Which one of the following is not a feature of monopoly?
(a) Single seller of the product
(b) Heavy selling costs
(c) Barriers to entry of new firms
(d) Price discrimination
Solution: (b)
Heavy selling cost is one of the defining features of an oligopoly. Firms resort to heavy selling cost to attract customers. Under this market form, the firms have to compete to promote their sale by largely homogenous products, differentiated mainly by heavy advertising and promotional expenditure that ultimately adds to the total selling cost.
The supply of labor in the market depends on
(a) the proportion of the population in the labor force
(b) the number of person-hours put in by each person
(c) the size of the population
(d) All the above
Solution: (d)
Supply of labour in an economy depends upon both economic as well as non-economic factors. It depends upon the size of population, the number of workers available for work out of a given population, the number of hours worked, the intensity of work, the skills of workers, their willingness to work and the mobility of labour.
The price of a commodity is the same as
(a) Average revenue
(b) Total cost
(c) Average cost
(d) Total revenue
Solution: (a)
Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold. Thus, Average Revenue (AR) = Total Revenue (TR)/Quantity sold (Q) When we take the case of a single commodity,
TR = P × Q
So,
AR= TR/Q = P
where P = Price of the commodity.
An economy in which there are no flows of labor, goods, or money to and from other nations is a/an
(a) slow economy
(b) mixed economy
(c) closed economy
(d) open economy
Solution: (c)
An economy that does not interact with the economy of any other country is known as closed economy. A closed economy is self-sufficient, meaning no imports are brought in and no exports are sent out. It is the opposite of an open economy, in which a country conducts trade with outside regions
According to the Malthusian theory of population
(a) Population increases in geometric ratio, food supply increases in arithmetic ratio
(b) Population increases in arithmetic ratio, food supply increases in geometric ratio
(c) Population increases in a harmonic mean, food supply increases in geometric ratio
(d) Population increases in a harmonic ratio and food supply increases in an arithmetic
Solution: (a)
In his 1798 work, An Essay on the Principle of Population, Malthus examined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
A motion that seeks to reduce the amount of demand presented by the government to Re. 1/is known as
(a) Disapproval of policy Cut
(b) Token cut
(c) Economy cut
(d) Vote on account
Solution: (a)
Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-’ representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Insider trading is related to
(a) Trade sector
(b) Share market
(c) Credit market
(d) Horse racing
Solution: (b)
Insider trading is the trading of a public company’s stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider non-public information.
Which of the following is a tertiary activity?
(a) Farming
(b) Manufacturing
(c) Dairying
(d) Trading
Solution: (d)
The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory. The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service based and give non-tangible value to customers such as provision of services, trading, etc.
An indifference curve measures the same level of
(a) Output from two factors
(b) Satisfaction from two commodities
(c) Satisfaction from Income and Capital
(d) Satisfaction from expenditure and saving
Solution: (b)
An indifference curve is a locus of combinations of goods which derive the same level of satisfaction, so that the consumer is indifferent to any of the combination he consumes. If a consumer equally prefers two product bundles, then the consumer is indifferent between the two bundles. The consumer gets the same level of satisfaction (utility) from either bundle. In other words, an indifference curve is the locus of various points showing different combinations of two goods providing equal utility to the consumer.
What is an octroi?
(a) Tax
(b) Tax collection center
(c) Tax processing center
(d) Tax information center
Solution: (a)
Octroi is a local tax which is collected by the state government on those goods that have been bought into the city/state for the purpose of personal use and sale. The charges on the items are generally levied after on the weight, value and total number of goods. It is levied on certain articles, such as foodstuffs, on their entry into a city.
