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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.
| 4201. |
Gross domestic product |
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Answer» Gross Domestic Product refers to the total monetary value of total goods and services produced in an economy in one year. It is the sum of total values of all goods and services which produce in one or particular year. |
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| 4202. |
How to calculate Cumulative Sum in lorenz curve ? |
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| 4203. |
What is mean deviation ? |
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| 4204. |
What is meaning of statistics? |
| Answer» It is the form of | |
| 4205. |
Credit sale |
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| 4206. |
Central problems of an economy1)what to produce?2)how to produce?3)for whom to produce? |
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Answer» 1) What to produce - this problem involves selection of goods and services to be produce and the quantity to be produce of each selection commodity. Every economy has limited resources and it can not produce all the good.Example - production of more sugar is possible only by reducing the production of other good.so an economy has to decide which good should be produce and in what quantity 2) How to produce - this problem refers to technique to be used for production of good and services.Techniques are classified as-labour intensive techniques (LIT) and capital intensive techniques (CIT)3.For whom to be produce - this problem relates to the distribution of produced goods and services among the individuals within the economy that is selection of category of people who will ultimately consume the goods. Whether these distribution of good for more poor and less rich or more rich and less poor 1. What to produce?Ans. It refers to selection of goods and services and quantity to be produced of each selected commodity. |
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| 4207. |
Fisher's method of calculatingindex numbers is based on: |
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Answer» ARITHMETICMEAN |
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| 4208. |
Indentify the following as Microeconomic study and Marcoeconomic study, (i) Productio of a sugar mill, (ii) Inflation rate, (iii) Car industry, (iv) Supply of money,(v) Wage determination in a company, (vi) Allocation of resources, (vii) Househole expenditure, (viii) Aggragate demand, (ix) Foreign exchange rate, (x) Market demand for apples. |
| Answer» Solution :Microeconomic study: (i),(iii),(v),(vi),(vii),(x). Microecocomic study: (II),(iv),(VIII),(IX). | |
| 4209. |
No Scarcity' means no economic problem. |
| Answer» SOLUTION :If there is no scarcity, then there would be no ECONOMIC PROBLEM as scarcity is the BASIC REASON for economic problem. | |
| 4210. |
In Monopoly entry of a new firms |
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Answer» is RESTRICTED at all times |
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| 4211. |
Following are thewages of 19 workers: {:("Wages(Rs.)",10,20,30,40,50),("Number of Workers",4,5,3,2,5):} Calculate arithmetic mean, using Short-cut Method. |
Answer» Solution : `barX=A+(sumfd)/(sumf)=30+(-10)/(19) = 30 - 10/19` `=30-0.53 = 29.47` ARITHMETIC MEAN = RS. 29.47. |
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| 4212. |
Explain the central problem of 'how to produce' OR Explain in the central problem of the choice of products to be produced. |
| Answer» Solution :As there is the problem of choice, the economy has to decide which goods and services are to be produced. For EXAMPLE, which of the consumer goods such as wheat, rice, CLOTH are to be produced and which of the capital goods such as machines and tools are to be produced.When an economy has TAKEN a decision as to what goods or services to be produced, then it has to be about its QUANTITY. How much of consumer goods and capital goods are to be produced.For example, if an economy decides to produce rice and wheat within a given period with limited resources then it will have to use less of machineries. | |
| 4213. |
Define mode. |
| Answer» Solution :MODE is the VALUE which OCCURS most frequently in the SERIES , that is , modal value has the HIGHEST frequency in the series. | |
| 4214. |
Demand curve of perfectively competitive market form is a horizontal straight line parallel to X-axis. It happens because: |
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Answer» Selling COSTS are zero |
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| 4215. |
Distinguish between microeconomics and macroeconomics. Give an example of each. OR What will likely be the impact of large scale outflow of foregin capital of Production Possibilities curve of the economy and why ? |
Answer» Solution : OR LARGE scale OUTFLOW of foreign capital from the economy will reduce resources and thus production POTENTIAL of the country will fall. Fall in production potential in turn will shift the production possibilities CURVE DOWNWARDS. |
