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All questions of Introduction to Business Economics for CA Foundation Exam
In a competitive economy, the uncrowned king is—- a)Government
- b)Producer
- c)Consumer
- d)Seller
Correct answer is option 'C'. Can you explain this answer?
In a competitive economy, the uncrowned king is—
a)
Government
b)
Producer
c)
Consumer
d)
Seller
|
Freedom Institute answered |
The uncrowned king in the competitive economy is consumer. Because everything happens according to the consumer's wish in the economy.
The interference of the government is very limited in—- a)Socialist economy
- b)Capitalist economy
- c)Mixed economy
- d)All the above.
Correct answer is option 'B'. Can you explain this answer?
The interference of the government is very limited in—
a)
Socialist economy
b)
Capitalist economy
c)
Mixed economy
d)
All the above.
|
Nikita Singh answered |
- The interference of the government is very limited in capitalist economy. There is no central planning authority. In fact, there is little or no government or central authority that takes market decisions.
- The prices are determined by the free interaction of the forces of demand and supply. It is an automatic self-regulating mechanism which runs with the motive of profit.
Which of the following is not correct?- a)Micro and Macro economics are complementary to each other
- b)Every macro-economic problem requires micro-economic analysis for its proper understanding
- c)Micro-economic behaviour can be added-up to derive macro-economic behaviour.
- d)What is macro from the national angle is micro from world angle
Correct answer is option 'C'. Can you explain this answer?
Which of the following is not correct?
a)
Micro and Macro economics are complementary to each other
b)
Every macro-economic problem requires micro-economic analysis for its proper understanding
c)
Micro-economic behaviour can be added-up to derive macro-economic behaviour.
d)
What is macro from the national angle is micro from world angle
|
Srsps answered |
- Microeconomic behaviour cannot be added-up to drive macroeconomic behaviour.
- The phenomenon in Microeconomics cannot be generalized for all the units in the economy on an aggregate level.
- For example the theory of an individual firm cannot be universally applied to the whole industrial sector in an economy. The theory of individual consumer behaviour is different from the behaviour of the whole economy’s behaviour at the aggregate level. The demand of a single person may not always match with the economy’s aggregate demand.
Macro-economics is also known as—
(i) Method of Lumping
(ii) Price Theory
(iii) General equilibrium analysis
(iv) Aggregative Economics- a)i and ii only
- b)iii and iv only
- c)i, iii and iv only
- d)ii, iii and iv only
Correct answer is option 'C'. Can you explain this answer?
Macro-economics is also known as—
(i) Method of Lumping
(ii) Price Theory
(iii) General equilibrium analysis
(iv) Aggregative Economics
(i) Method of Lumping
(ii) Price Theory
(iii) General equilibrium analysis
(iv) Aggregative Economics
a)
i and ii only
b)
iii and iv only
c)
i, iii and iv only
d)
ii, iii and iv only
|
|
Nikita Singh answered |
Macro economics relates to the study of economics as a whole in an economy. It reflects general equilibrium analysis of a set of people involved in the exchange mechanism i.e, as a market. Therefore, it measures the aggregates of all the micro units in the economy.
Economics is a science because- a)Systematised study
- b)Scientific laws
- c)Has its own methodology
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Economics is a science because
a)
Systematised study
b)
Scientific laws
c)
Has its own methodology
d)
All the above
|
|
Nikita Singh answered |
Economics as a science: Like science, economics is also based on the systematic knowledge which is based on facts and data.
Like any other science, it has its own scientific laws and theories which can be measured and verified and proved. Also, it has its own methodology.
A mixed economy to solve its central problems relies on—- a)Economic planning
- b)Price mechanism
- c)Price fixing
- d)Both ‘a’ and ‘b’
Correct answer is option 'D'. Can you explain this answer?
