Chapter – 1 Nature _ Scope of Q 10.

Which of the following is not an economic

Business Economics activity?
(a) Housewife doing household duties
Basics of Business Economics (b) Manufacturing of garments at subsidized rate.
(c) Medical facility rendered by charitable trust
Q 1. The word ‘Economics’ originates from the word (d) A CA doing his own practice.
………………
(a) Oikomnomikos (b) Oikonomia Q 11. Which of the following is an economic activity?
(c) Eikonomikos (d) Ekconomics (a) Housewife doing household duties
(b) Listening to music on radio
Q 2. The word ‘Economics’ originates from the ………… (c) Medical facility rendered by charitable trust
world ‘Oikonomia’ (d) Teaching one’s own son at home
(a) Roman (b) French
(c) Greek (d) European Q 12. The law of Scarcity-
(a) Does not apply to developed and rich countries
Q 3. Till 19th century Economics was known as (b) Applies only to less developed countries
(a) Political Economy (b) Social Economy (c) Implies that the consumers’ want will be satisfied in a
(c) Both (a) and (b) (d) Neither (a) nor (b) socialist economy
(d) Implies that consumers’ want will never be completely
Q 4. The meaning of Greek word ‘oikonomia’ is ……. satisfied.
(a) Wealth Management (b) House Management
(c) Business Economics (d) Business Management Q 13. What does the scarcity of resource implies…
(a) We must develop way to decrease our individual
Q 5. Human wants are…... and means to satisfy these wants
wants are…... (b) Not all wants can be satisfied
(a) Limited, scarce (b) Unlimited, unlimited (c) Resources can not satisfy any want
(c) Unlimited, scarce (d) Limited, Unlimited (d) Resources are very scarce and shall not be used at all

Q 6. The meaning of the word ‘Economic’ is closely Q 14. Rational decision making requires-
connected with the word- (a) One’s choice never vary
(a) Scarce (b) Unlimited (b) One’s choice be consistent with one’s goal
(c) Restricted (d) Both (a) and (b) (c) One makes choices that do not involve trade-offs
(d) One must be graduate to make decision
Q 7. In Business economics ‘ends’ refers to-
(a) Human wants (b) Resources Q 15. …….. DefinedBusiness Economics in terms of the
(c) Both (a) and (b) (d) Neither (a) nor (b) use of economic analysis in the formulation of business
policies?
Q 8. In Business economics ‘Means’ refers to- (a) J.B Say
(a) Human wants (b) Resources (b) Alfred Marshall
(c) Both (a) and (b) (d) Neither (a) nor (b) (c) Walker
(d) Joel Dean
Q 9. Which of the following is an economic activity?
(a) Boy helping his friend to solve puzzle. Q 16. Business Economics is also known as…………
(b) Teams playing friendly football match (a) Managerial Economics
(c) A teacher teaching to class (b) Social Economics
(d) Watching Television (c) Environmental Economics

1.1 | Page
 (d) Money Market Economics (d) Which production method should be used for
manufacturing of goods?
Q 17. Which of the following statement is not correct?
(a) Business Economics refers to the integration of Q 23. Pragmatic approach means -
economic theory with business practice (a) Realistic (b) Practical.
(b) Business Economics is not only valuable to business (c) Both (a) and (b) (c) Neither (a) nor (b)
decision makers, but also useful for managers of ‘not-
Q 24.
for-profit’ organisations Positive Science explains-
(c) theories of Economics provide the tools which explain (a) “What is” (b) “What was”
various concepts such as demand, supply, costs, price, (c) “What ought to be” (d) “What will”
competition etc
(d)Business Economics is concerned only with Micro Q 25. Normative Science explains-
Economics (a) “What is” (b) “What ought to be”.
(c) “What will” (d) Both (a) and (b)
Q 18.
Economic theories are….…
(a) Simplistic (b) Hypothetical Q 26. Positive science is-
(c) Old (d) Both (a) and (b) (a) Descriptive (b) Prescriptive
(c) Explanatory (d) Imaginary
Q 19. Consider the following and decide, which economy
(if any) is without scarcity Q 27. Normative science is-
(a) American economy (a) Descriptive (b) Prescriptive
(b) Indian economy between 1947-2000 (c) Explanatory (d) Imaginary
(c) Pre independent Indian economy
(d) None of the above Q 28. The study of economic behavior of an individual
firm or industry in national economy is called as ……
Q 20. ………..refers to the process of selecting an (a) Micro Economics (b) Macro Economics
appropriate alternative that will provide the most (c) Business Economics (d) Behavioral Economics
efficient means of attaining a desired end, from two or
Q 29.
more alternative courses of action? Macro Economics deals with
(a) Problem solving (a) External value of money
(b) Problem analyzing (b) Employment and economic growth
(c) Managerial expertise (c) General price level
(d) Decision making (d) All of above

Q 21. Which of the following involves Business decision Q 30.