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| 4216. |
A entrepreneur is planning to set up a factory in an extremely backward region of India and is thinking about the technique of production to be used for production. Suggest which technique of production should be used for the social uplitment of the region, if there are large number of unemployed people. |
| Answer» SOLUTION :The entrepreneur should use labour intensive technique as it will REDUCE UNEMPLOYMENT to a large EXTENT and it will RAISE their standard of living. | |
| 4217. |
Explain the concept of Opportunity Cost with the help of an example |
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| 4218. |
The MC curve may be rising or failing just before itbecomes equal to AVC and ATCcurves. |
| Answer» SOLUTION :False. MC curve is always rising before it BECOMES EQUAL to AVC and ATC CURVES. | |
| 4219. |
Explain the kinds of advertisements. |
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Answer» Solution :Advertising can be of three kinds : InformativePersuasiveDefensive Informative advertising gives information about new products, PRICES, quality, location, supply ETC to create awareness. It is not a costly method e.g., yellow pages, newspapers and magzines. Persuasive advertising attempts to persuade consumers of distinctivencess of product. Defensive advertising is undertaken when rival firms spend on ADVERTISEMENT. It HIGHLY adds to total cost of all the firms. It sometimes causes wasteful expenditure. |
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| 4220. |
Discuss the main measures of dispersion. |
| Answer» SOLUTION :COMMON examples of measures of statistical dispersion are the variance, standard DEVIATION, and interquartile RANGE. | |
| 4221. |
A consumer spends his entire income on two goods: X and Y. Currently his marginal rate of substitution (MRS) of X and Y is more than the price ratio of two goods. Discuss the changes that will take place so that consumer is able to reach the equilibrium position. |
| Answer» Solution :Marginal rate of substitution (MRS) of X and Y is more than the price ratio of two GOODS, it MEANS that to obtain one more UNIT of X, the CONSUMER is willing to sacrifice more units of Y as compared to what is required in the market. It induces the consumer to buy more of X. As a result, MRS falls and continue to fall till it becomes EQUAL to the ratio of prices and the equilibrium is achieved. | |
| 4223. |
Prove that area under AR (and MR) curve is equal to total revenue is case of perfect competition. |
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Answer» Solution :In case of perfect competition AR is constant, therefore AR =MR. AR curve is horizontal straight line which represents the value of different LEVELS of output at uniform price. In the diagram, price (EQUAL to OP) is constant and given output is OQ. TR =P X Q =OP x OQ =AREA of OQEP 
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| 4224. |
Out of the following costs, which cost can never be zero : |
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Answer» AFC |
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| 4225. |
Identify positive or normative statements from the following : Economics is study of choice/alternatives |
| Answer» SOLUTION :POSITIVE STATEMENTS | |
| 4226. |
How will decrease in price of 'X' affect consumer equilibrium when the consumer consumes two goods X' and 'Y ? |
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Answer» SOLUTION :When the price of good X FALLS, then the consumer consumes more of good X and less of good Y. This is because, with given INCOME he can BUY more of good X. |
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| 4227. |
The following diagram represents the demand curve of: |
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Answer» PERFECT competition |
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| 4228. |
What is decrease in supply? |
| Answer» SOLUTION :If refers to a fall in the supply of a COMMODITY, DUE to unfavourable changes in other factors, at the same price, e.g., when price of inputs RISES. | |
| 4229. |
Briefly explain the concept of the cost function. |
| Answer» SOLUTION :The relation between cost and output is KNOWN as 'cost function'. Cost function refers to the FUNCTIONAL relationship between cost and output. It is EXPRESSED as :c=f (q)[where: C= cost of production; q= Quantity of output; f=Functional relationship | |
| 4230. |
Mr. Goyal has a budget of Rs.1,00,000 which he plans to spend on sweets and crackers on Diwali. He actually spent Rs.1,25,000 because of more expenditure on crackers. How will you show his planned expenditure and actual expenditure through budget line? Is this over expenditure justified ? |
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Answer» The budget line rotates RIGHTWARDS due to over expenditure on crackers which implies more quantity bought of crackers. Over expenditure is not justified as it is a wasteful expenditure. Also crackers CAUSE AIR pollution and noise pollution and harm the environment. 