A mixed economy to solve its central problems relies on—
a)
Economic planning
b)
Price mechanism
c)
Price fixing
d)
Both ‘a’ and ‘b’
|
|
Srsps answered |
In mixed type economy (like India),in order to determine the equilibrium price and quantity in the market, free play of demand and supply forces takes place ,together with this government also intervenes in order to keep a check on inflationary and deflationary gap in an economy through certain fiscal and monetary policies.
Which of the following statements are positive statements?(i) India is overpopulated.(ii) Agricultural income should be taxed.(iii) Service-class people should be exempted from income tax(iv) There is tremendous tax evasion in India.a)i and iib)i and iiic)i and ivd)iii and ivCorrect answer is option 'C'. Can you explain this answer?
|
Shivam Chawla answered |
Positive statement tells the facts
and normative statment tells 'what ought to be'
and normative statment tells 'what ought to be'
Wastes of competition are found in—
- a)Capitalist economy
- b)Socialist economy
- c)Mixed economy
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Wastes of competition are found in—
a)
Capitalist economy
b)
Socialist economy
c)
Mixed economy
d)
None of these
|
|
Priyanshu Tiwari answered |
Waste of competition are found in capitalistic economy. This is because the prices are determined by the free interaction of the forces of demand and supply.
The objective of macro-economics is to study about—- a)Problems, principles and policies relating to full employment of available resources
- b)Problems, Principles and policies relating to optimum allocation of resources
- c)Growth of resources
- d)Both a and c
Correct answer is option 'D'. Can you explain this answer?
The objective of macro-economics is to study about—
a)
Problems, principles and policies relating to full employment of available resources
b)
Problems, Principles and policies relating to optimum allocation of resources
c)
Growth of resources
d)
Both a and c
|
|
Srsps answered |
Macro economics is a field of economics which deals with the economy as a whole. The objective of the macro economics is to maximize the welfare of an economy. It includes principles and policies relating to full employment of available resources as well as the growth of resources.
Micro economics is also known as—- a)Price theory
- b)Slicing method
- c)Product theory
- d)Both (a) and (b)
Correct answer is option 'D'. Can you explain this answer?
Micro economics is also known as—
a)
Price theory
b)
Slicing method
c)
Product theory
d)
Both (a) and (b)
|
|
Ræjû Bhæï answered |
Micro economics is also known as Price theory because it takes into account the demand and supply of individual units and thus aims to determine the price of a product using the factors of production.
It is also called the Slicing method as it is used in Microeconomics. This is because it divides the economy in slices, parts or individual units for the purpose of in-depth study. And hence the name slicing method.
It is also called the Slicing method as it is used in Microeconomics. This is because it divides the economy in slices, parts or individual units for the purpose of in-depth study. And hence the name slicing method.
Positive statements concern what is; normative statements concern—- a)What was
- b)What is the normal situation
- c)What will be
- d)What ought to be
Correct answer is option 'D'. Can you explain this answer?
Positive statements concern what is; normative statements concern—
a)
What was
b)
What is the normal situation
c)
What will be
d)
What ought to be
|
|
Nikita Singh answered |
Normative economics deals with what ought to be or how the economic problems should be solved.
It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
It discusses what the desirable things are and how they should be realized. Thus it is suggestive in nature.
Positive economics deals with—- a)What is
- b)What ought to be
- c)Both ‘a’ ‘b’
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Positive economics deals with—
a)
What is
b)
What ought to be
c)
Both ‘a’ ‘b’
d)
None of these
|
|
Srsps answered |
- Positive economics is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena.
- It relies on objective data analysis, relevant facts, and associated figures.
In a socialist economy, the basic force of economic activity is profit. This statement is—- a)Correct
- b)Incorrect
- c)Partially correct
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
In a socialist economy, the basic force of economic activity is profit. This statement is—
a)
Correct
b)
Incorrect
c)
Partially correct
d)
None of these
|
|
Srsps answered |
In socialist economy, the basic force of economic activity is profit.
► This statement is incorrect.
The motive is the welfare of the people. In this system, the means of production and distribution is controlled by the government. The economy is centrally planned by the government so that the useful goods are produced with the objective to look after the needs of the poor section of the society as well.