We mainly study the following in Micro-
making? Economics: ………………
(a) Continue or shut down decision (a) General price level
(b) Launching of new product (b) National income and output
(c) Proper debt and equity mix (c) Location of industry
(d) All of the above (d) Employment and economic growth

Q 22. Which of the following does not involve Business Q 31. We mainly study the following in Macro-
decision making? Economics: ………………
(a) Lease or purchase of an asset (a) External value of money
(b) Deciding which movie to watch on weekend (b) Product pricing
(c) In-house production or outsource (c) National income and output
(d) (a) and (c)

1.2 | Page
 (a) Positive or pure science
Q 32. Micro and macro are not two independent (b) Normative science
approaches to economic analysis but they are (c) None of the above
complementary to each other. (d) All of above
(a) False (b) True
(c) Partly true (d) Partly false Q 41. ……….evaluates and pass value judgment
(a) Positive science (b) Pure science
Q 33.
Inventory does not includes (c) Social Science (d) Normative Science
(a) Raw Material (b) Work in progress
(c) Finished goods (d) None of the above Q 42. Business economics is not affected by external
factors
Q 34. The study of behavior of consumers in the market (a) True (b) False
and the effect of changes in the determinants of demand (c) Partially true (d) Cannot be commented
is called as
(a) Demand analysis (b) Demand forecasting Q 43. State which of the following statement is not true
(c) Cost analysis (d) Market analysis (a) Business economics is inter-disciplinary
(b) There are three types of economy- Socialist Economy,
Q 35. ………. is the technique of predicting future demand Capitalist Economy and Mixed Economy
of goods and services on the basis of past behavior of (c) Business Economics used the theory of Market and
factor. Private Enterprises
(a) Demand analysis (b) Demand Forecasting (d) The term Micro-Economics is Derived from Greek
(c) Market analysis (d) Price analysis work ‘Makros’

Q 36. …………explains the relationship between input and Q 44.

……enables the firm to recognise the behaviour of
output costs when variables such as output, time period and size
(a) Cost theory (b) Supply theory of plant changes.
(c) Demand theory (d) Production theory (a) Cost analysis (b) Accounting cost
(c) Production analysis (d) Demand analysis
Q 37.
Degree of market power is determined by-
(a) Demand analysis Q 45. Economics is a …………
(b) Cost analysis (a) Science (b) Art
(c) Market structure analysis (c) Both (a) and (b) (d) Neither (a) nor (b)
(d) All of the above
Q 46. What is the “fundamental premise of the
Q 38. ……..also called as ‘Price Theory’ as it explains the economics?”
composition of total production. (a) Natural Resources will always be scarce
(a) Micro economics (b) Macro Economics (b) Individuals are capable of establishing goals and
(c) Demand theory (d) Supply theory acting in manner consistent with achievement of
those goals
Q 39. …….also called as ‘Income Theory’ as it explains (c) Individuals chose alternative for which they believe
level of total production, total consumption, total savings the net gain to be the greatest.
and total investment and the rice or fall in these levels. (d) No matter what the circumstance, individual choice
(a) Micro economics (b) Macro economics always involves a trade- off
(c) Demand Theory (d) Supply theory
Q 47. Wants can be satisfied by consumpotion
Q 40. ……..analyses cause and effect relationship but of………../ are economic wants
does not pass any value judgment. (a) Goods (b) Services

