op eco 1 Flashcards

Question

25.Which of the following statements is incorrect, if resources were unlimited? (A) There would still be scarcity and opportunity costs (B) There would still be scarcity but no opportunity costs (C) There would be no scarcity, but there would be opportunity costs. (D) There would neither be scarcity nor opportunity costs

Answer 1

(C) [SSC CHSL Exam 2017] Exp: In the case of unlimited resources there will be no scarcity but choosing one resource will be loss to other alternative so there will be opportunity costs.

Answer 2

(D) [SSC CHSL Exam 2017] Exp: Microeconomics is one of the branch of economics that deals with human behavior in relation to scarce resources at 'Individual level', like study of pricing, demand and supply.

Answer 3

(D) (SSC CGL 2012) Exp: Socialism theory says that state should work as the resource provider to protect marginalised or poor people for equality in society. Society welfare is core of this theory and due to this reason it is widely accepted and practiced almost everywhere.

Answer 4

(A) (SSC 10+2 2013) Exp: Primary sector includes all those economic activities where there is the direct use of natural resources like agriculture, forestry, fishing, fuels, metals etc.

Answer 5

(C) (SSC MTS 2013) Exp: Economics is study of human behaviour (i.e. social science) in relation to utilization of scarce resources available with maximum efficiency for producton and distribution of goods and services.

Answer 6

(D) (SSC CGL 2010) Exp: Price theory is associated with micro economics which is basically concerned with determination of output and price for individual firm or industry.

Answer 7

(A) (SSC CGL 2010) Exp: Normative economics is economics that is opinion based neither any facts nor objective, so it cannot be actually proved or disaproved it is totally subjective or quality based.

Answer 8

(A) (SSC MTS 2011) Exp: Capitalism is a theory which believes in profit maximization and regulation by demand and supply itself only. Therefore there is no regulation on what to hire and whom to fire.

Answer 9

(D) (SSC (10+2) 2011) Exp: Economic development refers to development by promoting standard of living and economic health by applying policies related to them and for economic development we need things like resources natural or artificial captial market and many more.

Answer 10

(B) (SSC SO 2003) Exp: Basic social infrastructure of economy constitutes the structures which helps society to grow as economy. Infrastructures like health facilities, education, public amnesty etc helps in social growth. Hence these are part of basic social infrastructure of economy.

Answer 11

(D) (SSC SO 2006) Exp: Mixed economy is an economy in which there is certain amount of freedom of operation to market but with government regulation on it. Hence, this market mechansim is guided by government participation and planning.

Answer 12

(A) (SSC CPO 2006) Exp: Closed economies are those economy which survive on the supply from domestic market only with no foreign trade, (totally dependent on domestic resources to fullfill demands.)

Answer 13

(A) (SSC T.A. 2009) Exp: Mixed economy is economy in which there is freedom of operations to market but with government regulation (i.e. existance of private sector as well as public sector respectively).

Answer 14

(C) (SSC DEO 2009) Exp: Sectors which are owned by state are called as public sectors and sectors which are owned by private entity are called as private sectors.

Answer 15

(A) (SSC MTS 2010) Exp: Classification of economy on the basis of production can be done into three sectors Primary sectors- deals with production from natural resources Secondary sector-production from the produce of primary sector as raw material Tertiary sector- activites related with services i.e. intangible activites.

Answer 16

(C) (SSC Steno. 2010) Exp: Workers are classified on the basis of industrial category of workers in following four categories: (1) Cultivators (2) Agricultural labourers, (3) Household Industry workers (4) Other workers. According to census cultivator is the person who is engaged in cultivation of land owned by other person.

Answer 17

(C) (SSC CGL 2017) Exp: Micro-economics is study at the single point or individual level like study of human behaviour in relation to price change and its effect on demand and supply etc.

Answer 18

(D) (SSC CGL 2017) Exp: Mixed economy is an economy in which there is certain amount of freedom of operation to market but with government regulation on it. Here market mechanism is guided by government participation and planning.

Answer 19

(C) (SSC CGL 2017) Exp: Socialistic economy is that system of economy in which all the means of production are controlled or regulated by State. The ownership is confined to community. This type of economy is also called as centrally planned economy. So, here government plans all important activities in the economy.

Answer 20

(C) (SSC CGL 2017) Exp: Centrally planned economy is other name of socialistic economic system where all the means of production are controlled by the state. A closest example of centrally planned economy is the Soviet Union for the major part of the 20th century.

Answer 21

(C) (SSC CPO 2017) Exp: 'Laissez faire' means no restrictions by government. So laissez faire policy is withdrawal of restrictions laid by the government on economy.

Answer 22

(C) (SSC CPO 2017) Exp: Capitalist economy is an economy in which market is regulated by demand and supply itself with the objective of profit maximization allowing private property.

Answer 23

(C) (SSC Sec. officer 2003) Exp: Equilibrium is state where quantity demanded equals quantity supplied. So in case of change, change will be either in demand or in supply and these changes are internal change.

Answer 24

(A) (SSC Tax Assistant (Income Tax & Central Excise 2006) Exp: A firm's equilibrium is a point when it has no inclination in changing its production or in short run marginal revenue equals marginal cost.

Answer 25

(C) (SSC Sec. officer 2006) Exp: Marginal productivity of labour is change in output resulting from employing one more unit of labour. It does not play any role in supply of labour.

Answer 26

(A) (SSC Tax Assistant (Income & Tax & Centre Excise 2008) Exp: Law of demand represents inverse relationship between demand and price. So change in unit price of commodity will result change in demand i.e extension and contration of quantity demanded.

Answer 27

(D) (SSC Tax Asst. 2008) (SSC CPO SI 2009) Exp: Cross-price elasticity is responsiveness of demand of goods due to change in price of other goods. Complementary goods are goods which are consumed together like tea and sugar etc. Here cross price elasticity will be negative.

Answer 28

(C) (SSC (South Zone) Investigator 2010) Exp: Law of demand states that with increase and decrease in price of good its quantity demanded decrease and increase respectively, and when there is excess demand, price of goods increases until it reach equilibrium.

Answer 29

(C) (SSC Combined Matric Level 2000) Exp: Law of demand states that with increase and decrease in price of goods, their demand decreases and increases respectively. So, price and quantity demanded are inversely related.

Answer 30

(B) (SSC Combined Matric Level 2002) Exp: Economic rent is excess amount earned on capital, higher than actual amount entrepreneur was expecting. In case of perfect elasticity, the enterpreneur would have choice to move over other factor units. So, in this case economic rent does not arise.

Answer 31

(B) (SSC Combined Matric Level 2002) Exp: Horizontal demand curve's elasticity is perfectly elastic. In other sense when the price of these goods changes from the market price, quantity demanded falls to zero.

Answer 32

(A)Exp: Under increasing return the supply will also have to increase. Hence, positively sloped from left to right.

Answer 33

(A) (SSC (10+2) Level DEO & LDC 2011) Exp: Elasticity of demand measures the responsiveness or change in quantity demand due to change in price of goods.

Answer 34

(A) (SSC (10+2) Level DEO & LCD 2011) Exp: Electricity have elastic demand means there is change in quantity demand due to change in price of goods. The other goods mention here will be non-elastic because these goods are essential goods.

Answer 35

(C) (SSC Const. (GD) & Rifleman 2012) Exp: Supply curve is the graphical representation of relationship between quantity supplied and its price with quantity. So, it shows the price at which seller is ready to sell with a particular quantity.

Answer 36

(A) (SSC Const. (GD) & Rifleman 2012) Exp: Supply of labour means availbility of persons working hours. Supply of labour depends on several factors like population, working age, working hour, income etc.

Answer 37

(D) (SSC (10+2) Level DEO & LDC 2012) Exp: Joint supply is the production of more than one produce from single resource. In given example, wool and mutton are goods produced by single object i.e. sheep.

Answer 38

(D) (SSC MTS 2013) Exp: Need is a state of mind in which someone felt deprived of something. To fulfill need the individual will have to have purchasing power and willingness to buy them, this need will convert into demand.

Answer 39

(B) (SSC MTS 2013) Exp: Elasticity is responsivness of demand due to change in its price. An inelasticity is situation when there is responsiveness in demand due to change in price is very less.

Answer 40

(B) (SSC CGL Tier-I 2013) Exp: Necessities are essential goods and services. Essential in nature can not be changed. So necessities will be perfectly inelastic i.e. change in demand will be neutral in response to change in price.

Answer 41

(A) (SSC CGL Tier-I 2013) Exp: Giffen goods are those good which are close to luxury goods. The demand for the giffen goods increases as the price of these goods are high representing social status and as the consumer earn less, he tend not to buy giffen goods.

Answer 42

(A) (SSC (10+2) Level DEO & LDC 2013) Exp: Cross demand is change in quantity demanded due to change in price or demand of other related goods.

Answer 43

(D) (SSC (10+2) Level DeO & LDC 2013) Exp: Law of demand is inverse relationship between demand and price and it is based on increasing returns i.e. with increase in demand price will increase upto only equilibrium stage only.

Answer 44

(A)Exp: Supply function expresses the relationship between producers and sellers in market hence price and output of goods.

Answer 45

(A) (SSC CAPFs SI, CISF ASI & Delhi 2014) Exp: Econmic rent is excess amount earn on capital, higher than actual amount entrepreneur was expecting. In case of perfect elasticity the entrepreneur would have choice to move over other factor units. So in this case economic rent does not rise.

Answer 46

(B) (SSC CGL Tier-2014) Exp: Demand for factors of production is created when there is demand for production of goods, so the demand created for factors will be derived demand.

Answer 47

(B) (SSC CGL Tier-I 2014) Exp: Unit elasticity is when there is change in price (big or small) leads to exactly the same percentage change in quantity each time. Also unit price elastic demand curve do not touch either price axis or quantity axis.

Answer 48

(A) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Law of demand shows inverse relationship between price and demand of commodities in light of assumption that other things are kept same.

Answer 49

(C) (SSC CHSL (10+2) DEO & LDC 2015) Exp: Demand Curve is graphical representation of price and quantity relationship with demand. A change in advertisement expenditure do not change demand curve.

