welfare
D)All the above

Question 24

Prof. Robbin's definition of Economics is:

A)Scarcity definition
B)Growth definition
C)Welath definition
D)Welfare definition

Question 25

A theory is:

A)An assumption
B)A validated hypothesis
C)An 'if then' proposition
D)A hypothesis