1 What concept did Marshall used in his definition of economics?
2 What is “Wealth of Nations”?
Is a book
3 Can you name the famous book of Alfred Marshall?
Principles of Economics
4 What does Economic Theory means?
Principles of economics
5 What Robbins actually talks about in his definitions?
Scarcity of resources
6 What does Market system means?
7 When was ‘Wealth of Nations’ authored?
8 Utility and usefulness are two
9 Due to which reason the validity of economic theories can never be proved with 100% certainty?
Ceteris Paribus clause
10 When a consumer is in equilibrium?
When marginal utilities are equal
11 The total is decreasing when
Marginal is negative
12 Satisfaction is most closely related to
13 What does the term marginal in economics actually means?
14 Why Demand Curve slopes downward?
Beacause of the law of Diminishing Marginal Utility
15 What restricts a consumer’s spending?
16 The second name of Law of Substitution is
Law of Equi-Marginal Utility
17 The law of Equi-Marginal Utility is a
Law of Consumption of wealth
18 Total Utility increases when
Marginal Utility is positive
19 The basis of law of demand is
Diminishing Marginal Utility
20 Total Utility is maximum when
When Marginal Utility = 0
21 Utility is the quality of a commodity that satisfies a human
Want or Need
22 Why Indifference curves are convex to the origin?
Because the two goods are imperfect substitute
23 A functional relationship is a statement of how
One variable affect another variable
24 If we plot the equation Y = 20 + 3x, its slope is
25 The relation between price and commodity is shown by
Law of Demand
26 In perfectly inelastic demand quantity demanded is
27 If a good has more substitutes, other things keeping the same, its price elasticity of demand is
28 In case of very low elasticity of demand, it means that the commodity is
29 In case of perfectly inelastic demand, an increase in price will result an increase in
30 In case of unitary elastic demand, a 25% increase in price will result how much decrease in demand?
25% decrease in quantity demanded
31 In case of a large positive number in cross elasticity of demand the good is believed to be
32 In case of inelastic demand, a change in the price will change the total revenue in
The same direction
33 In case of Giffen goods price and demand are
34 The elasticity of demand is greater than unity in case of
35 In case of durable goods the elasticity of demand is
36 The value of price elasticity of demand for normal goods is always
37 In case of normal goods, income elasticity is always
38 What is a Demand?
A Function of Price
39 In case of inelastic demand, price and total revenue move in the
40 What is Supply?
An Increasing Function of Price
41 When technology changes, Supply curve will
42 Does an increase in demand causes an effect on supply curve?
43 If price changes by 1% and supply changes by 2% then what is the case of supply?
44 Supply curve touches Y axis when elasticity of supply is
Greater than One
45 In which case supply curve is flatter?
46 Rise in supply is actually when supply of a commodity increases
Without change in price
47 A shift in market supply curve to the right occurs when
A new technique makes it cheaper to produce the good
48 Equilibrium price fall when
49 There will be shortage of commodity when prices are
Below equilibrium level
50 Supply decreases and demand increases when equilibrium price rises but
Equilibrium quantity remains unchanged
51 Which is an important idea for predicting economic changes?
52 The three productive resources are land, labor and
53 Production is the transformation of resources into
Economic goods and services
54 Output are the economic goods produced by firms
55 How many factors do we need for the production of goods?
56 With the increases in production the standard of living of a country
57 With intensive cultivation, the productivity of a land can be
58 According to Malthus population increases by which kind of progression?
59 Structural Unemployment due to mechanization of
60 The Proportion of population working or looking for work is the labor force
61 Human Capital is the set of skills that workers possess for
Production of goods
62 According to economists the creation of new capital is
63 A factory is a good example of a
64 Shareholders are those who invest in
Joint stock companies
65 One of the advantages of Joint Stock Company is
66 A public limited company is run by board of
67 Negative return in short run means that marginal is
68 Economies of scale suggests that the firm’s marginal cost curve lies
Above its average cost curve
69 One factor must be constant in law of
70 The two kinds of economies of scale are
Internal and external
71 Under perfect competition a firm is
72 In case of monopoly Marginal revenue is always
Less than average revenue
73 In Monopoly, Marginal revenue is always less than price at all levels of
74 As output increases Marginal Cost curve
First falls and then rises
75 The another name of Average Total Cost is
76 The slope of Total Cost gives an idea about
77 Does Total Cost starts from origin?
78 Which cost starts from origin? Total Variable Cost
Total Variable Cost
79 Which cost rises continuously?
80 Explicit cost is the cost that a firm incurs for
Purchasing or Hiring Factors
81 The Short run requires that at least one input is
82 The long run is a period long enough to allow firms to
Change plant size and capacity
83 Marginal Cost = Average Cost is the necessary condition for equilibrium position of
84 Profit is maximum when the distance between Total Revenue and Total Cost is
85 Profit is also maximum when the slope of Total Cost and Total Revenue is
86 A normal profit is a part of
87 What is Economic profit?
Total revenue minus total cost
88 When a firm earns economic profit?
When total profit exceeds normal profit
89 What is the basic goal of every firm?
To maximize profit
90 When a firm decides to exit the industry?
When price is less than LAC
91 When TC and TR curves are parallel profit is maximum
92 The cost curves are same in Monopoly and
93 Why normal profit is called normal?
Because it is the minimum acceptable profit to the producer
94 The loss that a firm incurs when it shuts temporarily is equal to
Total Fixed Cost
95 Under which competition Average Revenue = Marginal Revenue?
96 What is the necessary condition for equilibrium position of a firm?
MC = MR
97 Where LAC is minimum, it is the most efficient scale of
Production of a firm
98 If a firm is not covering its variable cost, the firm should
99 Every factor of production gets reward equal to the value of
100 In a perfect competition, demand for a factor is its