Answer 50

(C) (SSC CHSL (10+2) DEO & LDC 2015) Exp: Price elasticity of demand is the relationship between a change in quantity demanded of goods and change in price. If price elasticity of demand is equal to zero, demand does not change when price changes.

Answer 51

(D) (SSC CHSL (10+2) DEO & LDC 2015) Exp: A demand curve when parallel to horizontal axis that means perfect elasticity. Here the coefficient price elasticity of demand is infinity.

Answer 52

(D) (SSC CHSL (10+2) Tier-I 2017) Exp: Demand curve in perfectly competitive firm environment is a situation where large number of producers are selling identical goods, here responsiveness of demand in relation to prices will be perfectly elastic i.e. infinity.

Answer 53

(C) (SSC CGL Tier-I 1999) Exp: Personal disposable income is income disposable so it will be amount available to the person after paying direct taxes.

Answer 54

"(B) (SSC CGL Tier-I 1999) Exp: Say's law propouned by JB Say, according to which in a market, ""supply creates its own demand."""

Answer 55

(A) (SSC Combined Matric Level 2002) Exp: The rate of interest is one of the main deciding factors of supply of cash, so speculative demand can be determined by rate of interest

Answer 56

(C) (SSC Combined Matric Level 2008) Exp: Demand is quantity of goods desired by buyers. The quantity demanded is supported by several other factors like purchasing power of buyer, willingness of buyer, product as per desire of buyers etc.

Answer 57

(D) (SSC CHSL Data Entry Operator & LDC 2010) Exp: Effective demand is actual demand i.e. demand supported by purchasing power and willingness to buy i.e. demand of product supported by price effects. If product price is low, people will buy more, but if price goes up then the quantity demanded of product goes down.

Answer 58

(A) (SSC CGL Tier-I 2015) Exp: Supply side economics is also known as Reaganomics which emphasizes that growth can be achieved by tax and fiscal policy that will create incentives to producer for producing more goods & services.

Answer 59

(A) (SSC (CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: When price of substitute goods falls, it directly effect demand of goods by decreasing it. In simple words when price of substitute goods fall people will tend to buy that particular good more, so demand for related product will automatically falls.

Answer 60

"(C) (SSC CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: J.B. say's law of market is ""supply creates its own demand"". Malthus opposed this very idea and state that demand of consumer is effected by other factors like tastes and habits. If supply increases, demand would not necessarily match supply."

Answer 61

(B) (SSC CHSL (10+2) LDC, DEO & PA/SA 2015) Exp: Alfred Marshall propounded the theory that price is determined by demand & supply both, he introduced time period analysis into pricing process i.e. longer the time more important will be influence of cost of production on value.

Answer 62

(A) Exp: Superior goods are those goods in which their demand increases with increase in income like unique antique goods or goods with scarcity of them in market.

Answer 63

(B) (SSC CHSL 2017) Exp: Equilibrium price Quantity demand = Quantity Supply. If we put the values, answer will be 2000.

Answer 64

(B) (SSC CHSL 2017) Exp: Point Elasticity = % ΔQ % ΔP i.e. P Q × ΔQ ΔP by putting values to formula we will get Rs. 30

Answer 65

(D) (SSC CHSL 2017) Exp: Elasticity of demand =% change in Quantity demanded % change in price by following the formula the answer will be 2.40%.

Answer 66

(A) (SSC CHSL 2017) Exp: Point elasticity is finding elasticity at any point on demand curve. Point Elasticity = % ΔQ % ΔP i.e. P Q × ΔQ ΔP by following the formula answer will be 2.4.

Answer 67

(B) (SSC CHSL 2017) Exp: Elasticity of demand =% change in Quantity demanded % change in price by putting values to the formula we will get answer 10%.

Answer 68

(B) (SSC CHSL 2017) Exp: By following Equilibrium price theory that propogate Quantity demanded = Quantity supplied Solving the equation answer will be 23250 units.

Answer 69

(B) (SSC CHSL 2017) Exp: Point Elasticity = %ΔinQ %ΔinP i.e. P ΔQ Q ΔP by putting values to the formula the answer recieved will be 1200 units.

Answer 70

(A) (SSC CHSL 2017) Exp: GDP calculation by expenditure method = private consumption + Investment + Government Expenses + foreign expenditure (Import-Export) So, Answer will be $625 million.

Answer 71

(B) [SSC CHSL 2017] Exp: Point Elasticity =% Δ inQuantity % Δ in price i.e. P Q × ΔQ ΔP by putting values to formula answer can be derived and i.e. Rs. 80.

Answer 72

(C) [SSC CHSL 2017] Exp: Equilibrium price is at which quantity demanded is equal to quantity supplied. So when floor price is more then there will be more production to access profits

Answer 73

(B) [SSC CHSL 2017] Exp: Equilibrium price is when quantity demanded equal to quantity supplied Equilibrium demand = supply. By putting values to formula, 100 will be the answer.

Answer 74

(C) [SSC CHSL 2017] Exp: Equilibrium quantity is equal to equilibrium demand so by putting D = S, answer can be arrived at 41,600

Answer 75

(D) [SSC CHSL 2017] Exp: Equilibrium is situation where quantity demanded equals to quantity supplied i.e. D = S. By putting value to formula answer of 41720 units.

Answer 76

(A) [SSC CHSL 2017] Exp: Elasticity of demand = % ΔQ % ΔP Q = quantity P = price put the values to formula and answer will be 7.5%.

Answer 77

(A) [SSC CHSL 2017] Exp: Equilibrium is situation where quantity demand equals to quantity supplied. S = D. Putting the values we will receive the answer i.e. 1500

Answer 78

(C) [SSC CHSL 2017] Exp: Elasticity of demand = Change in Quantity demand Change in price %% by putting values to formula we can reach to answer 8%.

Answer 79

(D) [SSC CHSL 2017] Exp: Cross elasticity of demand is response on a demand of product due to change in price of another product. Cross elasticity = % change in qu antity % rise in price Using this formula will get us to 1.22

Answer 80

(A) [SSC CHSL 2017] Exp: Arc elasticity of demand = 1 2 1 2 q -q q +q × 1 2 1 2 p +p p -p. Answer will be 0.5.

Answer 81

(B) [SSC CHSL 2017] Exp: Business cycle is increase or decrease in economic activity in long term having stages like expansion, peak and contraction that can be given economic name as growth, maturity & recession respectively. In depression there will be loss in economic activity so inventory will not be sold.

Answer 82

(C) [SSC CHSL 2017] Exp: Point elasticity is finding elasticity at a point on demand curve. P. Elasticity = % Q % P Solving above formula will result in 60 units.

Answer 83

(A) [SSC CHSL 2017] Exp:.Equilibrium is situation where demand equals supply fixing quantity and Price. If there is increase in demand, demand curve will shift to the right and with supply meeting it, price and quantity both will increase respectively.

Answer 84

(B) [SSC CHSL 2017] Exp: Arc Income elasticity of demand = 1 2 1 2 q -q q +q × 1 2 1 2 y +y y -y by following the formula answer realized will be 0.55

Answer 85

(B) [SSC CHSL 2017] Exp: Equilibrium is situation where demand matches supply equally. Formula Equilibrium demand = supply By putting values to formula answer will be 1000

Answer 86

(D) [SSC CHSL 2017] Exp: Equilibrium is situation where demand matches supply equally. Formula: Equilibrium demand = supply By putting values to formula answer will be 192,000 units.

Answer 87

(D)Exp: Equilibrium is situation where demand match supply equally. E demand = Supply by putting values to formula answer will be Rs. 2700.

Answer 88

(B) [SSC CHSL 2017] Exp: Point Elasticity is finding elasticity at a point on demand curve. Formula = P. Elasticity = % Quantity % in price By putting values to formula answer will be 1.

Answer 89

(C) [SSC CHSL 2017] Exp: Point Elasticity is finding elasticity at a point on demand curve. P. Elasticity = % inQuantity % in price By putting value to formula answer will be 200.

Answer 90

(B) [SSC CHSL 2017] Exp: Point elasticity is finding elasticity at a point on demand curve. P. Elasticity = % inQuantity % in price By putting values to the formula we will receive 2000 units.

Answer 91

(C) [SSC CHSL 2017] Exp: Equilibrium is situation where demand matches supply equally. Equilibrium demand = supply by putting value to formula answer will be 24,000 units.

Answer 92

(A) [SSC CHSL 2017] Exp: Equilibrium is situation where demand match supply equally. Equilibrium demand = supply By putting values to formula answer will be 18,000 units.

Answer 93

(C) [SSC CHSL 2017] Exp: Point Elasticity of demand: Finding Elasticity at point on demand curve. P Elasticity = % in Quantity % in price by putting the formula the answer received will be -0.6

Answer 94

(D) [SSC CHSL 2017] Exp: Equilibrium is a situation where demand matches supply. Equilibrium demand = supply By putting values to formula we will receive Rs. 200

Answer 95

(D) [SSC CHSL 2017] Exp: Point Elasticity is finding elasticity at point on demand curve. P. Elasticity = % Quantity % in price So by above formula, we will get value i.e. Rs 250

Answer 96

(B) [SSC CHSL 2017] Exp: Law of demand states that the ultimate aim of human is to maximize profit so when price of any good is increased demand will decrease and when price is decreased, demand for that product will increase.

Answer 97

(B) [SSC CHSL 2017] Exp: Point Elasticity is finding elasticity at point on demand curve. P. Elasticity = % Quantity % in price By putting value we will receive 4000 units as answer.

Answer 98

(D) (SSC (CGL) 2013) Exp: Giffen goods are those goods whose consumption increases as the price rises.

Answer 99

(B) (SSC (10+2) 2013) Exp: Goods purchased by consumer are goods for final consumption. Good purchased by someone to use it for furthur investment is also for final consumption. So in both situation these goods will be final goods.

Answer 100

(A) (SSC (LDC) 2005) Exp: Price discrimination is pricing strategy in which identical or similar goods are priced differently, according to different markets. In this, producer tries to get as much as price that consumer is willing to pay. So when the demand elasticity for two market is different then the price discrimination works.

Answer 101

(B) (SSC MTS 2006) Exp: Giffen goods and Inferior goods are sort of simillar to each other specially in case of relationship of demand and income. Giffen goods are those goods for which demand will decrease if the price of goods are reduced and people will tend to move towards alternative goods.