1.3 | Page
(c) Goods and services (d) None of the above (c) All countries, without exception, face problem of
scarcity.
Q 48. In Mixed economy, private sector- (d) Developed countries do not face Central Economic
(a) Are absolutely free to make any type of decisions Problems
(b) Works only for social objectives
(c) Are regulated directly and / or indirectly by Q 54. Which of the following is not a central economic
government problem?
(d) Does not exists at all (a) What to produce? (b) When to produce?
(c) How to produce? (d) For whom to produce?
Q 49. ……….. systematized the concept in the form the
Q 55.
book which was entitled as, ‘‘An Enquiry intothe Nature Central Problems arises in case of-
and Cause of the Wealth of Nations’’ (a) Capitalist Economy (b) Socialist Economy
(a) George Bernard Shaw (c) Mixed Economy (d) All of the above
(b) Adam Smith.
Q 56.
(c) Alfred Marshall If there is adequate recourse in an economy, then
(d) A. C. Pigou there is no economy problem at all. This statement is-
(a) False
Q 50. Adam smith published his masterpiece “An enquiry (b) True
into the nature and causes of wealth of nation” in the (c) Partially True
year …………. (d) Cannot be commented at all
(a) 1776 (b) 1786
(c) 1756 (d) 1766 Q 57. The Problem of ‘What to Produce’ covers the
issue relating to-
B. Central Economic Problem (a) What goods are to be produced?
(b) What quantities of goods are to be produced?
Q 51. The Central Economic problem is that of- (c) Both (a) and (b)
(a) Allocating the scarce recourse in such a manner that (d) Neither (a) nor (b)
society’s unlimited wants are satisfied as far as
possible Q 58. The economy which uses all its recourses on
(b) Giving jobs to poor and backward. production of …… goods only, con not provide for future
(c) Guaranteeing that the production occurs in most growth prospect.
efficient manner (a) Consumer goods only (b) Capital goods only
(d) All of above (c) Both (a) and (b) (d) Neither (a) nor (b)

Q 52. Which of the following is the cause of central Q 59. Productive efficiency means -
economic problem? (a) Recourses are employed in their most valued uses
(a) Scarcity of recourses (b) Total number of goods produced is more
(b) Unlimited wants (c) Goods and services are produced at least cost without
(c) Alternative use wastage
(d) All of the above (d) Best recourse are employed

Q 53. State which of the following statement is not true Q 60. In deciding ‘ how to produce’ the economy should
(a) If the recourses were unlimited, people would be able decide on-
to satisfy their wants. (a) Types to goods to be produced
(b) If recourse has only single use, then also economic (b) Consumer goods or capital goods
problem would not arise. (c) Method of production
(d) Quantity of goods to be produced

1.4 | Page
 (a) Share of different people in total output of goods and
Q 61. While solving the question of ’ how to produce’ the services
economy should consider- (b) How to distribute and share the national product.
(a) Labour intensive technique (c) Both (a) and (b)
(b) Capital intensive technique (d) Neither (a) nor (b)
(c) Both (a) and (b)
(d) Neither (a) nor (b) Q 68. An economy can spend on all its recourses on
current consumption without making provision for
Q 62.
While solving the question of ’ how to produce’ the economic growth
choice of appropriate method of production depends (a) True (b) False
upon- (c) Partially true (d) Cannot be commented at all
(a) Availability of factor of production
Q 69.
(b) Price of different factor of production In the context of capitalist economy, which of the
(c) Both (a) and (b) following statement if false- {Omit this question}
(d) Neither (a) nor (b) (a) Private property is the mainstay of capitalism
(b) Profit is the driving force in capitalist economy
Q 63. Which of the following statement is not true- (c) Decision of customers and businesses determines
(a) There are various alternative techniques of producing economic activity.
a commodity. (d) None of above
(b) A society cannot satisfy each and every want of
society. Q 70. Laissez-faire economy is another term used for
(c) If society uses all the resources for current (a) Mixed economy (b) Capitalist economy
consumption and no provision is made for future (c) Socialist economy (d) None of the above
production, the society’s production capacity would
not increase.. Q 71. Which of the following is not the feature of
(d) None of above capitalist economy:
(a) Right to private property.
Q 64.
Capital intensive technique would get chosen in (b) Freedom of economic choice.
(a) Capital surplus economy (c) Collective ownership
(b) Labour surplus economy (d) Consumer Sovereignty
(c) Developed economy
(d) Developing economy Q 72. Consumer Sovereignty means-
(a) that buyers ultimately determine which goods and
Q 65. Labour intensive technique would get chosen in services will be produced and in what quantities.
(a) Capital surplus economy (b) consumer will pay only how much he can.
(b) Labour surplus economy (c) consumer will help the producer in manufacture of
(c) Developed economy goods or rendering of services
(d) Developing economy (d) consumer have unlimited purchasing power.

