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Eco MCQ 1 - Multiple Choice Questions (MCQ) for

Economics 1 BALLB/BBALLB
Economics I (Guru Gobind Singh Indraprastha University)

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MCQ: ECONOMICS I (UNIT I)

BALLB III SEMESTER

1. Oikonomikos refers to:

a) Resource management
b) Home management
c) Production management
d) Wealth management

2. Whose definition of economics is relevant in terms of globalization and

sustainable development:
a) Adam Smith
b) Lionel Robbins
c) Prof. A C Dhas
d) Alfred Marshall

3. In Adam Smith’s definition of economics, wealth refers to

a) Material goods
b) Services
c) Both a & b
d) Neither a nor b

4. In economics, human wants are considered to be:

a) Limited
b) Unlimited
c) Diverse
d) Scarce

5. Productive power of division of labour has been acknowledged by:

a) Adam Smith
b) L Robbins
c) P Samuelson
d) A Marshall

6. Robbins definition of economics laid stress on

a) Material welfare
b) Growth of resources
c) choice under scarcity
d) sustainable growth

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7. Conducting a study on Tata Motors to test the notion that producers produce for
profit motive, is part of
e) Inductive Methodology
f) Deductive Methodology
g) Both a) and b)
h) None of the above

8. Economics is considered to be a social science because its study includes:

e) Environment
f) Women issues
g) Human behaviour
h) None of the above

9. Economics is a science because:

e) It is systematic study of the knowledge
f) It establishes cause and effect relationship between variables
g) Both a & b
h) Neither a nor b

10. 100 youth in a city are unemployed. Therefore all youth in the same city are
unemployed. Is this
a) inductive reasoning
b) deductive reasoning
c) both a and b
d) none of the above

11. If price of a commodity rises, its supply also rises. Price of cold-drinks increase.
Therefore their supply will also increase. Is this
a) inductive reasoning
b) deductive reasoning
c) both a and b
d) none of the above

12. Household owns which factors of production from the following:

i) Land and labour
j) Capital and entrepreneur
k) Both a) and b)
l) None of the above

13. Market economy is based on:

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a) Self consumption
b) Barter exchange
c) Price mechanism
d) None of the above

14. Future value can be calculated using the following formula:

a) FVn = PV(1 - i)n
b) FVn = PV(2 + i)n
c) FVn = PV(1 + i)n
d) None of the above

15. Assume that you need 5,000 rupees in 2 years. Determine how much you need to
deposit today at a discount rate of 5% and 10% compounded annually.

a) 4535.14, 4132.23)
b) 5000, 4900
c) 4700, 4200
d) 4850.10, 4323

16. Opportunity cost significant in following cases:

a. consumption decisions
b. production decisions
c. national priorities
d. all of the above

17. Identify micro variables from the following with reasons:

a) Demand of maruti Suzuki cars in India

b) Inflation rate

c) Supply of ice-creams in north India

d) Gross domestic product

e) Market price of i-phones

18. Identify macro variables from the following with reasons:

a) Inflation rate

b) Supply of ice-creams in north India

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c) Economic growth of a country

d) Unemployment

e) National expenditure

19. 20% of India’s population lives below poverty line. This is part of:
a) Partial equilibrium analysis
b) Positive economics
c) Both a) and b)
d) None of the above

20. Government announces in the budget that income tax will be increased in the
related fiscal year. Analysing its impact on production of goods and services is
a) partial equilibrium analysis
b) general equilibrium analysis
c) both a and b
d) none of the above

21. The time range for long run time period is:

a) 5 years
b) 2 years
c) More than one year
d) Less than one year

22. Theory of production and theory of cost is studied under the subject matter of
a) microeconomics
b) Macroeconomics
c) Public finance
d) International economics

23. Which are anti-competitive activities

a) Abuse of dominance
b) Bid rigging
c) Both a) and b)
d) None of the above

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24. Which of the following is economic offence:

a) rape
b) murder
c) tax evasion
d) None of the above

25. Economic analysis of law may be said to have begun with

a) Adam Smith
b) A Marshall
c) Bentham
d) Samuelson

26. Which of the following are examples of contraband goods.

a) Import of gold
b) Import of cocaine
c) Smuggling of weapons
d) All of the above