Answer 102

(A) (SSC (10+2) 2013) Exp: Price elasticity of demand is responsiveness of the demand in relation to change in price of product.

Answer 103

(D) (SSC MTS 2013) Exp: Formula 1>e>o is expressing that there is change in price but quantity is relatively less responsive to the change. In other words it can be understood as not very responsive to price so Relatively inelastic.

Answer 104

(B) (SSC MTS 2013) Exp: When percentage change in quantity is less than percentage change is price, this particular situation will be inelastic.

Answer 105

(C) (SSC MTS 2008) Exp: When there is large change in price of article but it is not effecting demand of that product that it will be called as perfectly inelastic.

Answer 106

(A) (SSC (10+2) 2014) Exp: Law of demand says that if there is increase or decrease in price of goods then there will be decrease or increase in demand respectively.

Answer 107

(B) (SSC MTS 2006) Exp: If there is increase in price of tomato it can be due to supply constraints, and situation here suits the condition where export of fresh tomatoes to other countries is done here resulting into less supply and increase in price.

Answer 108

(A) (SSC 10+2 2012) Exp: Law of demand holds true when keeping other things same, that means factors other than price like taste, preferences, income, price of related goods should be constant.

Answer 109

(C) (SSC 10+2 2011) Exp: Elasticity of essential goods like electricty, medicines, match box, milk etc is inelastic but the goods, if a consumer can subsititute them like other normal goods rice will be very elastic.

Answer 110

(D) (SSC CPO 2012) Exp: In market, generally price is decided by supply and demand in a market. Any good has its price if its supply is equal to its demand.

Answer 111

(D) (SSC CPO 2012) Exp: Derived demand refers to the demand rise as a result of rise in demand of other related product. Best example for Derived demand is rising demand of factors of production when there is demand of finished product.

Answer 112

(A) (SSC CGL 2013) Exp: Demand of Labour is derived demand beacause demand of labours depends upon demand of the produce that workers will be producing.

Answer 113

(B) (SSC (10+2) 2015) Exp: Perfectly inelastic demand means no responsiveness of demand in relation to price, so it will be equal to zero.

Answer 114

(C) Exp: Substitute goods are those which are replacable in consumption with each other, In other words people can switch to other products and can derive same utility. Eg:- Tea & Coffee, Rice & Wheat etc.

Answer 115

(A) (SSC LDC 2005) Exp: In Substitute goods if price of one good is increased or decreased, it will decrease or increase demand of other related goods respectively.

Answer 116

(B) (SSC T.A. 2008) Exp: Price discrimination is pricing strategy in which identical or similar goods are priced differently according to different markets. In this producer tries to get as much as price that consumer is willing to pay. So when the demand elasticity for two market is different then the price discrimination works.

Answer 117

(A) (SSC (10+2) 2014) Exp: Law of demand says that if there is increase or decrease in price of goods, then there will be decrease or increase in demand respectively

Answer 118

(C) (SSC (10+2) 2014) Exp: Semi-durable goods are those goods which are neither durable nor perishable like cloths, preserved foods, foods grains etc.

Answer 119

(C) (SSC (10+2) 2013) Exp: Supply function is expression of relationship between supply and factor that affect the producer like Price, factor inputs technology,taxes subsidies, output etc.

Answer 120

(A) (SSC (10+2) 2012) Exp: Complementary goods are those goods which are actively indulge in each other and makes final goods to consume. The demand here for one factor will have same effect on other related goods, so it is called as joint demand.

Answer 121

(D) (SSC (10+2) 2011) Exp: Joint supply is when a product that yield more than one output. Best suitable example for this is livestock industry like sheep giving meat as well as wool.

Answer 122

(B) (SSC (10+2) 2011) Exp: Inferior goods are those goods which have a negative income effect (or negative relation with income) and when the income rises, demand for inferior goods falls.

Answer 123

(A) (SSC CGL 20101) Exp: Need is state of feeling deprived of something and when the deprivation for particular goods is indentified it is called as want. Want when backed by ability to purchase or willingness to pay it is called as demand.

Answer 124

(A) (SSC T.A. 2009) Exp: Exceptional demand curve :- Normally demand carve is downward slopping i,e inverse relationship between demand and price but something it shows upward movement with increase in price this generally occurs when people fear that product shortage can happen soon.

Answer 125

(B) (SSC DEO 2008) Exp: Fall in demand and rise in supply of commodity will create excessive 'Buffer stock. So to sell the product there will be decrease in the price of that commodity so that sell could occur.

Answer 126

(A) (SSC TA 2008) Exp: Law of demand says that if there increase or decrease in price of goods then there will be decrease or increase in demand respectively

Answer 127

(A) (SSC CGL 2007) Exp: Giffen goods have unique responsiveness instead of Law of demand. Basically when price rises, quantity demanded will increase and vice-versa, so demand curve for a Giffen good is upward rising instead of general demand curve i.e downard sloping.

Answer 128

(B) (SSC TA 2007) Exp: Supply of agricultural products is generally inelastic in short term because when a crop is sown suddenly farmers can't raise supply by growing more crop. because time is required for the yield to take place.

Answer 129

(A) (SSC SO 2007) Exp: Luxury goods are those goods whose demand increases in more proportion than increase in income. Luxury goods are also goods with uniqueness and limited supply.

Answer 130

(D) (SSC CGL 2007) Exp: Engel's law state that as the income rises the proportionate, expenditure from income on food products decreases.

Answer 131

(C) (SSC CPO 2006) Exp: Free goods are those goods which are not scarce and can be available by just the virtue of living organisms. Examples are air, sea water, sun light etc.

Answer 132

(B) (SSC SO 2006) Exp: When the price of tea fall the demand for coffee will also fall due to substitution effect.

Answer 133

(C) (SSC MTS 2006) Exp: Low elasticity of demand because it will generate income for the government and due to low elasticity, consumer will consume in any way the goods which are essential in nature.

Answer 134

(B) (SSC MTS 2006) Exp: Joint demand is demand for the goods which are usually complementary so they will be demanded jointly and in a fixed proportion.

Answer 135

(D) (SSC CPO 2006) Exp: Law of demand holds true when keeping other things same, that means factors other than price like taste, preferences, Income, price of related goods should be constant.

Answer 136

(D) (SSC MTS Exam, 2006) Exp: Keynesian psychological law of consumption state that as income rises the expenditure also increases but not in same proportions, having saving from income as new share from raised income.

Answer 137

(A) (SSC CPO 2004) Exp: According to Keynesian theory of income determination, at full employment there is a fall in aggregate demand causing a fall in price of output and resources because theory says that income depends on employment which depends on effective demand and also depends on consumption expenditure and investment expenditure.

Answer 138

(A) (SSC CPO 2003) Exp: Inferior goods are those goods whose demand decreases as increase in income of consumer and vice-versa.

Answer 139

(B) (SSC SO 2003) Exp: Demand is a want backed by ability to purchase and willingness to buy.

Answer 140

(B) (SSC SO 2001) Exp: When there is change in demand leading to shifting of demand curve to right keeping price at same, quantity demanded will increase.

Answer 141

(A) (SSC SO 2001) Exp: Movement along the same demand curve is caused by change in price of the commodity it self and this is referred as increase (extension) and decrease (contraction) of demand.

Answer 142

(B) (SSC SO 2001) Exp: Luxury goods demand increases in more proportion to increase in income. Thus responsiveness of demand is more, so elasticity of demand here will be greater than one.

Answer 143

(B) (SSC MTS 2001) Exp: Elasticity is responsiveness to the change in demand of commodity due to change in its price.

Answer 144

(C) (SSC MTS 2000) Exp: Necessity goods are those goods which are very essential so their demand is very less or zero responsive to change in price like salt, medicines etc.

Answer 145

(D) (SSC MTS 2000) Exp: Pepsi, Coke 7up, they all are coldrinks, homogenous so substitute goods. If price of Pepsi decreases the demand for its substitutes like Coke and 7up will decrease.

Answer 146

(B) (SSC Steno. 2014) Exp: Ink and fountain Pen is example of joint supply beacause usually are produced by a single producer.

Answer 147

(B) (SSC CPO 2008) Exp: Final goods are goods that are consumed rather than used in furthur production.

Answer 148

Ans (C) (SSC MTS 2008) Exp: Income is necessary for demand. Its a major factor in demand because with change in income demand also changes.

Answer 149

(A) (SSC CGL 2017) Exp: There are some exceptions to law of demand:- 1. Conspicuous goods 2. Giffen goods 3. Conspicuous necessities 4. Demand for necessities 5. Speculative goods

Answer 150

(C) (SSC CGL 2017) Exp: Market demand curve is total of all individual demand curves. So, market demand curve represents the demand of all consumers in the market taken together at different level of prices of the good.

Answer 151

(B) (SSC CGL 2017) Exp: The most accepted theory of General Equilibrium was developed by French economist Leon Walras. This theory suggested that all prices and quantities are determined through interaction of several markets with one another.

Answer 152

(C) (SSC CGL 2017) Exp: In a market system, the central problems regarding how much and what to produce are solved through price mechanism. Price mechanism is a system to fix price where demand equals supply.

Answer 153

(A) (SSC CGL 2017) Exp: Normal Goods:- Normal goods are any goods for which demand increase when income increases and falls when income decreases but price remains constant. Examples: food stables, clothing and household appliances.

Answer 154

(B) (SSC CGL 2017) Exp: Inferior good are those goods whose demand decreases (increases) with increase (decrease) in income.

Answer 155

(A) (SSC CPO 2017) Exp. Complementary goods are those goods which are consumed together. Like Pen and Ink. If price of complementary good falls, the demand for the product increases. Hence demand curve will shift forward.

Answer 156

(A) (SSC Combined Matric Level 2000) Exp: Intermediate consumption is that stage of consumption at which goods and services are utilized as inputs for further production.

Answer 157

(A) (SSC Combined Matric Level 2002) Exp: Consumer's surplus is extra amount that consumer realise when he is willing to pay more than the seller's selling price. Or simply consumer surplus = Expected payment-Actual payment.

Answer 158

(A) (SSC (10+2) Level DEO & LDC 2011) Exp: Marignal propensity to consume is ratio of change in consumption due to change in income. It lies between 0 to 1.