Q 66. Q 73.
Distribution and sharing of national product .…… determines which goods and services will be
relates to the problem of produced and in what quantity
(a) How to provide for economic growth (a) Buyer (b) Seller
(b) What to produce (c) Government (d) All of the above
(c) How to produce
(d) For whom to produce Q 74. Capitalist economy uses……… to solve economic
problem
Q 67. The problem of ‘ for whom to produce’ deals with (a) impersonal forces of market demand and supply.

1.5 | Page
 (b) price mechanism. Q 81. Free market economy driving force is-
(c) external reports (a) Welfare of the people
(d) economic theories. (b) Profit motive
(c) Rising income and level of living
Q 75.
An entrepreneur will produce goods and services (d) None of the above
choosing that technique of production which renders his
cost of production…… Q 82. Under………..economy, government has no
(a) Minimum. control over price fluctuations
(b) Maximum. (a) Mixed economy (b) Free Market
(c) Exactly similar to other competitors. (c) Socialist economy (d) None of the above
(d) Higher compared to other competitor
Q 83. Which type of economy gives rise to most
Q 76. Which of the following statement is true in context efficient allocation of recourse and capital in the
with economic problem of ‘ for whom to produce’ standard Micro-Economic framework?
(a) Higher the income, higher will be the buying capacity (a) Free market economy
and higher will be his demand for goods in general. (b) Mixed economy
(b) Higher the income, lower will be the buying capacity (c) Controlled market economy
and higher will be his demand for goods in general (d) None of the above
(c) Goods will be produced for those who do not have
buying capacity Q 84. Under capitalist economies, the answer to the
(d) income one will be able to make depends only on the fundamental questions-what, how and for whom to
amount of work he does produce are obtained by–
(a) Market forces of demand and supply.
Q 77. For analysing ownership and utilisation of (b) Government regulation
recourses, economies are classified into- (c) Cost benefit analysis
(a) Mixed economy (b) Capitalist economy (d) All of the above.
(c) Socialist economy (d) All of the above
Q 85.
In a free market economy the allocation of
Q 78. Capitalist economy is characterised by- resources is determined by –
(a) Profit motive (a) Votes taken by consumers
(b) Competition among buyers and sellers (b) A central planning authority
(c) Inequality of income. (c) Consumer preference
(d) All of the above (d) The level of profits of firms

Q 79. An economic system in which all means of Q 86. The concept of “competition” in a capitalist
production are owned and controlled by private economy refers to-
individuals for profit is called as…………… economy (a) Competition among sellers to sell goods.
(a) Capital (b) Social (b) Competition among buyers to obtain the goods to
(c) Mixed (d) None of the above satisfy their wants
(c) Both (a) and (b)
Q 80. Which of the following is not a feature of capitalist (d) Neither (a) nor (b)
economy-
(a) Right to private property Q 87. Discounts, price cutting, Advertisements, etc in
(b) Profit motive capitalist economy are-
(c) Freedom of enterprise (a) Types of government regulation
(d) Equal distribution of income (b) Effects of consumer sovereignty.
(c) Method of handling competition.

1.6 | Page
(d) None of the above. (c) Central planning authority
(d) Consumer forum,
Q 88. Inequalities of income refers to?
(a) All workers do not get equal wages Q 95. National income is more often evenly distributed
(b) Gap between rich and poor in-
(c) All companies do not earn same profit (a) Mixed economy
(d) All of the above (b) Command economy
(c) Both (a) and (b)
Q 89. Socialist economy is also known as- (d) Neither (a) nor (b)
(a) Free market economy (b) Mixed economy
(c) Traditional economy (d) Command economy Q 96. In Socialist economy, the concept of consumer
sovereignty is-
Q 90. Under Socialist economy………… takes decision for (a) Restricted (b) Unrestricted
allocation of recourses (c) Recognised. (d) None of the above
(a) Central planned authority
(b) Seller Q 97. Pure form of socialist economy does not exist in
(c) Buyer present days
(d) Foreign diplomats (a) False
(b) True
Q 91.
Which of the following not the feature of socialist (c) Partially true
economy- (d) Cannot be commented at all
(a) Collective ownership
(b) Profit Motive Q 98. Identify the correct statement-
(c) Absence of economic choice (a) In capitalist economy, people are not free to spend
(d) Relatively equal income distribution their income as they like
(b) In socialist economy right to work is guaranteed but
Q 92. Socialist economy is characterised by- the choice of occupation gets restricted.
(a) Selective production of goods (c) In Socialist economy, a relative inequality in income is
(b) Relative equality of income an important feature
(c) Secondary role of price mechanism (d) In Socialist economy, people are not allowed to
(d) All of the above choose between available range of choice