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. Bhola’s statement in the above conversation shows—- a)What is
- b)What should be the things
- c)What was
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. Bhola’s statement in the above conversation shows—
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. Bhola’s statement in the above conversation shows—
a)
What is
b)
What should be the things
c)
What was
d)
None of the above
|
|
Mahesh Chakraborty answered |
I'm really nervous about my presentation tomorrow.
Sam: Don't worry, you've got this! Just remember to take deep breaths and speak slowly.
Ram: Thanks for the advice, Sam. I just hope I don't forget anything important.
Sam: You won't forget anything. You've prepared well and you know your material inside out.
Ram: I guess you're right. I just need to believe in myself more.
What can you infer about Ram's feelings towards their presentation?
Ram is nervous and lacks confidence in their ability to deliver the presentation successfully. They are worried about forgetting important details and may be anxious about the outcome of the presentation. However, Sam's encouragement and reassurance seems to help boost Ram's confidence and ease their nerves.
Sam: Don't worry, you've got this! Just remember to take deep breaths and speak slowly.
Ram: Thanks for the advice, Sam. I just hope I don't forget anything important.
Sam: You won't forget anything. You've prepared well and you know your material inside out.
Ram: I guess you're right. I just need to believe in myself more.
What can you infer about Ram's feelings towards their presentation?
Ram is nervous and lacks confidence in their ability to deliver the presentation successfully. They are worried about forgetting important details and may be anxious about the outcome of the presentation. However, Sam's encouragement and reassurance seems to help boost Ram's confidence and ease their nerves.
Micro economics does not cover—- a)Consumer behaviour
- b)Factor Pricing
- c)General price level
- d)Product Pricing
Correct answer is option 'C'. Can you explain this answer?
Micro economics does not cover—
a)
Consumer behaviour
b)
Factor Pricing
c)
General price level
d)
Product Pricing
|
|
Freedom Institute answered |
Micro economics deals the study of economics from an individual point of view. General price level is a subject matter of macro economics.
Which of the following statement is incorrect?
- a)Business economics is a normative in nature
- b)Business economics is closely related with statistics
- c)Business economics only considers micro variables
- d)Business economics is also called Managerial economics
Correct answer is option 'C'. Can you explain this answer?
Which of the following statement is incorrect?
a)
Business economics is a normative in nature
b)
Business economics is closely related with statistics
c)
Business economics only considers micro variables
d)
Business economics is also called Managerial economics
|
|
Srsps answered |
The incorrect statement is: Business economics only considers micro variables
Business economics, also known as managerial economics, incorporates both microeconomic and macroeconomic variables. It uses concepts from both branches to help managers make decisions and solve problems in business. While it does focus heavily on microeconomic factors such as individual markets, firms, and consumer behavior, it also considers macroeconomic factors like inflation, interest rates, and economic growth that can impact business environments.
Micro economics deals with—- a)Inflation in the country
- b)The economic behaviour of an individual unit
- c)The per capita income
- d)The problems of poverty and unemployment in the country
Correct answer is option 'B'. Can you explain this answer?
Micro economics deals with—
a)
Inflation in the country
b)
The economic behaviour of an individual unit
c)
The per capita income
d)
The problems of poverty and unemployment in the country
|
|
Mahesh Chakraborty answered |
Microeconomics deals with prices and production in single markets , The economic behaviour of an individual unit and the interaction between different markets, but leaves the study of economy-wide aggregates to macroeconomics.
A theory may contain all but not one of the following—- a)An unorganised collection of facts about the real world!
- b)A set of definitions of the terms used.
- c)A set of assumptions
- d)One or more hypotheses
Correct answer is option 'A'. Can you explain this answer?
A theory may contain all but not one of the following—
a)
An unorganised collection of facts about the real world!
b)
A set of definitions of the terms used.
c)
A set of assumptions
d)
One or more hypotheses
|
|
Nikita Singh answered |
When a written piece is termed as a theory it should have many specifications like facts, assumptions, definitions etc. but the foremost important as well as necessary input is of fact based on real world because theories cannot be developed on fantasies but it should be backed by some legitimate facts.