Answer 159

(A) (SSC Sec. Officer 2001) Exp: Marginal efficiency of capital is the return on investment generally investor invest when return on investment is greater than interest rate.

Answer 160

(D) (SSC Combined Matric Level 2002) Exp: Consumption function a formula developed by J.M. Keynes that shows relationship between real disposable income and consumer spending. It lays very much stress on importance of consumer spending in creating demand in economy.

Answer 161

(D) (SSC Combined Matric Level 2006) Exp: Keynes psychological law of consumption states that as the income of consumer increases, expenditure on consumption also increases but not as much as increase in income.

Answer 162

(B) (SSC (10+2) Level DEO & LDC 2011) Exp: Consumption and income are directly related as the income rises consumption rises and as it decreases consumption also decreases.

Answer 163

(B) (SSC CGL Tier-I 2014) Exp: It is believed that consumer's income is used in consumption and if remains left, it is used for savings for future. So income = consumption + savings

Answer 164

(C) (SSC CGL Tier-I 2014) Exp: Consumption function a formula developed by J.M. Keynes that shows relationship between real disposable income and consumer's spending. It lays very much stress on importance of consumer's spending in creating demand in economy.

Answer 165

(B) (SSC CGL Tier-I 2014) Exp: Marginal propensity to consume: According to Keynesian consumption function, as the income increases average propensity to consume falls in short term.

Answer 166

(A) (SSC CGL Tier-I 2015) Exp: According to marshall, the basis of consumer surplus is based on law of diminishing marginal utility i.e. as the consumption increases, the satisfaction or utility derived from that product diminishes.

Answer 167

(A) (SSC (10+2) 2014) Exp: Collective consumption refers that goods and services produced are consumed at commodity level or area level such as households living in a particular region.

Answer 168

(D) (SSC SO 2006) Exp: Consumer sovereignty is a concept that propounds consumer as decision maker in each aspect like from what to produce, for whom to produce and what should be price.

Answer 169

(D) (SSC 10+2 2015) Exp: Marginal utility = New total utility - old total utility by following the formula the answer will be -5.

Answer 170

(B) (SSC Tax Asst. Exam, 2009) Exp: Ultility in economics refers to satisfaction received from consumption of a commodity. Usefulness means being of some use or when a commodity serve some purpose.

Answer 171

(A) (SSC (10+2) 2014) Exp: Psychological law of consumption states that with increases in income, consumption also increase but not in equal proportionate. Consumption in comparision to increase in income is less proportionate.

Answer 172

(C) (SSC CPO 2004) Exp: According to law of diminishing marginal utility, increase the level of satisfaction driven diminish with consumption of successive units. There will be a situation where marginal utility is zero, it means adding one more unit of goods will not add to any benefit to production or consumer. In that case, it shows total utility is maximized. When MU is zero, it means that every additional unit of a good does not add any benefits to the consumer. In that case total utility is maximized.

Answer 173

(D) (SSC CPO Exam, 2003) Exp: According to law of diminishing marginal utility as the quantity of goods with consumer increases, marginal utitlity of the goods to him expressed in terms of money falls. So the marginal utility curve is downward sloping.

Answer 174

(B) (SSC MTS Exam, 2011) Exp: Utility is level of satisfaction derived by consumption of goods and services.

Answer 175

Ans: (D)Exp: Relationship between Total utility and Marginal utility- 1. MU is rate of change in TU 2. When MU is zero TU is maximum 3. When MU become negative TU will decline. 4. When MU decreases TU increases at decreasing rate.

Answer 176

(A) (SSC CPO 2004) Exp: Utility function is an important concept that states the utility derived by consumer for all goods consumed represents welfare and their preferences.

Answer 177

(B) Exp: Marginal utility is utility driven by consuming one additional unit of good. Average utility is utility derived by per unit of consumption and it is always positive and remain above x-axis. When average utility attains maximum value, it will be equal to marginal utility.

Answer 178

(A) Exp: Point of satiety is the stage where one more additional unit consumption is not contributing in increasing total utility. So at point of satiety, marginal utility is zero.

Answer 179

(A) Exp: Second law of Gossen states that consumer will distribute his resources or income in such a way that utility dervied from last single penny on expenditure is equal. Consumer is in equilibrium when marginal utility of expenditure on each article is same.

Answer 180

(A) [SSC CHSL 2017] Exp: Total utility is the overall quantified satisfaction by consuming goods and services, so it is measured by price of goods and services value in use.

Answer 181

(D) [SSC CHSL 2017] Exp: Consumer Surplus = Consumer willing to pay- Actual pay By this answer will be 110.

Answer 182

(D) [SSC CHSL 2017] Exp: Producer surplus is extra amount realised by selling a product expecting the sell to happen at lower price. Net extra amount above expected amount is considered as producer surplus.

Answer 183

(C) [SSC CHSL 2017] Exp: Producer surplus is extra amount realised by selling a product expecting the sell to happen at lower price. Net extra amount above expected amount is considered as producer surplus.

Answer 184

(A) [SSC CHSL 2017] Exp: Marginal revence of product = (P2 × Y2) - (P1 × Y1) P1 = old price/article P2 = New price/article Y1 = old units produced before Y2 = New units produced By putting the formula, answer will be Rs. 1500

Answer 185

(A) [SSC CHSL 2017] Exp: Consumer surplus = expected price - (market price discount) By putting the formula, answer will be Rs. 3000

Answer 186

(B) [SSC CHSL 2017] Exp: Consumer surplus is surplus over the expected or willingness to pay over actual payment, so increase in price will lead to decrease in consumer surplus.

Answer 187

(B) [SSC CHSL 2017] Exp: Consumer surplus = willingness to pay - Actual payment By putting value of formula answer will be Rs. 12500.

Answer 188

(D) [SSC CHSL 2017] Exp: Micro-Economics is study of economics at individual level. We mainly study following in Micro-Economics 1. Product Pricing 2. Consumer Behaviour, consumer equilibirum 3. Factor pricing 4. Study of firm 5. Economic conditions of a section of people.

Answer 189

(B) (SSC CGL 2017) Exp: Indifference curve is the graphical representation of various combinations of two commodities leading to the same level of satisfaction from each combination.

Answer 190

(B) (SSC CPO 2017) Exp. Indifference curve is curve that shows combination of two commodities resulting same level of satisfaction. Marginal rate of substitution is used to measure slope of indifference curve.

Answer 191

(A) (CPO SI 2003) Exp: Economic Rent only include income or payment that arises due to use of land only.

Answer 192

(D) (SSC CPO SI 2003) Exp: Marginal utility curve shows relationship between marginal utility i.e utility obtained from consuming an additional unit of goods or quantity of goods consumed. It shows inverse relaionship between marginal utility and stock. In other words, as more of product is consumed, the marginal benefit to consumer falls.

Answer 193

(B) (CPO SI 2003) Exp: Factors of productions are inputs for further production, each factors has its role like land, labour capital and Entrepreneur. Entrepreneur have the main role to manage production process and to review working etc.

Answer 194

(C) (CPO SI 2003) Exp: Marginal utility measures extra utility derived from consuming additional unit of product. Total utility is total satisfaction derived from consumption. These two utility are related by law of diminishing marginal utility i.e, as consumption increases, marginal utility diminishes and at the stage when it is zero this means there will no further increase in total satisfaction. So, when MU is zero, TU is Maximum.

Answer 195

(D) (SSC CPO SI 2005) Exp: Operating surplus of enterprise measures the difference between revenue and expenditure.

Answer 196

(A) (SSC Sec. Officer 2005) Exp: Social cost is amount out of private and external costs, borne collectively by society on recurring basis. These cost may occur due to any event, action or policy changes.

Answer 197

(B) (SSC Tax Assistant (Income Tax & Central Excise 2006) Exp: If there is increase in nominal wage keeping price level constant, it will increase real purchasing power of labour. But when price level increase, it will decrease the purchasing power hence real wages decreases.

Answer 198

(D) (SSC Sec. Officer 2006) Exp: Law of diminishing returns state that in all the process of production adding more factors of production will at some points yield lower unit returns.

Answer 199

(D) (SSC Sec. Officer 2006) Exp: Entrepreneur performs various fuctions right from starting of generation of idea, implementing the idea then supervising production and many more. Key function of entrepreneurship involves decison making on the basis of keeping in mind the risks. So risk bearing is most essential function of entrepreneurs.

Answer 200

(B) (SSC Sec. Officer 2007) Exp: Human Capital is stock of various qualities like creativity, competency, social skills, performance ability all are focused towards producing something of economic value, So knowledge, technical skills and education are considered under human capital.

Answer 201

(A) (SSC Tax Assistant (Income Tax & Central 2008) Exp: Production literally means conversion of inputs into output. Output is function of input. So production function is formula to show relationship between inputs that can be used for producing maximum output. Production function expresses technological relationship between physical inputs and outputs.

Answer 202

(A) (SSC Tax Assistant (Income Tax & Central 2008) Exp: According to Keynesian theory, liquidity preference is demand for money and when someone supplies it through his saving he will received reward in form of interest. This theory explains determination of interest rate by supply and demand for Money.

Answer 203

(A) (SSC CPO SI 2009) Exp: labour intensive techniques are technology or process of production that needs good amount of labours in comparision to capital investment. This happens very much in small scale industries and personalised products. So high level of labour can only be achieved in labour surplus economy only. Hence, labour intensive technique would get chosen in labour surplus economy.

Answer 204

(A) (SSC FCI Assistant Grade-III 2012) Exp: Exchange value of a commodity is expressed in terms of money. This expression have given the money a status of medium of exchange. Basically, value of a commodity is price of that commodity.

Answer 205

(C) (SSC Combined Matric Level 2001) Exp: Division of labours is process of differentiating various stages of production and assigning worker at each stage as their work specialisation. This phenomenon can only occur when market is huge because in small size market production process cannot be differentiated and no person can dedicate himself entirely to one small stage. So division of labour can be limited by extent of market

Answer 206

(C) (SSC Combined Matric Level 2002) Exp: Law of diminishing returns state that in all the process of production adding one more factors of production will at some point yield lower per unit returns, so when industry is operating at diminishing returns it becomes prudent to determine the size of output.