Q 93. Which of the following applies to socialist Q 99. Which of the following is not a micro economic
economy- subject matter?
(a) Balance between social objective and economic (a) The price of mangoes
activity (b) The cost of producing a fire truck for the fire
(b) Private ownership of all recourses and factor of department of Delhi, India.
productions (c) The quantity of mangoes produced for the mangoes
(c) Total absence of government regulation market.
(d) Market mechanism to solve central economic (d) The national economy’s annual rate of growth.
problem
Q 100. In Mixed economy there are ….. sectors of
Q 94. Under command economy, all the decision from industries
allocation of recourse to distribution of end product, is (a) One (b) Two
taken care by (c) Three (d) Four
(a) Producers
(b) Cartels
Q 101.
1.7 | Page
 In mixed economy, industries are found in…… A Mixed economy focuses on ensuring
(a) Joint Sector (b) Private sector (a) Productive efficiency of capitalism
(c) Public sector (d) All of the above (b) Distributive justice of Socialism
(c) Both (a) and (b)
Q 102.
In Mixed economy, industries in private sectors (d) Neither (a) nor (b)
have…. as their objective and driving force, while public
sector have……..as their objective and driving force ?
(a) profit motive, community welfare
(b) community welfare, profit motive
(c) community welfare, own profit
(d) None of the above

Q 103. In India areas like atomic energy, defence, etc are

in the hands of….
(a) Public sector (b) Private sector
(c) Joint sector (d) All of the above

Q 104. ……….. is the demerit of capitalist economy

(a) Low cost of production
(b) High regulation of government
(c) No incentive for hard work
(d) Inequality of income

Q 105. Indian economy is an example of………

(a) Mixed economy (b) Socialist economy
(c) Capitalist economy (d) None of the above

Q 106.

1.8 | Page
 Que Ans Que Ans Que Ans Que Ans Que Ans
1. B 23. C 45. C 67. C 89. D
2. C 24. A 46 C 68. B 90. A
3. A 25. B 47. C 69. D 91. B
4. B 26. A 48. C 70. B 92. D
5. C 27 B 49. B 71. C 93. A
6. A 28. A 50. A 72. A 94. C
7. A 29. D 51. A 73. A 95. B
8. B 30. C 52. D 74. D 96. A
9. C 31. D 53. D 75. A 97. B
10. A 32. B 54. B 76. A 98. B
11. C 33. D 55. D 77. D 99. D
12. D 34. A 56. A 78. D 100. C
13. B 35. B 57. C 79. A 101. D
14. B 36. D 58. A 80. D 102 A
15. D 37. C 59. C 81. B 103. A
16. A 38. A 60. C 82. B 104 D
17. D 39. B 61. C 83. A 105 A
18. D 40. A 62. C 84. A 106. C
19. D 41 D 63. D 85. C
20. D 42. B 64. A 86. C
21. D 43 D 65. B 87. C
22. B 44. A 66. D 88. B

1.9 | Page
 Chapter 1- Nature and Scope of Q.8. In a free-market economy, when consumers
increase their purchase of a goods and the level of
Business Economics exceeds then prices tend to rise :
Past Year & Most Frequent MCQ (a) demand, supply (b) supply, demand
(c) prices, demand (d) profits, supply
Q.1. 'Economics is the study of mankind in the ordinary
business of life was given by Q.9. According to Robbins, 'means' are:
(a) Adam Smith (b) Lord Robbins (a) Scarce (b) Unlimited
(c) Alfred Marshall (d) Samuelson (c) Undefined (d) All of these

