Explore topic-wise InterviewSolutions in .

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.

7101.

Identify the fixed factor in short run:

Answer»

labour
raw MATERIAL
land
none of these

Answer :C
Discussion
7102.

How are the equilibrium price and quantity affected when (a) both demand and supply curves shifts in the same direction? (b) demand and supply curves shifts in opposite directions?

Answer»

Solution :You need to DRAW various POSSIBILITIES in which the CURVES SHIFT.
Discussion
7103.

What is the general profit maximising condition of a producer from TR and TC curves ?

Answer»

SOLUTION :PRODUCER earn MAXIMUM profits when the difference between TR and TC is maximum.
Discussion
7104.

What will be the shape of MR curve when TR increases at constant rate ?

Answer»

Solution :MR curve will be HORIZONTAL STRAIGHT line PARALLEL to X-axis and will coincide with AR curve.
Discussion
7105.

By which formula is combined arithmetic mean estimated?

Answer»

`barX_(12)(X_(1)+X_(2)+...+X_(N))/(N_(1)+N_(2))`
`barX_(12)=(barX_(1)N_(1)+barX_(2)N_(2))/(N_(1)+N_(2))`
`barX_(12)=(barX_(1)+barX_(2))/(N_(1)+N_(2))`
NONE of these

Answer :B
Discussion
7106.

What causes a movement along the supply curve of a good?

Answer»

Solution : Change (INCREASE or decrease) in price CAUSES a movement ALONG the supply curve of a GOOD.
Discussion
7107.

When does 'decrease' in demand take place ?

Answer»

Solution :When there is DECREASE in demand due to a FACTOR other than own PRICE of the good or naming a factor like fall in price of SUBSTITUDE, etc.
Discussion
7108.

Average deviation can be calculated from

Answer»

MEAN
MEDIAN
Both mean and median
NEITHER mean nor median

SOLUTION :C
Discussion
7109.

A simultaneous "decrease" in both demand and supply ultimately results in :

Answer»

DECREASE in EQUILIBRIUM price
Increase in equilibrium price
Neither (a) nor (B)
Any of the above

Answer :D
Discussion
7110.

What will happen to MP, when TP increases at an increasing rate ?

Answer»

SOLUTION :MP FALLS, but REMAINS POSITIVE.
Discussion
7111.

A severe drought results in a drastic fall in the output of wheat. Analyse how it will affect the market price of wheat.

Answer»

Solution :Market PRICE of wheat will INCREASE (DUE to decrease in SUPPLY).
Discussion
7112.

Distinguish between perfect oligopoly and imperfect oligopoly. Also explain the "interdependence between the firms" feature of oligopoly.

Answer»
Discussion
7113.

Average cost can rise even when marginal cost is falling.

Answer»

SOLUTION :FALSE. Marginal COST pulls the average cost up or down. So when marginal cost FALLS, average cost ALSO falls.
Discussion
7114.

In tabulation, the table number should be followed by title

Answer»


SOLUTION :TRUE
Discussion
7115.

Which of the following is not a condition of the perfect market?

Answer»

HOMOGENOUS Product
Very LARGE number of sells
Perfectknowledge among buyers
Downward SLOPING DEMAND curve

Solution :N/a
Discussion
7116.

Which condition is incorrect :

Answer»

AC can RISE when MC is falling
AC can fallwhen MC is rising
AVC can FALL when MC is rising
AC can rise when MC is rising

Solution :N//A
Discussion
7117.

Explain the meaning of normal goods and inferior goods.

Answer»

SOLUTION :NORMAL goods are those goods WHOSE DEMAND INCREASES with an increase in income of the consumer and vice-versa whereas in case of inferior goods, their demand falls with an increase in income of the consumer and vice-versa.
Discussion
7118.

If the demand for a good is made by a rich consumer , its demand is generally.

Answer»

LESS ELASTIC
HIGHLY elastic
UNITARY elastic
PERFECTLY elastic

Solution :N/a
Discussion
7119.

A flatter demand curve is more elastic than a steeper demand curve at the point of intersection.

Answer»

SOLUTION :Flatter DMEAND curve is more ELASTIC because with the same CHANGE in price, change in demand in CASE of flatter curve is more than change in demand in case of steeper curve.
Discussion
7120.

What change will take place in marginal product, when total product increases at a diminishing rate ?

Answer»

SOLUTION :MP will be POSITIVE and DECREASING.
Discussion
7121.

Suppose prices of one of the two goods the consumer consumes falls and that of other rises, the consumer's utility level at equilibrium in the IC analysis.

Answer»

FALLS
Increases
Remain UNCHANGED
Uncertain

Answer :D
Discussion
7122.

Theprofit of a firm diminishes when "_________" exceeds "_________":

Answer»

MARGINAL REVENUE , Marginal COST
Marginal Cost, Marginal Revenue
Marginal Revenue , AVERAGE Cost
Average Revenue, Average Cost

Solution :N/a
Discussion
7123.