Answer 207

(B) (SSC Steno. 2011) Exp: Exploitation of labours is considered when wages given to labour is less than its marginal revenue product. In simple words wage is less than revenue generated by one more unit of labour in production.

Answer 208

(D) (SSC (10+2) Level DEO & LCD 2011) Exp: Cost of production is sum paid for the use of factors of production. Like payment for land, Labour, capital and entrepreneur in form of rent, wages and interest and normal profit respectively.

Answer 209

(B) (SSC Const. (GD) 2012) Exp: Wage fund theory propounded by J.S.Mill. This theory states that in certain circumstances wages could rise above subsistence level so to handle this, a fund of capital has to be accumulated before wages could be paid.

Answer 210

(D)Exp: Real wage is amount of money for that consumer will have real purchasing power. It can be calculated by = Money wage Price level

Answer 211

(A) (SSC (10+2) Level DEO & LDC 2012) Exp: Plant and machinery are goods used for production. These can be termed as factors of production. So these will be considered as producer's goods.

Answer 212

(C) (SSC MTS 2013) Exp: An enterpreneur is a person who uses factors of production for the creation of article with some economic value. Entrepreneur uses land, labour, machines for production and realises value of production. After deducting all payments and depreciation from value of production, recieved amount will be net profit.

Answer 213

(A) (SSC (10+2) Level DEO & LDC 2013) Exp: According to Adam Smith, consumption is the objective of production done. In other words production's objective is satisfaction of human desire.

Answer 214

(A) (SSC (10+2) Level DEO & LDC 2013) Exp: law of variable proportion Three stages TP y x AP MP Amount of variable factors O utp ut Stage I Stage II Stage III 1. In first stage average production increases with total product and MP 2. Second stage is when average product and marginal product start falling 3. Third stage is when marginal product is negative and total product falls but average product is still positive.

Answer 215

(D) (SSC MTS 2014) Exp: Transfer payment is amount paid or receive in which no exchange of goods and services is done. Like subsidised government programme.

Answer 216

(D) (SSC MTS 2014) Exp: Return to scale is rate at which production increases due to increase in input or factors of production in long run.

Answer 217

(A) (SSC CAPFs SI, CISF ASI & Delhi 2014) Exp: Law of diminishing marginal utility says that utility by consuming one more successive unit goes on decreasing. Consumer will consume the goods up-to the stage where utility driven from object is equal to marginal utility of money he is paying. So Consumer gets maximum satisfaction at the point where marginal utility equals to price a consumer is paying.

Answer 218

(B) (SSC CGL Tier-I 2014) Exp: In economics production is creation of satisfaction that have economic value for exchange. In simple words creation of utility having value of exchange.

Answer 219

(A) (SSC CGL Tier-I 2014) Exp: Law of diminishing returns state that in all the process of production adding one more units of factors of production will at some point yield lower per unit returns.

Answer 220

(A) (SSC CGL Tier-I 2014) Exp: Factor pricing is determination of price for different factors. Alternatively it is called as Theory of functional distribution.

Answer 221

(B) (SSC CHSL (10+2) DEO & LDC 2014) Exp: Internal rate of return is yield by investement done. It is Calculated as a discount rate that make net present value of cash (i.e. present value profit in comparison to present value of cost) equal to Zero.

Answer 222

(D) (SSC (CHSL (10+2) DEO & LDC 2014) Exp: labour demand curve shows relationship betweeen wages and quantity of labour. It is downward sloping curve because as the wage increases, workers become expensive to firms resulting less quantity of labour. So when productivity increases labour demand curve shift to right. W a ges/hour Quantity of labour «

Answer 223

(D) (SSC Const. (GD) 2015) Exp: Labour is one of primary factors of production. Labour can be explained as the amount of mental or physical effort for the production of goods and serivces. So Labour is the manmade (human effort) instrument of production (mental physical dedication for production or the way through work will be done)

Answer 224

(A) (SSC Sec. officer 2001) Exp: Marginal efficiency of capital displays the expected rate of return. ''J.M. Keynes described marginal efficiency as rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal to its supply price''

Answer 225

(B) (SSC CGL Pre 2007) Exp: Capital-output ratio is a measure to show the amount of capital needed for one unit of production. In other words, it is amount of capital essential to produce one unit of output.

Answer 226

(B) (SSC Tax Assitant (Income Tax & Central Excise 2004) Exp: In economics, investment is purchase of goods to create wealth. It is a kind of goods that one purchases with objective of getting returns from it in future. In business, it will be considered as capital but due to wear and tear, value depreciates. So investment will be equal to gross total of capital assets minus wear and tear.

Answer 227

(B) (SSC Tax & Central Excise 2004) Exp: Inventory is stock of goods that are of some economic value either stock for future or for furthur production or portion of assets kept for a reason.

Answer 228

(C) (SSC Sec. Officer 2005) Exp: In economics, investment is purchase of goods to consume in future to create wealth. It is kind of goods that one purchased with objective of getting returns from it in future. In business it will be considered as capital but due to wear and tear, value depreciates. So investment will be equal to gross total of capital assets minus wear and tear.

Answer 229

(B) (SSC (south zone) Investigator 2010) Exp: According to J.M. keynes investment is ''construction of new capital asset like Machinery or factory building''.

Answer 230

(D) (SSC Combined Matirc Level 2001) Exp: According to J.M. Keynes demand for money is beacuse money yields convenience. Keynes said that money is demanded due to three main motives :- 1. Transactions motive for making transaction or exchange 2. Precautionary motive for contingencies 3. Speculative Motive by seeing speculation in demand for money.

Answer 231

(A) (SSC CAPFs SI, CISF ASI & Delhi Police 2015) Exp: Return to scale shows increase in production due to change in factors of production. When inputs are increased less and output increases more then it is increasing return to scale. When inputs are increased by same value and output increases in same proportion, it is constant return to scale. When proportional increase in output is less than increase in inputs, then it is decreasing return to scale.

Answer 232

(A) Exp: Labour in economics is work done expecting monetary rewards including both physical and mental work.

Answer 233

(B) Exp: Depreciation is loss in value of machinery due to wear and tear by use of machinery.

Answer 234

(A) [SSC CHSL 2017] Exp: Break even quantity is value of articles sold equal to the total cost. Formula Break even point = Fixed cost ÷ (price - variable cost) Answer recieved will be 20000

Answer 235

(A) [SSC CHSL 2017] Exp: Minimum wage is the minimum price below which workers will not be ready to work.

Answer 236

(D) [SSC CHSL 2017] Exp: Breakeven quantity is number of quantity that has to be sold to equals the value of cost acquired in Production Formula Breakeven point = Fixed cost (Price-Variable cost) By following formula we will get value i.e. 250

Answer 237

(D) [SSC CHSL 2017] Exp: Insuring minimum floor wage directly impacts current wages usually by increase in wages.

Answer 238

(B) [SSC CHSL 2017] Exp: Minimum wage is the amount that workers legally deserve or it also can be said as minimum floor level of wage below which workers will not perform. Minimum wage helps in relation to reduction in poverty, raise standard of living in contrast to its harmful effect, like rise in business cost resulting higher product price and increasing dependency on minimum wage.

Answer 239

(B) [SSC CHSL 2017] Exp: Marginal resource labour cost = New cost - Old Cost By putting the formula, answer will be Rs. 850

Answer 240

(B) [SSC MTS 2014] Exp: Factors of production in economics are the basic inputs that are needed for production. Factors of production are land, labour, capital & Enterprenur.

Answer 241

And. (D) Exp: Production is process of workers using various inputs and converting them into some value that can be sold to consumer. Service done by housewife in her own house is not quantified usually so it will be not included in production.

Answer 242

(D) Exp: Return to scale is rate at which production or output respond due to change in input or factors of production in long run.

Answer 243

(A) Exp: Internal economics are economics occured when firm expand its work and due to this, economies in production occur.

Answer 244

(A) (SSC 10+2 2013) Exp: Law of variable proportionate explains three situations: 1. Increasing return 2. Diminishing return 3. Negative return

Answer 245

(C) (SSC CGL Exam, 2010) Exp: Producer's surplus is measurment of revenue realised. It occurs when producer receives revenue more than he was willing to accept and sells its produce.

Answer 246

(B) (SSC LDC 2005) Exp: Production function means relationship of inputs with final output.

Answer 247

(B) Exp: Relationship between Marginal product of labour and average product of labour 1. If M.P. is less than APL than average product declines. 2. If M.P. is greater than APL than average proudct rise 3. If M.P. is equal to APL then average product do not changes.

Answer 248

(B) Exp: Economies of scale is a situation in economics when with increased production, factors of production operating at maximum efficiency leads to decline in cost of prodcution. This phenonomen is a long run feature in production.

Answer 249

(C) (SSC MTS. Exam, 2006) Exp: Production function shows relationship between input and ouputs. So it signifies industrial relation.

Answer 250

(B) Exp: Factors of production in economics are the basic input that are needed for production. Factors of production are land, labour, capital & Entrepreneur

Answer 251

(A) Exp: Iso product also known as Isoquant or product indifference curve shows combination of two inputs that will give same level output. In other words, Iso product is graphical representation of inputs combination for same level output. Iso cost shows different combination of labour and capital that the firm can buy for a given prices and the same amount of cost.

Answer 252

(B) (SSC T.A Exam, 2007) Exp: Total product increasing at increasing rate leads to increase in marginal product.

Answer 253

(C) Exp: In economics, production means creating utility. Utility Means Satisfaction. Generated by consuming any unit of production.

Answer 254

(A) (SSC (10+2) Exam, 2011) Exp: Marginal propensity to consumer lies between 0 to 1. Marginal propensity to consume measures the portion of extra income that is spent on consumption.

Answer 255

(C) (SSC (10+2) Exam, 2010) Exp: Production function shows relationship between input and output so it signifies industrial relation.

Answer 256

(A) Exp: Isoquant shows combination of two inputs or factors of production resulting same level of output. In other words Iso quant shows the limitation to the firm for ability to substitute products.

Answer 257

(C) (SSC MTS Exam, 2002) Exp: Diminishing return in economics means decrease in marginal output as the increase in amount of only single factor of production while keeping all other factors of production same.