Positive economics remains strictly neutral towards ends. This means that—- a)Positive economics study the facts as they are
- b)Positive economics is prescriptive in nature
- c)Positive economics is based on ethical, philosophical and religious beliefs
- d)Only (a) and (b)
Correct answer is option 'A'. Can you explain this answer?
Positive economics remains strictly neutral towards ends. This means that—
a)
Positive economics study the facts as they are
b)
Positive economics is prescriptive in nature
c)
Positive economics is based on ethical, philosophical and religious beliefs
d)
Only (a) and (b)
|
Devanshi Rane answered |
Positive economics focuses solely on describing and explaining economic phenomena without making any value judgments about whether they are good or bad. It is concerned with what is, rather than what ought to be. Positive economics aims to provide an objective analysis of economic behavior and outcomes, free from any personal biases or normative assumptions. This allows policymakers and economists to make informed decisions based on data and evidence, rather than personal opinions or beliefs.
Find the odd—- a)Normative economics is concerned with welfare propositions.
- b)Normative economics is prescriptive in nature.
- c)Normative economics is regulatory in nature.
- d)Economic laws are hypothetical.
Correct answer is option 'D'. Can you explain this answer?
Find the odd—
a)
Normative economics is concerned with welfare propositions.
b)
Normative economics is prescriptive in nature.
c)
Normative economics is regulatory in nature.
d)
Economic laws are hypothetical.
|
|
Nikita Singh answered |
Correct Answer :- d
Explanation : Economic laws are not hypothetical in nature, while many microeconomic models may involve many assumptions and tend to over simplify situations, the broad theories are still valid in the real world, it has been proven time and again with empirical data.
Normative economics deals with subjective economics, and are grounded in personal opinions rather than empirical facts. They tend to be prescriptive and regulatory in nature (ie, they contain advice on what should be done to solve a particular problem).
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shyam : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, the government should deal strictly on hoarders and black marketers”.
Q. Shyam’s statement in the above conversation shows—
- a)What is
- b)What can be
- c)What ought to be
- d)What will be
Correct answer is option 'A'. Can you explain this answer?
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shyam : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, the government should deal strictly on hoarders and black marketers”.
Q. Shyam’s statement in the above conversation shows—
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shyam : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, the government should deal strictly on hoarders and black marketers”.
Q. Shyam’s statement in the above conversation shows—
a)
What is
b)
What can be
c)
What ought to be
d)
What will be
|
|
Saumya Khanna answered |
Hello, how are you doing today?
Sita : I'm doing well, thanks for asking. How about you?
Ram : I'm good too. So, what did you do over the weekend?
Sita : I went to the beach with some friends. It was really fun.
Ram : That sounds great. I haven't been to the beach in a while. Did you swim?
Sita : Yes, we did. The water was a bit cold, but it was still nice to be in the ocean.
Ram : I bet it was. Well, it's good to hear that you had a good time. Maybe we can plan a beach trip together sometime.
Sita : That sounds like a great idea. We should definitely do that.
Sita : I'm doing well, thanks for asking. How about you?
Ram : I'm good too. So, what did you do over the weekend?
Sita : I went to the beach with some friends. It was really fun.
Ram : That sounds great. I haven't been to the beach in a while. Did you swim?
Sita : Yes, we did. The water was a bit cold, but it was still nice to be in the ocean.
Ram : I bet it was. Well, it's good to hear that you had a good time. Maybe we can plan a beach trip together sometime.
Sita : That sounds like a great idea. We should definitely do that.
Both private and public sectors exist side by side in—- a)China
- b)U.S.A.
- c)India
- d)Russia
Correct answer is option 'C'. Can you explain this answer?
