# Competitive Exams: Economics MCQs (Practice-Test 59 of 122)

1. the norms of behaviour which satisfy the requirements of social rationality of economic activity are established by

1. Positive economics

2. Normative economics

4. Mathematical economics

2. N2, money supply measure in India, constitutes

1. M1 + all post-office deposits

2. M1 + time deposits of commercial banks

3. M1 + post-office saving deposits

4. M3 + all post-office deposits

3. Suppose a labourer works for lesser number of hours when he receives a higher wage rate. It implies that

1. as the wage rate rises, each labour hour becomes less playing and the labourer substitutes work for leisure.

2. income effect and substitution effect operate in the same direction.

3. income effect and substitution effect operate in opposite directions and substitution effect dominates the income effect.

4. income effect and substitution effect operate in opposite directions and income effect dominates the substitution effect.

4. Perfectly competitive industries could be earning only normal profits in the long run stationary state and pure profits could be zero, because:

1. marginal revenue equals marginal cost

2. price equals marginal cost

3. marginal cost equals average cost

4. average revenue equal marginal revenue, marginal cost and average cost.

5. Product exhaustion theorem provides the solution to producer's long run problem of allocation of total product to each factor. The theorem holds good when.

1. there are externalities

2. linear homogeneous production function prevails

3. factors are competitive

4. factors of production are perfectly indivisible

6. Canon of equity in taxation is generally considered to be satisfied by

1. Proportional taxation

2. Progressive taxation

3. Regressive taxation

4. Lump sum tax

7. Match List I withy List II and select the correct answer:

 List-I List-II Capital consumption allowances Subsidies Personal taxes Personal savings Are included in estimating national income at factor cost Are excluded while calculating disposable income Are excluded in calculating personal outlays Are excluded in estimating Net National Product.
• A
• B
• C
• D
• 3
• 1
• 2
• 4
• 4
• 1
• 2
• 3
• 3
• 2
• 1
• 4
• 4
• 2
• 1
• 3
8. In Pareto optimality analysis, convexity of all indifference curves and concavity of the transformation curves refer to

1. marginal conditions

2. second order conditions

3. total conditions

4. average conditions

9. Stagflation refers to

1. high inflation in periods of high unemployment

2. deflation in periods of stagnant employment

3. deflation in periods of high unemployment

4. high inflation in periods of full employment

10. The various compensation which led to the so-called New Welfare Economics, presented a universally valid criterion for increase in welfare but the attempts failed, mainly because

1. they wee based on a very broad ethical positive view

2. they were not successful in offering a value-free welfare criterion.

3. they did not come equipped with a kit and a set of instructions for collecting welfare judgments

4. they were based on the unrealistic assumption of measuring utility cardinally

11. If a nation's terms of trade are 2, its trade partner's terms of trade will be

1. 4

2. 2

3. 1

4. ½

12. In Heckscher-Ohlin theory of international trade, the most important source of difference in relative commodity prices between nations is a difference in

1. factor endowments

2. technology

3. tastes

4. demand conditions

13. Match List I withy List II and select the correct answer:

 List-I (Concepts) List-II (Economists) Critical minimum effort Unlimited supply of labour Theory of balanced growth Warranted growth rate Rosenstein-Rodan harrod-Domar W A Lewis H Leibenstein
• A
• B
• C
• D
• 1
• 2
• 4
• 3
• 4
• 3
• 1
• 2
• 1
• 3
• 4
• 2
• 4
• 2
• 1
• 3
14. Panchayat Raj institutions are intended to strengthen

1. indicative planning

2. multi-level planning

3. structural planning

4. functional planning

15. The process of economic development refers to

1. growth of national income over time

2. growth of per capita income and standards of living

3. full employment of the entire population

4. growth of national income with structural changes in the economy