Answer 258

(A) (SSC MTS Exam, 2001) Exp: Factors of production in economics are the basic input that are needed for production. Factors of production are land, labour capital & entrepreneur

Answer 259

(D) (SSC CGL April Exam, 2014) Exp: Minimum payment of factor of production is minimum amount that is charged against factors of production at no production stage too. This cost is called as transfer payment because nothing (goods or service) is exchanged against this payment.

Answer 260

(C) (SSC CPO Exam, 2009) Exp: Quasi rent is almost rent but not economic rent. It is amount earned when demand of product rises suddenly and extra earning other than from land in short run is quasi-rent.

Answer 261

(B) Exp: Isoquant shows combination of two inputs or factors of production with same level of output. In other words Iso quant shows the limitation to the firm for ability to substitute products.

Answer 262

(B) (SSC Tax Asst. Exam, 2006) Exp: Real wages are actual wage after adjusting or deducting variable factors like inflation etc. So if price level increases then the wage will decrease.

Answer 263

(C) (SSC CGL April 2014) Exp: Quasi rent is a term in economics that describes certain types of returns to firm. It is a temporary phenomenon.

Answer 264

(B)Exp: Production function relates physical input to output or production. It shows combination of inputs generating maximum level of output.

Answer 265

(A) Exp: Return to scale is rate at which production increases due to increase in input or factors of production in long run.

Answer 266

(A) (SSC CGL 2017) Exp: Law of diminishing marginal product says that if we keep increasing the employment of an input with other inputs fixed, eventually a point will be reached after which the resulting addition to output will start falling.

Answer 267

"(B) (SSC CGL 2017) Exp: Law of variable proportion according to Benham is ""As the proportion of the factor in a combination of factors is increased, after a certain point, first the marginal and then the average product of the factor will diminish""."

Answer 268

(A) (SSC CGL 2017) Exp: Total product is the relationship between the variable input and output, keeping all other inputs constant. Total product is the overall quantity of output that is produced in the firm.

Answer 269

(C) (SSC CGL 2017) Exp: Isoquant represent possible combinations of two inputs that yield the same level of output

Answer 270

(A) (SSC CGL 2017) Exp: Marginal product is the change in output on one more successive unit of input employed in production process. So, Marginal product of an input can be defined as the change in output per unit of change in the input when all other inputs are held constant.

Answer 271

(B) (SSC CGL 2017) Exp: Production function shows the relationship between inputs and outputs. Basically, production function directly relates the output produced to inputs.

Answer 272

(D) (SSC CGL 2017) Exp: Average Product:- Output produced per unit of a variable input, holding all other inputs fixed is called Average product. It is calculated by dividing total product by the quantity of the variable input.

Answer 273

(B) (SSC Sec. officer 2001) Exp: Economies of scale is a long run concept, refers to situation when per unit cost decreases due to mass production.

Answer 274

(D) (SSC Sec. officer 2001) Exp: Opportunity cost is cost measured for the value of best next alternative that is not choosen. In other words opportunity cost is sacrificed value due to choosing second best alternative.

Answer 275

(C) (SSC Sec. officer 2006) Exp: The prime cost calculates manufactured products cost like the use of raw materials and direct labour, but does not calculates indirect manufacturing expenses such as the cost for a company logo or gas used to deliver the product.

Answer 276

(D) (SSC CPO SI 2008) Exp: Average Cost and Marginal cost both get affected by production. In long run when economies of scale occurs, average cost i.e. total cost per unit goes decreasing. At this stage Marginal cost of production is less than the average cost.

Answer 277

(C) (SSC CGL 2011) Exp: Break-even point is the point where cost of production will be equal to revenue realised. This situation is no loss no profit for company.

Answer 278

(B) (SSC Combined Matric Level 2000) Exp: Average cost is total cost per unit so if output increase, same amount of fixed costs is spread over large number of units so average fixed cost falls.

Answer 279

(C) (SSC Combined Matric Level 2000) Exp: Break-even point is the point where cost of production will be equal to revenue realised. This situation is no loss no profit for company.

Answer 280

(C) (SSC Combined Matric Level 2000) Exp: Selling cost is cost increased or foregone for promotion of sales of production. It is total cost of advertising marketing etc.

Answer 281

(A) (SSC Combined Matric Level 2006) Exp: Full cost pricing is practice where total cost incurred on production is divided by units produced and after getting average cost, profit margin is added then final price is fixed which is charged by the producer.

Answer 282

(D)Exp: Fixed costs are cost or expenses done on basic infrastructure or for the cost occurred that tend to be same regardless to the level of production like building office supplies etc.

Answer 283

(D) (SSC Const. (GD) 2012) Exp: Selling cost is cost increased or foregone for promotion of sales of production. It is total cost of advertising, marketing etc.

Answer 284

(C) (SSC FCI Assistant Grade- III 2012) Exp: Marginal cost is addition to total cost by producing an additional unit of output by a firm.

Answer 285

(D) (SSC Graduate Level Tier-I 2013) Exp: Opportunity cost is cost measured for the value of best next alternative that is not choosen. In other words opportunity cost is sacrificed value due to choosing second best alternative.

Answer 286

(A) (SSC CAPFs SI, CISF ASI & Delhi 2014) Exp: Average cost is total cost per unit. Marginal cost is addition to total cost by producing one more unit. When cost rises, marginal cost also rises. With the increase in production, average cost falls and marginal cost is lower than average cost.

Answer 287

(A) (SSC CGL Tier-I 2015) Exp: Marginal cost is addition to total cost by producing one more unit. MC is free from fixed cost beacuse fixed cost do not change with production but variable cost does. Since variable cost changes with production, marginal cost relates to it.

Answer 288

(D) (SSC (10+2) Steno. Grade 2016) Exp: Average fixed cost is total fixed cost divided by total unit or in other words per unit fixed cost. Increase in production leads to division or spread of fixed cost so average fixed cost decreases. Average fixed cost is downward sloping curve.

Answer 289

(C) Exp: Selling costs are the expenses occurred for the sale of products like advertisement, free sampling services and so on. Under Monopolistic competition due to product differentiation effort or campaign to sell the product is done, thus creating selling cost.

Answer 290

(A) [SSC CHSL 2017] Exp: Marginal resource = New cost - old cost Putting the formula answer will be 600

Answer 291

(D) [SSC CHSL 2017] Exp: Arc Elasticity of demand = ΔQx ΔPy × 1 2 1 2 Py Py Qx Qx Py1 = The price of good Y at first time Py2 = The price of good Y at second time Qx1 = Quantity demanded of X good at first time Qx2 = Quantity demanded of X good of second time Δ Qx = Change in quantity demanded of good X. Δ Py = Change is price of good Y. Answer = 0.8

Answer 292

(C) [SSC CHSL 2017] Exp: Cost = (Variable cost + Fixed cost) × total quantity of goods produced. By this formula the answer will be 45,000

Answer 293

(C) [SSC CHSL 2017] Exp: Total Cost = (Variable cost + Fixed cost) × total quantity of goods produced. By following this formula answer will be 36.

Answer 294

(A) [SSC CHSL 2017] Exp: Total cost = (Variable cost + Fixed cost) × Total number of goods produced. by following this formula answer will be 21,600

Answer 295

(B) [SSC CHSL 2017] Exp: Price floor for any product is minimum price of the product. Price floor is used by government to prevent prices from being too low.

Answer 296

(B) [SSC CHSL 2017] Exp: Marginal resource cost = New cost - Old cost By putting value to equation, we will receive answer i.e. Rs. 850.

Answer 297

(D) [SSC CHSL 2017] Exp: Accounting profit include implicit costs so Accounting profit Economic profit + implicit cost. By putting values to equation we will reach at 78.5 crore.

Answer 298

(A) [SSC CHSL 2017] Exp: fixed cost = (Total cost - variable cost) quantity of production.

Answer 299

(A) [SSC CHSL 2017] Exp: Total cost = (Average cost + Fixed cost) × quantity Practiced by following above formula, the answer realised is Rs. 1000.

Answer 300

(C) [SSC CHSL 2017] Exp: Economic profit = total Revenue - (Explicit costs + implicit costs)

Answer 301

(D) [SSC CHSL 2017] Exp: Breakeven point = Fixed cost (Price-Variable cost) by following the formula we will realise Rs. 9000 as answer.

Answer 302

(C) [SSC CHSL 2017] Exp: Perfectly competitive firm exists in perfect competition market i.e. large number of buyer and sellers having identical products. So there will be no difference in price and marginal cost usually.

Answer 303

(D)Exp: Marginal cost = New cost Including new worker - Previous total cost. By putting values to formula, we will receive Rs. 1350.

Answer 304

(D) [SSC CHSL 2017] Exp: Profit = Total revenue - (Fixed cost + Variable cost)

Answer 305

(D) Exp: Opportunity cost is representation of benefit that a person missed by choosing another alternative. It can also be said as an alterantive value given up when a decision is made.

Answer 306

(B) [SSC CHSL 2017] Exp: When the output increases, being fixed cost constant average fixed cost decreases.

Answer 307

(C) (SSC Steno Exam, 2011) Exp: Explicit costs are cost or payment occured due to others in course of runing an organization. Examples are wage, rent and materials used in production.

Answer 308

(B) (SSC 10+2 Exam, 2012) Exp: Marginal cost is the additional cost increased for one more unit production. Marginal cost = Change in total cost Change in output

Answer 309

(C) (SSC 10+2 Exam, 2013) Exp: There are two types of cost on the basis of payments. Implicit cost and explicit cost. Implict costs are cost that does not take a form of cash and neither these costs are recorded. whereas explicit costs are cost occurred in form of cash and are recorded in books.

Answer 310

(A) (SSC Steno Exam, 2012) Exp: Economic cost is revenue foregone during the production It can be expressed with the payment made in cash and opportunity cost occurred. So Economic cost = Explicit cost + implicit cost + normal cost.

Answer 311

(D) (SSC CGL July Exam, 2014) Exp: In the long run fixed cost also become variable cost beacause long run is sufficient time for all fixed inputs to become variable inputs.

