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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 6201. |
Budget line shows: |
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Answer» Possible COMBINATION of two GOODS that a consumer can buy by spending his entire income at the given prices |
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| 6202. |
Which one of the following is also known asfixed cost ? |
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Answer» SUPPLEMENTARY Cost |
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| 6203. |
Which of these is not a market structure is Econimics? |
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Answer» PERFECT COMPETITION |
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| 6204. |
Priceelasticityof supplyis equalto one onlywhenthe supplycurveformsan angleof 45^(@)at theorigine. |
| Answer» Solution :False :Priceelasticityofsupplyis equalto ONEALL thecaseswhensupplycurve passesthrough the origin, irrespectiveof THEANGLE it MAKES WITHTHE origin. | |
| 6205. |
The factor causing extension in supply of a good is |
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Answer» INCREASE in NUMBER of firms |
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| 6206. |
Govt. of the country imposes tax on petrol usage by the people, what impact will this have on budget line of a consumer showing consumption of two commodities petrol and food items on it? What is policy implication behind tax imposition ? |
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Answer» When budget line rotates leftwards, it implies fall in quantity demanded of petrol by the consumers due to increase INITS price. The POLICY implication behind tax on petrol is indirect restriction on usage of petrol and ENSURES judicious use of scare resource 
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| 6207. |
If theaverage salary of a firm is Rs. 400 and the number of workers is 60, find the total salary bill of the firm. |
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Answer» SOLUTION :Given:`barX=400,N= 60` `barX=(SUMX)/N` `rArr""sumX= N xx barX` `""=60xx400 = 24,000` Total Salary BILL = RS. 24,000. |
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| 6208. |
Mention the various cases in which equilibrium price remains same. |
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Answer» Solution :The EQUILIBRIUM price remains same when: (i) Increase in demand = Increase in SUPPLY. (ii) Decrease in demand= Decrease in supply. (iii) Demand INCREASES and supply is perfectly elastic. (IV) Demand decreases and supply is perfectly elastic. (v) Supply increases and demand is perfectly elastic. (vi) Supply decreases and demand is perfectly elastic. |
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| 6209. |
Indicate the most appropriate alternative from the multiple choices provided against each question. The algebraic sum of deviation of a set of n values from A.M. is |
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Answer» n |
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| 6210. |
Define perfect competition. Explain the various features of perfect competition. |
| Answer» Solution :Perfect competition refers to a market situation where there are very large no. of buyers and sellers dealing in a homogeneous product at a price fixed by the market.The features of Perfect competition are:1) Very large no. of buyers and sellers: The no. of sellers is so large that the share of each seller is insignificant in the TOTAL supply. Hence, an individual seller cannot influence the market price. Similarly, a single buyer's share in total purchase is so insignificant because of their large no. that an individual buyer cannot influence the market price. Under such conditions, price of a commodity is determined by the market forces of demand and supply and each buyer and seller has to accept the same price. As a result, uniform price prevails in the market.2) Homogeneous product: The products offered for sale in the market are homogeneous, i.e., the product sold is identical in all respects like size, shape, QUALITY,etc. Since each firm produces 100% identical products, their products can be readily substituted for each other. So, the buyer has no specific preference to buy from a particular seller only.3) Freedom of entry and exit: 'Freedom of entry' signifies that there are no barriers to the entry of new firms into industry. When the existing firms are earning abnormal profits, the new firms, attracted by the prospects of profit, enter the industry. This raises market supply, which in turn, leads to fall in market price and consequently profits. Te entry continues till each firm is earning just the normal profits. 'Freedom to exit' signifies that there are no barriers which restrict the existing firms from leaving the industry. The firms try to LEAVE when they are facing losses. As the firms start leaving, market supply falls, leading to rise in market price and consequently reduction in losses. The firms continue to leave till the losses are wiped out and each existing firm is earning just the normal profits.4) Perfect KNOWLEDGE among buyers and sellers: Perfect knowledge means that both buyers and sellers are fully informed about the market price. Its implication is that no firm is in a position to charge a different price and no buyer will pay a higher price. As a result a uniform price prevails in the market.5) Perfect Mobility of factors of production: The factors of production ( land, labor, capital and entrepreneurship) are perfectly mobile. There is no geographical or occupational restriction on their movement. The factors are free to move to the industry in which they get the best price.6) Absence of Transportation Costs: In order to ensure uniform price in the market, it is assumed that transportation costs are zero. A producer can sell his product at any PLACE and a buyer can buy it from the place he likes.7) Absence of selling costs: Selling cost refers to cost of advertisement of the product. In perfect competition, there are no selling costs because of perfect knowledge amongst the buyers and sellers. | |