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| 4231. |
The problem of 'What to produce' covers the issue relating to: |
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Answer» What gods are to be produce |
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| 4232. |
Can simple correlation cofficient measure any type of relationship ? |
| Answer» Solution :No. SIMPLE correlation MEASURES only LINEAR RELATIONSHIP between the variables. | |
| 4233. |
Interdependence Between Firms' is a feature of which type of market form: |
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Answer» Oligopoly |
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| 4234. |
What is meant by bar diagram ? |
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Answer» |
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| 4235. |
Any consumption beyond the point of Satiety leads to disutility |
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Answer» |
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| 4236. |
A typical indifference curve is downwards sloping convex curve because as we move downwards along the indifference curve, the slope of the curve |
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Answer» Decreases |
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| 4237. |
The following headline appeared in the Hindustan Times on 2 August 2014 : ''Crop damaged in Himachal sent tomato prices roaring in Delhi.'' Use a diagram and economic theory to analyse the statement. Or On 19 December 2013, the following news item was item was printed in the Economic Times : Households in Southern India prefer to eat oranges for breakfast as banana plantations in Kerala have been destroyed and price of apples and grapes have also risen. Use a diagram and economic theory to analyse the imapact of the rise in price of apples and grapes on the market or oranges, |
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Answer» Solution :As the toamto crop was damaged in Himachal, the production and supply of tomatoes would fall. As a result the supply curve would shilft to its left. In the adjoining figure, demand curve DD and supply curve SS equilibrium point is E equilibrium price is OP equilibrium QUANTITY is OM  Observations (i) Due to damge of tomato crop, supply of the commodity DECREASES and the supply curve shifts to left from SS to `S_(2)S_(2).` (ii) This causes excess demand TE. (iii) This causes competition among buyers which pushes the price upwards. (iv) Due to rise in price, the demand contracts from point E to point `E_(2)` and supply extends from point T to point `E_(2)`. (v) Market demand and market supply become equal again at point `E_(2)` which corresponds to a higher euilibrium price `OP_(2)` and lower equilibrium quantity `OM_(2)`. This explains how prices of tomatoes rose in Delhi due to damage of tomato crop in Himachal. Or Households in Southern India prefer to but oranges becuase there is shorage of bananas (as banana plantations in Kerala have been destroyed) and price of apples and GRAPES have also gone up. In the adjoining figure, demand curve DD and the supply curve SS of oranges intersect each other at point E.  Accordigly, equilibrium point is E equilibrium price is OP equilibrium quantity is OM, Observations (i) Due to increase in price of substitute fruits, there is increase in demand of oranges and demand curve shifts to RIGHT from DD to `D_(1)D_(1)`. (ii) This cuses excess demand EN. (iii) Due to increase in demand, there is competition among buyers, which pushes the price upwards. (iv) Due to increase in price, supply extends from point E to point `E_(1)` and demand contracts from point N to point `E_(1)`. (v) Market demand and market supply become equal again at point `E_(1)` which corresponds to a higher equilibrium price `OP_(1)` and higher equilibrium quantity `OM_(1)`. `OP_(1)` is higher than the old price of oranges. This explains the impact of rise in price of apples and grapes on market of oranges that there is increase in equilibrium price and equilibrium qt. of oranges. |
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| 4238. |
Use the data in following table that relate to monthly household expenditure (in Rs.) on food of 50 households, and (i) Obtain the range of monthly household expenditure on food. (ii) Divide the range into appropriate number of class intervals and obtain the frequency distribution of expenditure. (iii) Find the number of households whose monthly expenditure on food is (a) less than Rs. 2,000, (b) more than Rs. 3,000, (c) between Rs. 1,500 and Rs. 500. |