Answer 312

(B) (SSC (10+2) Exam, 2013) Exp: Marginal cost is the additional cost increased on one more unit of production. Marginal cost = Change in total cost Change in output

Answer 313

(D) (SSC Const (GD) Exam, 2012) Exp: Selling costs are expenses done by sales department for the promotion of sales like marketing and advertisement etc.

Answer 314

(C) (SSC (10+2) Exam, 2012) Exp: Average fixed cost curve is never 'U' shaped because fixed cost do not changes with change in output. Thus average fixed costs falls continously. Average fixed cost can never be zero as well.

Answer 315

(C) (SSC Stenographer Exam, 2011) Exp: Explicit cost is payment directly made to other. like payment of wages etc and these costs are recorded in books.

Answer 316

(D) (SSC (10+2) Exam, 2011) Exp: For production the basic needed things are factors of production like land, labour, capital, entrepreneur etc. and for these, payments are done in form of rent, wage, interest and profit respectively. These payments done in exchange of factors of production are called as factor cost or cost of production.

Answer 317

(A) (SSC CPO Exam, 2009) Exp: Opportunity cost is cost measured for the value of best next alternative that is not choosen. In other words opportunity cost is sacrificed value due to choosing second best alternative.

Answer 318

(D) (SSC Tax Asst. Exam, 2008) Exp: Average cost is cost per unit of output. Marginal cost is addition to total cost by producing one more unit. So marginal cost of production lies below average cost when average cost falls.

Answer 319

(C) (SSC SO Exam, 2006) Exp: The prime cost calculates manufactured products cost like the use of raw materials and direct labour, but does not calculates indirect manufacturing expenses such as the cost for a company logo or gas used to deliver the product.

Answer 320

(C) (SSC SO Exam, 2006) Exp: Sunk cost are expenses occurred and these expenses cannot be recovered.

Answer 321

(B) (SSC MTS Exam, 2006) Exp: Selling cost is cost increased or foregone for promotion of sales of product. It is total cost of marketing advertising etc.

Answer 322

(B) (SSC MTS Exam, 2006) Exp: Marginal cost is the additional cost increased for one more unit of production. Marginal cost = Change in total cost Change in output

Answer 323

(A) (SSC SO Exam, 2005) Exp: Social cost is cost borne by the organisation but it is cost of society, like cost for building of airport. It includes private cost like cost of consultation and external cost like noise and air pollution cost, loss of landscape etc.

Answer 324

(D) (SSC SO Exam, 2003) Exp: Opporunity cost is cost a person could have received but sacrificed to take another course of action or alternative. It is sacrifice due to second best choice available who has selected another option. Hence transfer earning is also known as opportunity cost.

Answer 325

(D) (SSC CPO Exam 2003) Exp: Economic rent is revenue foregone or received for the use of land. It can be expressed with the payment made in Cash and reward in the form of cost occurred. Economic rent = Payment made

Answer 326

(B) (SSC MTS Exam, 2002) Exp: Total fixed curve is graphical representation of relation between total fixed cost and quantity produced. It is horizontal curve beacuse it remains fixed through out the production. Total fixed cost Total Fixed cost curve quantity produced y x

Answer 327

(C) (SSC MTS Exam, 2001) Exp: Fixed costs are cost or expenses done on the basic infrastructure. These costs tend to be same regardless to the level of production like building office, supplies etc.

Answer 328

(D) (SSC MTS Exam, 2000) Exp: Overhead costs are cost which remain same through all the level of production. In other words overhead costs are expenses other than variable cost i.e. cost increasing (decreasing) with increase (decrease) in production. These costs are similar to fixed cost, supplementary cost and indirect cost because these expenses are not depended on level of goods and services produced.

Answer 329

Ans: (D) Exp: Overhead costs are cost which remain same through all the level of production. In other words overhead costs are expenses other than variable cost i.e. cost increasing or decreasing with increase and decrease in production. These costs are similar to fixed cost, supplementary cost and direct cost because these expenses are not depended on level of goods and services produced.

Answer 330

Ans: (A) Exp: Average fixed cost is indicated by a rectangular hyperbola. Average fixed cost is total fixed cost divided by quantity of output produced.

Answer 331

(A) (SSC CGL 2017) Exp: Short run average cost curves are of 'U' shape. The average costs are high at low levels of output but as the level of output increases, the average costs fall more sharply and will continue to fall till they reach minimum point. After this minimum point, average costs starts rising as more quantities are produced beyond this level. AVC = Average variable cost

Answer 332

(A) (SSC CPO SI 2003) Exp: Average revenue is the revenue realised on per unit. In other words, total revenue realised divided by total units produced.

Answer 333

(D) (SSC Combined Matrix Level 2002) Exp: Gross Profit means profit realised on production. In Other words gross profit is total revenue realised by selling of products and then reducing total cost with deduction of total cost i.e. expenditure occured.

Answer 334

(C) (SSC CHSL 2010) Exp: Breakeven point is stage where total revenue recieved equals to total cost occured. It is no profit no loss point for firm.

Answer 335

(A) (SSC CHSL 2010,SSC MTS 2013) Exp: Innovation theory of profit was given by J.A. Schumpeter in 1934. Schumpter says that entrepreneur by his virtue of giving birth to value creating activities, expands the circular flow of income.

Answer 336

(A) (SSC (10+2) Level DEO & LDC 2011) Exp: Marshall was pioneer economist to analyize role of time in determination of price. Market period is very short period in which supply is assumed to be constant and price is determined by demand.

Answer 337

(A) (SSC MTS 2013) Exp: Dynamic theory of profit was given by J.B. Clark. According to J.B. Clark, in this world profit arises in dynamic economy.

Answer 338

(C) (SSC CGL Tier-I 2014) Exp: Average revenue can be considered as price for the commodity. Average revenue is identical to marginal revenue, when both the average revenue and marginal revenue are constant. Hence curve for the average revenue and marginal revenue is identical i.e. horizontal curve.

Answer 339

(A) (SSC CGL Tier-I 2015) Exp: Economic profit or normal profit is minimum amount of profit that the firm is realising so that firm can remain competitive in market.

Answer 340

(B) [SSC CHSL 2017] Exp: Marginal revenue product = Marginal product of labour × price of article or output added by employing one more employee in terms of revenve. So answer will be Rs.5000. 1

Answer 341

(C)Exp: Monopolist Marginal revenue :- Marginal revenue is amount the firm receives for each additional unit of output. Monopolist's Marginal revenue is always less than price of good.

Answer 342

(B) (SSC CGL 2017) Exp. Price taking firms means those firms which consider the price of the product as decided by demand & supply of the product. These firms exist in perfect competition market.

Answer 343

(A) (SSC CGL 1999) Exp: The most close approximate definition of oligopoly is cigaratte industry. Oligopoly market is market where there are very less number of sellers selling homogeneous product but with little differentiation to have edge on competitor. Competition filter down to advertisement and marketing because product are so much related.

Answer 344

(D) (SSC CGL 1999) Exp: Perfect competition is market structure that have many sellers and buyer with a homogeneous product. In this structure product is identical and prices are decided by demand and supply so buyers are price fixer not sellers

Answer 345

(D) (SSC CPO SI 2003) Exp: Under perfect competition there are large number of sellers with homogeneous product so price is fixed by buyer and profits are minimum per unit. Here marginal cost i.e. additional cost for producing one more unit will be equal to marginal revenue i.e. additional revenue by selling one additional unit.

Answer 346

(B) (SSC Statistical Investigator 2005) Exp: Seller's market is maket where buyers are more. So demand is more for the product so supply is less than demand. Here price will be high due to excess demand over supply.

Answer 347

(C) (SSC Tax Assistant 2005) Exp: Monopolistic competition is also Known as imperfect competition. It is market structure where there are multiple seller having product which are homogeneous but not close substitute. Here competition is at the level of brand awareness, marketing and at advertisement.

Answer 348

(D) (SSC Sec. officer 2006) Exp: Perfect competition is market structure that have many sellers and buyer with a homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers. So consumer decides what to produce and in what quantity. It is known as consumer's sovereignty.

Answer 349

(B) (SSC CGL 2010) Exp: The excess capacity condition do occur in monopolistic competition. Concept explained by many economist like J. Robinson, Chamberliln. It is condition of producers or firm working with normal profits and producing that much only that is needed to match equilibirum level resulting under utilization of resource. So monopolistic competition firms have excess capacity.

Answer 350

(D)Exp: Market for product refers to number of buyers and sellers in market.

Answer 351

(B) (SSC Combined Matric Level 2002) Exp: Tooth paste is product under monopolistic market because presence of differentiated products, with differentiation on the basis of color, taste, packing etc. In this market sellers are not price maker but have market to influence price due to product differentiation.

Answer 352

(D) (SSC Combined Matric Level 2002) Exp: Perfect competition is market structure that have many sellers and buyers with a homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers.

Answer 353

(A) (SSC Combined Matric Level 2002) Exp: Perfect competition is market structure that have many sellers and buyer with a homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers.

Answer 354

(A) (SSC Combined Matric Level 2002) Exp: Perfect competition is market structure that have many sellers and buyers with a homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers.

Answer 355

(C) (SSC Combined Matric Level 2002) Exp: Under perfect competition there are large number of sellers with homogeneous product so price is fixed by buyer and profits are minimum per unit. Here marginal cost i.e. addition cost for producing one more unit will be equal to Marginal revenve i.e. additional revenve by selling one additional unit.

Answer 356

(B) (SSC Combined Matric Level 2006) Exp: Perfect competition is market structure that have many sellers and buyers with a homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers.

Answer 357

(C) (SSC Combined Matric Level 2006) Exp: Monopoly is market where the product is available with single seller. Thus he is pricemaker and the chances of making profits are maximum.

Answer 358

(A) (SSC Steno. 2010) Exp: Perfect competition is market structure that have many sellers and buyers with homogeneous product. In this structure, product is identical and prices are decided by demand and supply. So buyers are price fixer not sellers. Here consumer decides what to produce and in what quantity. It is known as consumer sovereignty.

Answer 359

(A) (SSC CHSL Data Entry operator 2010) Exp: Under perfect competition because there are large number of buyers demanding homogoeneous product. Sellers can sell any numbers of quantity on market price. So demand curve will be horizontal. demand quantity Price O

Answer 360

(B)Exp: Theory of monopolistic competition formulated in United States under Edward Chamberlin. Edward Chambertin published his book ''The theory of monopolistic competion in 1933.'