Q.2. The branch of economic theory that deals with the Q.10. Economics is the study of
problem of allocation of resources is (a) How society manages its unlimited resources
(a) Micro economics (b) Macroeconomics (b) How to reduce our wants until we are satisfied
(c) Econometrics (d) None of these (c) How society manages its scarce resources
(d) How to fully satisfy our unlimited wants
Q.3. Capitalistic Economy uses __ as principal means of
allocating Resources Q.11. A mixed economy means :
(a) demand (b) supply (a) Co-existence of small and large industries
(c) price (d) all of the above (b) Promoting both agriculture and industries in the
economy
Q.4. A study of how an increase in the corporate income (c) Co-existence of rich and poor
tax rate will affect the natural unemployment rate is an (d) Co-existence of public and private sectors
example of:
(a) Macroeconomics Q.12. Who defines Economics in terms of Dynamic
(b) Descriptive Economics Growth and Development?
(c) Microeconomics (a) Robbins (b) Paul A Samuelson
(d) Normative Economics (c) Adam Smith (d) None

Q.5. In which type of economy do consumers and Q.13. A Free Market economy, solves its Central
producers make their choices based on the market Problems through
forces demand and supply? (a) planning authority
(a) Open Economy (b) Controlled Economy (b) market mechanism
(c) Command Economy (d) Market Economy (c) both
(d) none
Q.6. Under a free economy, prices are:
(a) Regulated Q.14. Normative aspect of Economics is given by :
(b) Determined through a free interplay of demand and (a) Marshall (b) Robbins
supply (c) Adam Smith (d) Samuelson
(c) Partly regulated
(d) None of these Q.15. Which one is not the characteristic of a
capitalistic economy?
Q.7. Which of the following falls under microeconomics? (a) Profit motive (b) Income inequality
(a) National income (c) Free employment (d) Collective ownership
(b) General price level
(c) Factor pricing Q.16. Mixed economy means
(d) National saving and investment (a) All economic decisions are taken by the Central
Authority

Page | 1.10
(b) All economic decisions are taken by private Q.25. Which of these is an example of macroeconomics:
entrepreneurs (a) The problem of unemployment in India
(c) Economic decisions are partly taken by the state and (b) The rising price level in the country
partly by private entrepreneurs (c) Increase in disparities of income
(d) None of these (d) All of the above

Q.17. Economic Problem arises when : Q.26. In a capitalist economy the allocation of resources
(a) Wants are unlimited is performed by:
(b) Resources are limited (a) Producers (b) Government
(c) Alternative uses of resources (c) Planners (d) Price mechanism
(d) All of the above
Q.27. Which of the following statements is incorrect?
Q.18. Micro economics is also known as (a) Alfred Marshall propagated the wealth definition of
(a) public economics (b) price theory Economics
(c) income theory (d) demand theory (b) L. Robbins introduced the 'Scarcity' definition of
Economics
Q.19. A developed economy uses technique in (c) Samuelson emphasized upon the "growth" aspect of
production Economics
(a) labour intensive (b) capital intensive (d) A.C Pigou believed in the 'welfare' aspect of
(c) home-based (d) traditional Economics

Q.20. Which one is the feature of Marshall's definition? Q.28. Inequalities of income do not perpetuate in
(a) Limited ends (a) socialism (b) mixed economy
(b) Scarce means (c) capitalism (d) none
(c) Study of wealth as well as study of man
(d) Study of allocation of resources Q.29. Which of the following are the features of a mixed
economy?
Q.21. Which one in the following is not correct : (a) Planned economy
(a) There are limited wants (b) Dual system of pricing exists
(b) Means are scarce (C) Balanced regional development
(c) Resources have alternative uses (d) All of the above.
(d) Economics is science
Q.30. Normative Economics is based on:
Q.22. Micro Economics is concerned with: (a) Ethical Considerations
(a) Consumer Behaviour (b) Product pricing (b) Facts and Generalization
(c) Factor Pricing (d) All of the above (c) What is?
(d) All of the above
Q.23. Who gave the positive aspect of science?
(a) Alfred Marshall (b) A.C. Pigou Q.31. The dual system of pricing exists in:
(c) Adam Smith (d) Robbins (a) Free market economy
(b) Socialistic economy
Q.24. Which of these is a part of microeconomics? (c) Mixed economy
(a) Factor pricing (b) National Income (d) None of the above
(c) Balance of payment (d) None
Q.32. A Capitalist Economy follows the policy of:
(a) Laissez-faire
(b) Regulated markets