| 6211. |
Indicate the most appropriate alternative from the multiple choices provided against each question. The most suitable average for qualitative measurement is: |
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Answer» ARITHMETIC mean |
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| 6212. |
"Changes in quantity supplied" of a good is caused by : |
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Answer» CHANGE in 'own PRICE ' of the good |
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| 6213. |
In general, most of the production functions measures : |
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Answer» PRODUCTIVITY of FACTORS of production |
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| 6214. |
The consumer is in equilibrium when Marginal Utility from a Commodity equals: |
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Answer» DEMAND of the Commodity |
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| 6215. |
Find the coefficient of correlation from the following data: |
Answer» Solution : `bar(X)=(SUMX)/(N)=(125)/(8)=15.625,` `bar(Y)=(sumY)/(N)=(337)/(8)=42.125` Since the actual means are not whole number , we TAKE 16 as assumed mean for X and 42 as assumed mean for Y. Applying the formula, `r=(sumdxdy-((sumdx) xx(sumdy))/(N))/(SQRT(sumdx^(2)=((sumdx)^(2))/(N))xx sqrt(sumdy^(2)-((sumdy)^(2))/(N)))` `=(138-((-3)xx(1))/(8))/(sqrt(71-((-3)^(2))/(8))xxsqrt(283-((1)^(2))/(8)))` `=(138-(-0.375))/(sqrt(71-1.125)xx sqrt(283-0.125))` `=(138+0.375)/(8.36xx16.82)` `=(138.375)/(140.6152)` `+0.98` Coefficient of Correlation (r)=+0.98 |
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| 6216. |
Out of the three concepts of revenue, which one is also known as price ? |
| Answer» SOLUTION :AVERAGE REVENUE (AR). | |
| 6217. |
What is meant by 'increase' in supply? |
| Answer» Solution :INCREASE in supply REFERS to a rise in the supply of a commodity caused due to any factor other than the own price of the commodity. | |
| 6218. |
A strainghtlinesupply curvecurve cuts theY- axisinitsnegativerange. What istheelastictiy of supply ? |
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Answer» highly elastic |
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| 6219. |
The government has started pomoting roreign capital. What is its economic value in the context of production Possibilities Frontier? |
| Answer» Solution :It will increase INFLOW of FOREIGN capita. Its econimic value is the rise in PRODUCTION POTENTIAL due to increase in resources. | |
| 6220. |
A few big sellers' is a chararteristics of : |
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Answer» Perfect competition |
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| 6221. |
Define variable costs. |
| Answer» SOLUTION :Variable costs are costs that change as the quantity of the good or service that a BUSINESS produces changes. Variable costs are the sum of MARGINAL costs over all units produced. They can also be considered NORMAL costs. | |
| 6222. |
Marginalcost is not affected by total fixed cost. |
| Answer» Solution :TRUE. As total FIXED cost does NOTCHANGE with change in OUTPUT, marginal cost is independent of total fixed cost and is affected onlyby change intotalvariable cost. | |
| 6223. |
"Massive unemployment will shift the PPC to the left", defend or refute. |
| Answer» Solution :This STATEMENT is refuted. Massive unemployment is due to inefficient USE of RESOURCES which does not decrease the capacity of economy to produce. Therefore, there will be not shift of PPC. The economy will operate INSIDE the PPC due to underutilisation of resources. | |
| 6224. |
What is meant by standard deviation? What are its main merits or characteristics? |
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Answer» Solution :Standard DEVIATION is the SQUARE ROOT of the arithmetic MEAN of the SQUARES of all deviations. Devations being measured from the arithmetic mean of the items. Merits :- 1. Based on all values. 2. A certain measure. 3. Little effect of a change in sample. 4. Algebraic Treatment. |
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| 6225. |
Choose the correct option, when supply increases and demand is prefectly elastic: |
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Answer»
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| 6226. |
Rate of inflation is equal to: [A= Price index] |
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Answer» `(A_(1))/(A_(2)+A_(1))XX100` |
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| 6227. |
"An economy always produces on, but not inside a PPC", defend or refute. Or Does production take place only on the PPC ? |
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Answer» Solution :This statement is refuted. `**` When resources are fully and efficiency utilised, te economy will operate on PPC.Refer to POINT (V) in the figure. `**` If there is inefficient USE of resources, then the economy will operate INSIDE the PPC. Refer to point (G) in the figure. 