If a perfectly competitive firm double its output. Then it total revenue:

Answer»

Doubles
More than doubles
Less than doubles
Cannot be determined

Solution :N/a
Discussion
7124.

Define average revenue (AR)

Answer»

Solution :AR REFERS to the revenue PER UNIT of commodity SOLD.
SYMBOLICALLY : `AR=(TR)/("No. of units sold")`
Discussion
7125.

Following is the weekly wage earnings of 19 workers: {:("Wages(Rs.)",10,20,30,40,50),("Number of Workers",4,5,3,2,5):} Calculate arithmetic mean using Direst Method,

Answer»

Solution :
`BARX=(sumfX)/(sumf)=(560)/19=29.47`
MEAN WAGE EARNINGS of 19 workers = Rs. 29.47.
Discussion
7126.

Define normative economics with a suitable example.

Answer»

SOLUTION :Economics as a 'normative SCIENCE' DEALS with situations of value judgement or condition of 'what ought to be'. Example: India should create more employment OPPORTUNITIES.
Discussion
7127.

Calculate the mean marks from thefollowing data: {:("Marks",20-25,25-30,30-35,35-40,40-45,45-50,50-55),("No. of Students"," "10," "12," "8," "20," "11," "4," "5):}

Answer»

SOLUTION :
`BARX = A+(sumfd)/(sumf)`
`=37.5 + (-140)/70`
`= 37.5 - 2 = 35.5`
Mean MARKS = 35.5.
Discussion
7128.

Explain the concept of 'buffer stock' as a tool of price floor OR Market for a product is in equilibrium. Supply of the product 'decreases'. Explain the chain of effect of this change till the market again reaches equilibrium. Use diagram.

Answer»

Solution :Buffer stock is an important tool in the hands of govemment to ensure PRICE floor. If in case, the market price is lower than what the govemment feels should be given to the farmers/producers, it would purchase that commodity at higher price from the farmer/producers so as to maintain stock of the commodity with itself, to be released in case of shortage of the commodity in future.
OR
When the supply decreases, demand remaining unchanged, the supply curve shifts to the left from SS to `S_(1)S_(1)`.
`**` When supply decreases to `S_(1)S_(1)`, it creates an excess demand at the old equilibrium price of OP.
`**` This LEADS to competition among buyers, which raises the price.
`**` Increase in price leads to RISE in supply and fall in demand.
`**` These changes continue TILL the new equilibrium is established at point `E_(1)`.
`**` Equilibrium price rises from `OP " to " OP_(1)` and equilibrium quantity falls from `OQ " to " OQ_(1)`
Discussion
7129.

How does change in price of complementary good affect the demand of the given good ? Explain with the help of an example

Answer»

Solution :Complementary GOODS are those goods which are used TOGETHER to satisfy a particular want. Price of ONE complementary good has a negative relationship with demand of another complementary good, hence an increase in price of one complementary good leads to fall in demand of another complementary good. For example, if price of petrol INCREASES, the demand of cars will fall.
Discussion
7130.

Which of the following is a type of mathematical average?

Answer»

Median
Partition value
Mode
None of these

Answer :D
Discussion
7131.

What are the main demerits of standard deviation?

Answer»

SOLUTION :1. Difficult to calculate.
2. IMPORTANCE to extreme VALUES.
Discussion
7132.

Monopolistic competitive firm is a price taker.

Answer»

Solution :MONOPOLISTIC competitive firm is not a price taker as it can INFLUENCE the price by creatinga differentiated image of its PRODUCT through heavy selling costs
Discussion
7133.

A consumer consumes only two goods X and Y and prices of Goods X and Y are Rs 4 and Rs 2 respectively. What will be the MRS_(XY) when consumer is in equilibrium ?

Answer»

SOLUTION :When the consumer is in equilibrium, `MRS_(XY) = P_(X)//P_(y)`
substituting `P_(x) = 4 " and " P_(y) = 2, MRS_(xy) = 4//2 = 2`
Discussion
7134.

Under which market form, firm is a price maker

Answer»

SOLUTION :MONOPOLY
Discussion
7135.

An indifference curve always:

Answer»

SLOPE downwards from left to right.
Slopes upwards from left to right
Is PARALLEL to the Y-axis
Is parallel to the X-axis.

Answer :A
Discussion
7136.

Economy can never operate outside the production poddibility frontier with the givben resources and technology.

Answer»

SOLUTION :as all POINTS outside PRODUCTION POSSIBILITY FRONTIER are unattainable.
Discussion
7137.

What is supply function?

Answer»

Solution :It refers to FUNCTIONAL RELATIONSHIP between supply and FACTORS affecting the supply of a COMMODITY.
Discussion
7138.