Page | 1.11
(c) Promoting public sector Q.40. Economics which is concerned with welfare
(d) None of the above. propositions is called
(a) Socialistic economics
Q.33. "Economics is the science of choice-making' (b) Capitalistic economics
implies:- (c) Positive economics
(a) No choice is to be made (d) Normative economics
(b) The choice to be made between alternative uses
(c) The choice to be made between means and ends Q.41. In which among the following systems the right to
(d) None of the above property' exists
(a) Mixed economy (b) Capitalist economy
Q.34. Which of the following is a part of the subject (c) Socialist economy (d) Traditional economy
matter of macro economics?
(a) Study of firms Q.42. Positive science only explains
(b) Aggregate profits of a firm (a) What is?
(c) Market demand for a product (b) What ought to be?
(d) Net national product. (c) What is right or wrong
(d) None of the above
Q.35. A capitalist economy is by and large
(a) a closed economy Q.43. Socialist Economy is also known as
(b) a free market economy (a) Mixed Economy (b) Planned Economy
(c) a centrally controlled economy (c) Capitalist Economy (d) None of the above
(d) an economy in which a government neither collects
any taxes nor incurs any expenditure Q.44. Who has defined economics as "Science which
deals with wealth"?
Q.36. A free-market economy's driving force is: (a) Adam Smith (b) Canon
(a) Profit motive (c) J.B. Say (d) A.C. Pigou
(b) Welfare of the people
(c) Rising income and levels of living Q.45. Which of the following is not a feature of a
(d) None of the above capitalist economy?
(a) Right to private property
Q.37. "Economics is neutral between ends". The (b) Restrictions on consumers right to choose
statement is given by: (c) Profit motive
(a) L. Robbins (b) Mrs. Joan (d) Freedom of enterprise
(c) Alfred Marshall (d) A.C. Pigou
Q.46. The most important function of an entrepreneur is
Q.38. A system of economy in which all the means of to
production are owned and controlled by the private a) innovate
individuals for the purpose of profit is called (b) bear the sense of responsibility
(a) Socialist Economy (b) Capitalist Economy (c) finance
(c) Mixed Economy (d) All of the above (d) earn profit

Q.39. Where does the price mechanism exist? Q.47. The meaning of time element in economics is:
(a) Capitalist Economy (a) Calendar time
(b) Socialist Economy (b) Clock time
(c) Both types of economies (c) Operational time in which supply adjusts with the
(d) None of the above market demand
(d) None of the above

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 (d) To provide job to every job seeker.
Q.48. All wants of an individual are not of:
(a) Equal importance Q.55. Socialist Economy was propounded by:
(b) Immediate importance (a) Karl Marx & Fredut Angles
(c) Fixed importance (b) Samuelson
(d) All of the above (c) A.C. Pigou
(d) Adam Smith
Q.49. Micro economics does not study
(a) Consumer behavior (b) Factor pricing Q.56. Concept of Business Economics was given by:
(c) General price level (d) Firms equilibrium. (a) Joel Dean (b) Alfred Marshall
(c) Adam Smith (d) L. Robbins
Q.50. Find out the correct statement
(a) Higher the prices, lower the quality demanded of a Q.57. A business economy involves the theory of
product is a normative statement Business economics with
(b) Micro and macro-economics are interdependent (a) Normative Economics (b) Business practices
(c) In a capitalist economy, the economic problems are (c) Micro Economics (d) Macro Economics
solved by planning commission
(d) In deductive method logic proceeds from particular Q.58. Which is not included in Economics?
to the general (a) Family Structure
(b) Managerial Economics
Q.51. Microeconomics is the study of: (c) Micro Economics
(a) Individual parts of the economy (d) Macro Economics
(b) The economy as a whole
(c) Choice making Q.59. In which economy market and government both
(d) Development of the economy play an important role?
(a) Mixed economy (b) Socialistic economy
Q.52. The definition of economics given by Robbins does (c) Capitalistic economy (d) Business economy
not deal with one of the following aspects. Indicate that
aspect. Q.60. Which factor is included in business Economics?
(a) Scarce means (b) Limited ends (a) Business Economics is an art
(c) Alternative uses d) Economics is a science (b) Interdisciplinary in nature
(c) Normative in nature
Q.53. Which Economic System is described by (d) All of the above
Schumpeter as 'capitalism in the oxygen tent?
(a) Laissez-Faire Economy Q.61. Which out of these are the features of capitalism?
(b) Command Economy (i) Profit motive
(c) Mixed Economy (ii) Human welfare
(d) Agrarian Economy (iii) Work through price mechanism
(a) (i) and (ii)
Q.54. The Central problem in every economic society is: (b) (ii) and (iii)
(a) To ensure a minimum level of income for every (c) (i) and (iii)
individual. (d) All of these
(b) To allocate scarce resources in such a manner that
society, unlimited wants are satisfied in the best Q.62. Socialism ensures
possible manner. (a) Rapid growth and balanced development
(c) To ensure that production occurs in the most efficient (b) Right to work
manner. (c) Incentives for efficient economic decisions