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| 6228. |
The impact of change in the price of a commodity with little weight in the index will be: (i) small(ii) large(iii) uncertain |
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Answer» |
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| 6229. |
When does the shift in supply curve occur? |
| Answer» Solution :It occurs, when quantity SUPPLIED changes DUE to change in other factors, at the same PRICE. | |
| 6230. |
What is a black market ? Why does it exist ? |
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Answer» |
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| 6231. |
AC, AVC and MC curves are 'U' shaped because of : |
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Answer» LAW ofDiminishing MARGINAL Utility |
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| 6232. |
Which of the following formulae is propounded by Fisher ? |
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Answer» <P>`P_(01)=(sump_(1)q_(1))/(sump_(0)q_(1))` |
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| 6233. |
In the following diagram of budget line, point ''D'' represents : |
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Answer» BUNDLE which COST equal to MONEY income of consumer |
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| 6234. |
Median of a series with variable 1,2,3,4,5,6is : |
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Answer» 3 |
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| 6235. |
Explain the behaviour of firm's supply in the context of time horizon. Or How does time period affect the elasticity of supply of a commodity? |
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Answer» Solution :Time PERIOD affects the price elasticity of SUPPLY. LONGER the time period, greater is the elasticity of supply , shorter the time period, lesser is the elasticity of supply. EFFECT of time period differs between 
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| 6236. |
Marginal revenue is always the price at which last unit of a commodity is sold. Comment. |
| Answer» Solution :The GIVEN statement is INCORRECT. It is possible only when price is constant at all levels of OUTPUT. If price FALLS with rise in output, then marginal revenue is less than the price (or average revenue). | |
| 6237. |
which of the following influence price elasticity of demand ? |
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Answer» NATURE of the COMMODITY |
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| 6238. |
A country produces two commodities: X and Y. Its production possibilities are shown in the following table: (a) Calculate marginal rate of transformation (MRT) (b) Construct a PPF with the help of the various possibilities, (c ) Comment on the shape of PPF along with its reason. |
Answer» Solution :(a)  (b) Figure 1.13  (c ) PPF is convex shaped DUE to decreasing MRT, i.e., LESS and less units of COMMODITY Y are sacrificed to gain an additional UNIT of commodity X. |
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| 6239. |
Economics arrive at conclusions : |
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Answer» By applying LOGIC |
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| 6240. |
State any one feature of monopolistic competition. |
| Answer» Solution :Freedom of ENTRY and exit: Under Monopolistic Competition, firms are free to ENTER into or exit from the industry at any time they wish. Free entry and exit of firms means that there are no barriers before the firm for entering into the industry and LEAVING the industry. New firms can enter when they find that the existing firms are earning abnormal profits. With their entry, output of the industry increases, which LEADS to fall in the price of the product. This continues till each firm is earning only normal profit. The existing firm leave when they FACE losses. As they leave, output of the industry goes down, raises the price of the product till the losses are wiped out. It ensures that there are neither abnormal profits nor any abnormal losses to a firm in the long run. | |
| 6241. |
How surplus created as a result of price floor imposed by government is utilised ? |
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Answer» |
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| 6242. |
When x falls, y also falls. There is perfect correlation between the two. The correlation coefficient between the two is |
| Answer» SOLUTION :C | |
| 6243. |
On consuming some units of a good,the utiility obtained is 10 utils. It is a example of : |
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Answer» Ordinal UTILITY |
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| 6244. |
What is meant by mid-values frequency series? |
| Answer» Solution :Mid-value FREQUENCY SERIES are those series in which we have only mid-values of the class INTERVALS and the CORRESPONDING FREQUENCIES. | |
| 6245. |
Marginal Revenue can never be negative. |
| Answer» SOLUTION :False : When a FIRM sell more only by LOWERING the price, it is possible that MARGINAL REVENUE becomes negative after a level of output. | |
| 6246. |
Indifference curves are convex to the origin because of: |
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Answer» INCREASING MRS |
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| 6247. |
If two supply curves intersect, which one has the higher price elasticity? |
| Answer» Solution :The flatter supply curve is more elastic at the POINT of intersection as COMPARED to the STEEPER curve because the flatter the supply curve, more the elasticity. | |
| 6248. |
What do you mean by fixed factors ? |
| Answer» SOLUTION :FIxed factors are the factors which do not VARY with the LEVEL of output in the SHORT run. | |
| 6249. |
State three causes each for a rightward shift and a leftward shift in the supply curve. |
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| 6250. |
In a perfectly competitive market, products of all the firms are homogeneous because : |
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Answer» All the FIRM USE the same tachnology |
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