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Answer» = 5,090-1,007 =4,083 `(##TRJ_ECO_XI_C04_E01_076_A01##)` (iii)(a)Number of households whose monthly expenditure on food is less than Rs.2,000 =20+13=33. (B)Number of households whose monthly expenditure on food in more than Rs.3,000=2+1+2+1=6 (c )Number of households whose monthly expenditure on food is between Rs.1,500 and Rs.2500 =13+6=19. |
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| 4239. |
Calculate the coefficient of correlation between price of a good and its demand by direct method. |
Answer» Solution : `GAMMA=(NSigmaXY-(SigmaX)(SigmaY))/(sqrt(NSigmaX^(2)-(SigmaX)^(2))sqrt(NSigmaY^(2)-(SigmaY)^(2)))` `gamma=((7xx517)-(28xx177))/(sqrt((7xx140)-(28)^(2))sqrt((7xx5869)-(177)^(2)))` `gamma=(3619-4956)/(sqrt((980-784))sqrt(41083-31329))` `gamma=(-1337)/(sqrt(196)xxsqrt(9754))=(-1337)/(sqrt(196xx9754))` `=(-1337)/(sqrt(1911784))=(-1337)/(1382.67)=-0.97.` |
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| 4240. |
List two ways in which oligopoly firms may behave |
| Answer» SOLUTION :Oligopoly firms MAY, (i) COOPERATE with each other in determing price or OUTPUT or both, (ii) Compete with each other, i.e. non-coperate oligopoly firms. | |
| 4241. |
What do you mean by substitutes? Give examples of two goods which are substitutes of each other |
| Answer» Solution :SUBSTITUTES are the GOODS which can be used in PLACE of each other. For EXAMPLE, coffee and tea. | |
| 4242. |
What will you say about MPP of a factor when TPP is rising at diminishing rate? |
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Answer» |
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| 4243. |
Why is a firm under perfect competition and monopolistic competition. |
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| 4244. |
Which one of these is a determinant of individual demand ? |
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Answer» SIZE and COMPOSITION of population |
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| 4245. |
In case of cardinal utility approach, utility is measured in: |
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Answer» Rupees |
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| 4246. |
When we add up utility derived from consumption of all the units of the commodities, we get: |
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Answer» TOTAL Utility |
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| 4247. |
Calculate coefficient of correlation,between the age of husbands and wives. |
Answer» Solution : X=(X-BAR(X)),y=(Y-bar(Y)) `bar(X)=(sunX)/(N)=(174)/(6)=29,bar(Y)=(sumY)/(N)=(156)/(6)=26` `sumxy=191=sumx^(2)=208,sumy^(2)=178` `r=(sumxy)/(sqrt(sumx^(2)xxsumy^(2)))` `r=(191)/(sqrt(208xx178))` `=(191)/(sqrt(37,024))` `=(191)/(192.42)=0.993` Coefficient of Correlation (r)=0.993 Thus, there is a high degree of POSITIVE correlation between the age of husband and wife. |
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| 4248. |
Average cost falls only when marginal cost falls. |
| Answer» SOLUTION :FALSE. Average COST (AC) can ALSO falls when marginal cost (MC) rises, provided MC is LESS than AC. | |
| 4249. |
Market for a good is in equilibrium. There is simultaneous "Increase" both in demand and supply of the good. Explain its effect on market price. OR Suppose there is a sudden increase in birth rate. The increase in population has raised the demand for shirts. At the same time, due to fall in price of cotton, the supply of shirts have also increased. How will it affect the equilibrium price and equilibrium quantity of shirts? |
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Answer» SOLUTION :If the INCREASE in demand is EQUAL to increase in supply then the equilibrium price will not change. If the increase in demand is more than the increase in supply then the equilibrium price will rise. If the increase in demand is less than the increase in supply then the equilibrium price will FALL. |
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| 4250. |
PPC is concave when marginal opportunity cost |
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Answer» falls |
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