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(d) Both (a) and (b) (d) Primary importance in satisfying social requirements
(1 mark)
Q.63. Macroeconomics includes
(a) Product pricing Q.69. Due to recession, employment rate and output
(b) Consumer behavior (a) Rises ; rises (b) Falls, falls
c) External value of money (c) Rises falls (d) Falls; rises
(d) Location of industry
Q.70. ______refers to the work area where surplus
Q.64. Exploitation and inequality will be more in manpower is employed out of which some individuals
(a) Socialism (b) Capitalism have zero or almost zero marginal productivity, such
(c) Mixed (d) All of the above that if they are removed the total level of output
remains unchanged.
Q.65. Shyam: This year due to heavy rainfall my anion (a) Voluntary (b) Disguised
crop was damaged Krishna : Climates affect crop yields. (c) Structural (d) Technological
Some years are bad, others are good
Q.71. Socialist economy is
Hari: Don't worry - Price increase will compensate for (a) Self-regulation
the fall in quantity supplied (b) Profit Oriented
(c) Command economy
Radhe: The Government ought to guarantee that our (d) Allocation of resources as per market requirements
income will not fall. (1 mark)
In this conversation, the normative statement is made
by Q.72. In a market economy all assets are held by:
(a) Shyam (b) Krishna (a) Investors (b) Privately
(c) Hari (d) Radhe (c) Government (d) Jointly by government

Q.66. A capitalist economy consists of Q.73. The branch of economic theory that deals with
(a) Central planning authority problem of allocating resources
(b) A mechanism to decide as to what, how and for (a) Micro economics (b) Marc economics
whom to produce (c) Econometrics (d) None
(c) Both (a) and (b)
(d) None of the above Q.74. Larger production of goods would lead to higher
production in future.
Q.67. Applied economics includes (a) consumer goods (b) capital goods
(a) Regression analysis and mathematical linear (c) agricultural goods (d) public goods
programming
(b) Capital budgeting [Link] of the following is not within the scope of
(c) Both (a) and (b) business economics?
(d) None (a) Capital budgeting (b) Risk analysis
(c) Business cycle (d) Accounting Standards
Q.68. Economic goods are considered as scarce
resources because Q.76. Which type of scarcity is referred to in economics
(a) Inadequate quantity to satisfy the needs of the (a) Relative scarcity (b) Absolute scarcity
society (c) Both (a) and (b) (d) None
(b) Not possible to increase the quantity
(c) Limited hands to make goods

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 Q.77. Cons
umer sovereignty is which of the following characteristics?
(a) Capitalist economy (b) Mixed economy
(c) Socialist economy (d) Democracy

Qn. no Ans Qn. no Ans Qn. no Ans Qn. no Ans

1 C 21 A 41 B 61 C
2 A 22 D 42 A 62 D
3 C 23 D 43 B 63 C
4 A 24 A 44 A 64 B
5 D 25 D 45 B 65 D
6 B 26 D 46 A 66 B
7 C 27 A 47 C 67 C
8 A 28 A 48 D 68 A
9 A 29 D 49 C 69 B
10 C 30 A 50 B 70 B
11 D 31 C 51 A 71 C
12 B 32 A 52 B 72 B
13 B 33 B 53 C 73 A
14 A 34 D 54 B 74 B
15 D 35 B 55 A 75 D
16 C 36 A 56 A 76 A
17 D 37 A 57 B 77 A
18 B 38 B 58 A
19 B 39 A 59 A
20 C 40 A 60 D

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