27. Scarcity and choice are inseparable:

a) Only at consumer’s level
b) Only at producer’s level
c) Only at national level
d) All of the above

28. Which of the following is a statement of normative nature in economics?

a) Economics is the study of choice alternatives
b) Govt. should be concerned with how to reduce unemployment
c) According to an estimate, more than 10% of houses in Indian cities are lying
vacant.
d) Accomodation of refugees is posing a big problem for the Europe

29. The opportunity cost of 500kg of wheat produced on a land which can produce 400
kg of rice is:

a) 100 kg of rice
b) 400 kg of rice
c) 600 kg of rice
d) None of the above

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30. Study of macroeconomics if concerned with:

a) Theory of demand
b) Determination of aggregate output
c) General price level
d) Bothe b and c

31. Which of the following is related to the problem ‘for whom to produce’?

a) Factor distribution of income

b) Inter-personal distribution of income
c) Both a and b
d) None of the above

32. Slope of PPC is:

a) A straight line
b) Convex to origin
c) Concave to origin
d) None of the above

33. The reason behind outward shift in PPC could be

a) Growth of resources
b) Technological advancement
c) Either a or b or both
d) Obsolete technology

34. Normative economics is based on:

a) Ethical consideration
b) Fact and generalization
c) What is or what should be
d) All of these

35. An example of positive economic analysis would be

a) An analysis of relation between price of food and quantity bought

b) Determining how much income each person should be granted
c) Determining the fair price for food
d) Deciding how to distribute the output of the company

36. Problem of what to produce is related to:

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a) Growth of resources
b) Allocation of resources
c) Scarcity of resources
d) Any of these

37. Questions like what should be the level of national income, what should the wage
rate be; fall within the scope of :

a) Positive economics
b) Normative economics
c) Both a and b
d) None of the above

38. Time value of money indicates that

a) A unit of money obtained today is worth more than a unit of money obtained in
future

b) A unit of money obtained today is worth less than a unit of money obtained in
future

c) There is no difference in the value of money obtained today and tomorrow

d) None of the above

39. Identify economic agents from the following:

a) Household
b) Firm
c) Government
d) All of the above

40. The central problem of an economy is

a) Assigning limited resources in a way that unlimited desires and needs of the society are
satisfied
b) Ensuring a minimum income for each citizen.
c) Assuring that production happens in the most effective way.
d) Analyzing the demand with market economies.

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41. Which branch of economic theory is associated with the difficulty of

resources allocation
a) Econometrics.
b) Micro-economic theory
c) Macro-economic theory
d) None of the above

42. The creation of choice is done by

A) Scarcity of resources
B) Less choice option
C) The urgency of needs
D) Abundance of resources

43. Property rights provide incentives to

a) to conserve renewable resource stocks

b) to exhaust resources
c) overuse resources
d) none of the above

44. Producers may try to reduce the competition by

a) Bid rigging
b) Predatory pricing
c) Abuse of monopoly power
d) All of the above

45. Market sharing is where business competitors agree with each other:
a) not to approach each other’s customers
b) not to compete with them for customers, for example in specific locations
c) both a and b
d) none of the above

46. Which of the following methods are adopted for money laundering?
a) Smurfing schemes
b) Casino schemes

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c) Foreign investment
d) All of the above

47. Which is not an economic crime?

a) Bank fraud
b) Murder
c) Money laundering
d) All of the above

48. COFEPOSA is related to:

a) Money laundering
b) Property rights
c) Illicit trafficking of contraband goods
d) None of the above

49. The field of economic analysis of law may be said to have begun with:
a) Bentham
b) Marshall
c) Keynes
d) Pigou

50. PPC is concave to origin due to:

a) Increasing opportunity cost
b) Diminishing opportunity cost
c) Constant opportunity cost
d) None of the above

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