Answer 361

(B) (SSC CHSL 2010) Exp: Under perfect competition, the firm produces at the minimum point of long run average cost curve.

Answer 362

(A) (SSC FCI Assistant Grade-III 2012) Exp: Under perfect competition there are large number of sellers with homogeneous product. Price is fixed by buyer and profits are minimum per unit. Here marginal cost i.e. additional cost for producing one more unit will be equal to marginal revenue i.e. additional revenue by selling one additional unit

Answer 363

(C) (SSC MTS 2013) Exp: Oligopoly is market where there are few sellers having large majority of share. It lies between pure monopoly and monopolistic market.

Answer 364

(A) (SSC MTS 2013) Exp: Monopoly is market where the product is available with single seller. Thus there is single seller so he is pricemarker and the chances of making profits are maximum.

Answer 365

(B) (SSC CGL 2013) Exp: The water diamond puzzle is related with Adam smith. Diamond have greater marginal utility to consumer than water so diamonds prices are higher.

Answer 366

(B) (SSC CAPFs SI, CISF ASI & Delhi 2014) Exp: Under perfect competition because there are large number of buyers demanding homogoeneous product. Sellers can sell any numbers of quantity on market price. So demand curve will be horizontal.

Answer 367

(A) (SSC CGL Tier-I 2013) Exp: In a free market economy resources allocation is done by market i.e. demand and supply of product. Here what to produce and how much to produce is decided by consumer and that depends on consumers capacity to spend.

Answer 368

(B) (SSC CGL Tier-I 2013) Exp: Complete market information is one of the main features of perfect competition.

Answer 369

(D) (SSC CGL Tier-I 2015) Exp: Perfect competition is market structure that have many sellers and buyers with homogeneous product. In this structure product is identical and prices are decided by demand and supply. So buyers are price fixer not the sellers. Here consumer decides what to produce and in what quantily and it is known as consumer's sovereignty.

Answer 370

(A) Exp: Money market is a market for the financial instrument which have very less maturity and generally with very high liquidity and maturity of less than one years.

Answer 371

(B)Exp: Under perfect competition there is buying and selling of homogeneous product at single price decided by market. Here producers are not price maker because price is decided by demand and supply in market.

Answer 372

(C) Exp: Bilateral monopoly situation is that condition in which a specific product is demanded by single seller and supplied by single seller. So single buyer, single seller.

Answer 373

(A) [SSC CHSL 2017] Exp: Laissez fair is a French term that literally means leave alone In economy it is referred in the situation where there is no interference from the government in deciding market factors.

Answer 374

(A) Exp: Assumptions for perfect competititon Profit is main objective Large number of buyers and sellers Homogeneous product Free entry and exit Full mobility Perfect knowledge

Answer 375

(C) [SSC CHSL 2017] Exp: In perfect competition situation the firms maximize profit by making that much output so that price of product can cover marginal cost.

Answer 376

(A) [SSC CHSL 2017] Exp: Monopolistic competition is market situation where sellers are many and competitor to each other offering differentiated products but with close substitute. Pure competition is market where large number of sellers as well as buyers exists, price here will be decided by market demand & supply.

Answer 377

(C) [SSC CHSL 2017] Exp: Oligopoly market are those markets where there are few sellers having differentiated product. So new firm entry will be difficult. Pure competition is market where there are large number of buyers with large number of sellers having identical goods. So at the market price, seller can sell as much as it can.

Answer 378

(A) [SSC CHSL 2017] Exp: Pure competition is that situation of market where price of the product is decided by market itself. Pure Monopoly: Situation of market where seller is single so here price determination will be according to seller.

Answer 379

(C) [SSC CHSL 2017] Exp: Perfect competition is situation in market where there are large numbers of buyers as well sellers having identical goods & services.

Answer 380

(A) [SSC CHSL 2017] Exp: Pure monopoly is a market where there is only one seller so it resulting the demand of the product as inelastic. Oligopoly market is the market with few sellers having their product differentiated so to keep product differentiated seller will have to be aware of their competitors.

Answer 381

(B) [SSC CHSL 2017] Exp: Pure competition market is where a large number of buyers as well sellers exists Price here will be decided by market demand & supply. Oligopoly market is where there are few sellers with product differentiation. So awareness of competition will exist.

Answer 382

(A) [SSC CHSL 2017] Exp: Monopolistic market is a market where sellers are many but competitor to each other offering differentiated product but close substitute. Pure competition is situation is market where there are large number of buyers as well as sellers having identical goods & services

Answer 383

(D) [SSC CHSL 2017] Exp: Pure monopoly is the market where there is only one seller so it will result the demand of the product as inelastic. Oligopoly market is the market with few sellers having their product differentiated. So to keep product differentiated, seller will have to be aware of the competitor.

Answer 384

(D) (SSC CHSL 2017) Exp: Pure monopoly is the market where there is only one seller so it will result the demand of the product inelastic. Oligopoly market is the market with few sellers having their product differentiated. So to keep product differentiated, seller will have to be aware of the competitor.

Answer 385

(D) [SSC CHSL 2017] Exp: Monopolistic competition is market situation where sellers are many and competitor to each other offering differentiated products but close substitute Oligopoly market is where three there are few sellers with product differentiations with awareness with competitor exist.

Answer 386

(A) [SSC CHSL 2017] Exp: Firm operates usually with the objective of profit, and increase in profit is best for any firm. Decrease in selling and decrease in production will lead to decrease in profit.

Answer 387

(D) (S.S.C (CGL) 2013) Exp: Bilateral Monopoly is a situation in which both 'monopoly' and 'monopsony' i.e. single buyer is found.

Answer 388

(D) (S.S.C (10+2) 2013) Exp: Extreme forms of market are Perfect competition: Large number of buyers and large number of sellers, price decided by market itself. Monopoly: Single seller. Seller himself decides prices. Monopoly is market where only one seller exists. Here new firms are not allowed to enter in market.

Answer 389

(D) (S.S.C (CGL) 2006) Exp: Extreme forms of market are Perfect competition: Large number of buyers and large number of sellers, price decided by market itself. Monopoly: Single seller. Seller himself decides prices.

Answer 390

(B) (SSC Steno 2014) Exp: Perfect market situation is when there are large number of seller as well as buyers exist here true market mechanism work because prices are decided by demand and supply. This situation exist in perfect competition market.

Answer 391

(D) (SSC CPO 2008) Exp: Under perfect competition, the price is decided by demand and supply of the product. So buyers are price decider. Here seller have to accept the fixed price because there are large number of sellers available to sell that product at normal level.

Answer 392

(B) (SSC 10+2 2010) Exp: Theory of monopolistic competition was given by Edward Chamberlin an American in 1933. Theory state that in perfect competition too there are certain seller behaving as monopoly, by having some product differentiation

Answer 393

(B) (SSC Steno. Sep. 2014) Exp: Free entry and exit of firms means no prohibition on entry of a firm i.e. any firm choose to sell product can enter market and no prohibition on exit of firm i.e. a firm when feel want to leave market can leave market. Oligopoly (few sellers with differentiated products) and perfect competitive market (large number of sellers with homogeneous product) have free entry and exit.

Answer 394

(B) (SSC (10+2) 2012) Exp: Kinked demand curve shows dual demand curve for product based on likely reaction of other firms. It is an exculsive firm having close substitute product feature of oligopoly market where if a firm changes price of its product then it may also have to reduce the price. Price d k Quantity

Answer 395

(A) (SSC (10+2) 2011) Exp: Under monopoly market there is only single seller hence the firm represents whole industry.

Answer 396

(B) (SSC Investigator Exam, 2010) Exp: The most distinguishing feature of oilgopoly is interdependence of firms because of having few firms with differentiated product. Firms are competitor to each other.

Answer 397

(D) (SSC (10+2) Exam, 2010) Exp: Degree of monopoly is decided by the decision of fixing selling price by firm.

Answer 398

(B) (SSC CGL Exam, 2010) Exp: Under monopolistic competition firm produces in excess capacity due to differentiated feature of product

Answer 399

(C) (SSC (10+2) Exam, 2010) Exp: Break even point is a point at which cost equal to revenue earned by firm. Here profit of firm is equal to zero.

Answer 400

(C) (SSC CGL 2017) Exp: Forms of Market Number of buyers and sellers Pure Competition Many sellers, Many buyers Pure Monoploy Single seller, Many buyers Oligopoly More than one but few sellers, Many buyers Monopolistic competition Large number of firms, free entry and exit of firms but goods are not homogenous

Answer 401

(A) (SSC CGL 2017) Exp: Monopoly is the market where there is only one seller. For monopoly firm, price depends on the quantity sold. Thus monopoly firm is a price-maker.

Answer 402

(B) (SSC CGL 2017) Exp: Monopoly form of market is where is there is only one seller of product.

Answer 403

(B) (SSC CGL 2017) Exp: Bilateral Monopoly: One seller and one buyer

Answer 404

(C) (SSC CGL 2017) Exp: Oligopoly market is the market with few sellers selling product with the product differentiation. Like tooth paste etc.

Answer 405

(D) (SSC CGL 2017) Exp: Perfect competition occurs when large number of sellers as well as buyers exist in the market. Here true market mechanism works because prices are decided by demand and supply of the product in market.

Answer 406

(A) (SSC CGL 2017) Exp: Current Account Deficit:- It is a measurement of country's trade where the value of goods and services it imports exceed the value of goods and services it exports i.e., more imports and less export. Capital Account Surplus:- A surplus in the capital account means more money is flowing into the country than flowing out. This surplus money is used for financing current Account Deficit.

Answer 407

(B) (SSC CGL 2017) Exp: A Monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. Thus it is characterised by a lack of economic competition to produce the good or service.

Answer 408

(D) (SSC CGL 2017) Exp: Monoposlistic competition is situation where these are multiple seller selling homogenous product but with differentiation. In monopolistic competition, the short sun equilibrium result in quantity produced being higher compared to perfect competition.

Answer 409

(C) (SSC CPO 2017) Exp: Oligopoly market is a market where there are few sellers having differentiated product so new firm entry will be difficult.

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