A firm is able to sell quantity of a good only by lowering the price. The firm's marginal revenue, as he goes on selling would be :

Answer»

GREATER than AVERAGE revenue
less than average revenue
Equal to average revenue
Zero

Answer :B
Discussion
7139.

What does a production possibility curve show? When will it shift to the right?

Answer»

Solution :A production possibility curve measures the maximum output of two goods using a fixed amount of input. Each point on the curve shows how much of each good will be produced when resources shift from making more of one good and less of the other. The curve measures the trade-off between PRODUCING one good versus another.PPC shifts to the right when there is an improvement in technology. When technological PROGRESS takes PLACE, it is possible to produce more of two goods with a GIVEN amount resources. It implies increase in PRODUCTIVE capacity which means that the economy can produce more of both goods.
Discussion
7140.

Why is Average Revenue always equal to price ?

Answer»

<P>

Solution :`TR=PXXQ,AR=(TR)/(Q)ANDAR=(PxxQ)/(Q)=P`
Discussion
7141.

What are the main merits of Lorenz curve?

Answer»
Discussion
7142.

The following supply curvesshits from SS to S_(1)S_(1) due to:

Answer»

Decrease in Taxes
Upgradation oftechology
Fall in theprice of inputs
All of THEABOVE

Solution :all of the above SITUATION LEADS to increase in supply and hence a RIGHTWARD shift in supply curve.
Discussion
7143.

Giving reason identify which of the following are the subject matter of miroeconomics or of macroeconomics.(i) National income (ii) Supply by an industry (iii) Governrnent budget (iv) Supply by a firm

Answer»

SOLUTION :National income- macroeconomics because it is concerned with BEHAVIOUR of economy as a whole.supply by an industry-microeconomics BEACUSE it is concerned with study of individuals and business DECISION.government budget-macroeconomics because it is concerned with behaviour of economy as a whole.supply by a firm-microeconomics beacuse it is concerned with study of individuals and business decision.
Discussion
7144.

What will be the impact of the following changes on the demand curve of : (i) Cars when there is an increase in price of petrol (ii) Desktop Computers with increase in price of Laptops (iii) Bread with increase in its price (iv) Trousers due to change in preference in favour of Jeans (v) Bajra for a poor person when income of such person rises (vi) Coffee when price of tea falls (vii) Petrol if its price is expected to rise in near further.

Answer»

Solution :(i) Demand curve of CARS will shift towards left with increase in price of petrol (complementary good) as it will become relatively COSTLY to use both the goods (CAR and Petrol) together
(ii) Demand curve of Destop Computers will shift towards right with increase in price of Laptops (substitude good) as it will become relatively cheaper to use desktop computers instead of laptops.
(iii) There will be no change in demand curve of Bread. There will be only an upward movement along the same demand curve
(iv) Demand curve of Trousers will shift towards left as preference in favour of jeans will decrease the demand for trousers (assuming trousers and jeans are substitues).
(v) Demand curve of Bajra for a poor person will shift towards left as with increase in income, poor person will shift from bajra to other superior substitutes (like wheat or rice)
(VI) Demand curve of COFFEE will shift towards left with fall in price in tea (substitude good) as it become relatively costly to use coffee instead of tea.
(vii) Demand curve of Petrol will shift towards right as expectation of price rise in future will increase the demand of petrol in the present period.
Discussion
7145.

The central problems of “what, how and for whom” are:

Answer»

(a) lnterdependent
(b) Independent
(c) All problems MAY not be PRESENT at one TIME
(d) May vary from COUNTRY to country

Answer :A
Discussion
7146.

Dissoveriers, innovationandtechnologicaldevelopmentwillleadto fall in supplyof the givencommodity.

Answer»

Solution :NO, Discoveries, innovations and technological developmentwill lead to THECHANGE INDEMAND and wil not lead to any CHANGE in SUPPLY of a given COMMODITY.
Discussion
7147.

What is production function ?

Answer»


Answer :PRODUCTION FUNCTION is the TECHNOLOGICAL relationship which tells how much maximum output can be PRODUCED from various combinations of INPUTS.
Discussion
7148.

Define opportunity cost.

Answer»

SOLUTION :The value of NEXT best ALTERNATIVE FOREGONE
Discussion
7149.

What is consumer's equilibrium ?

Answer»

Solution :The state of balance achieved by an end user of PRODUCTS that refers to the amount of GOODS and SERVICES they can purchase given their present level of income and the current level of prices. Consumer EQUILIBRIUM allows a consumer to obtain the most satisfaction POSSIBLE from their income.
Discussion
7150.

State law of diminishing marginal utility.

Answer»


Solution :LAW of diminishing marginal utility STATES that as we consume more and more units of a COMMODITY the utility DERIVED from each successive unit goes on decreasing.
Discussion