Both private and public sectors exist side by side in—
a)
China
b)
U.S.A.
c)
India
d)
Russia
|
|
Freedom Institute answered |
India is a mixed economy. Means of production are owned by both private and public sector. Thus, both private and public sectors exist side by side.
The central problems of an economy arises because of—
- a)Unlimited wants
- b)Scarce resources having alternative uses
- c)Limited wants and unlimited resources
- d)Both (a) and (b)
Correct answer is option 'D'. Can you explain this answer?
The central problems of an economy arises because of—
a)
Unlimited wants
b)
Scarce resources having alternative uses
c)
Limited wants and unlimited resources
d)
Both (a) and (b)
|
|
Nikita Singh answered |
All economic problems arises due to unlimited human wants and limited resources. Moreover, these resources have alternative uses and wants keep on increasing each day. This economic problem is also known as problem of choice or the problem of allocating resources to alternative uses.
Capital intensive technique would be chosen in a
- a)labour surplus economy where the relative price of capital is lower
- b)capital surplus economy where the relative price of capital is lower
- c)developed economy where technology is better
- d)developing economy where technology is poor
Correct answer is option 'B'. Can you explain this answer?
Capital intensive technique would be chosen in a
a)
labour surplus economy where the relative price of capital is lower
b)
capital surplus economy where the relative price of capital is lower
c)
developed economy where technology is better
d)
developing economy where technology is poor
|
|
Ameya Menon answered |
Capital intensive technique refers to a type of production process that requires a significant amount of capital investment in order to produce goods and services. This technique is often used in industries that require large, expensive machinery or equipment, and it is typically associated with high levels of productivity and output.
Option B is the correct answer because capital surplus economies have a lower relative price of capital. This means that the cost of borrowing money or investing in capital is lower in these economies, making it more attractive for firms to invest in capital-intensive techniques. In contrast, labour surplus economies have a higher relative price of capital, which means that the cost of investing in capital is higher and it may be more cost-effective for firms to use more labour-intensive techniques instead.
Other factors that may influence the choice of capital-intensive technique include:
- Technological advancement: In developed economies where technology is better, firms may be more likely to use capital-intensive techniques that take advantage of advanced machinery or automation.
- Availability of resources: In economies with abundant natural resources, such as oil or minerals, firms may be more likely to invest in capital-intensive techniques that can extract these resources more efficiently.
- Government policies: Government policies can also influence the choice of production techniques, such as tax incentives for investing in certain types of capital or regulations that require firms to use more environmentally-friendly techniques.
Option B is the correct answer because capital surplus economies have a lower relative price of capital. This means that the cost of borrowing money or investing in capital is lower in these economies, making it more attractive for firms to invest in capital-intensive techniques. In contrast, labour surplus economies have a higher relative price of capital, which means that the cost of investing in capital is higher and it may be more cost-effective for firms to use more labour-intensive techniques instead.
Other factors that may influence the choice of capital-intensive technique include:
- Technological advancement: In developed economies where technology is better, firms may be more likely to use capital-intensive techniques that take advantage of advanced machinery or automation.
- Availability of resources: In economies with abundant natural resources, such as oil or minerals, firms may be more likely to invest in capital-intensive techniques that can extract these resources more efficiently.
- Government policies: Government policies can also influence the choice of production techniques, such as tax incentives for investing in certain types of capital or regulations that require firms to use more environmentally-friendly techniques.
The central problems relating to allocation of resources -- a)What to produce?
- b)How to produce?
- c)For whom to produce?
- d)All the above.
Correct answer is option 'D'. Can you explain this answer?
The central problems relating to allocation of resources -
a)
What to produce?
b)
How to produce?
c)
For whom to produce?
d)
All the above.
|
|
Hrishikesh Mukherjee answered |
The problem of choice or the problem relating to allocation of resources deals with 3 aspects:
1) What to produce - Resources are to be used for producing what goods and services.
2) How to produce - What methods are to be used for the production.
3) For whom to produce - Who will utilize the goods and services.
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows normative side of economics- a)Shyam
- b)Raghu
- c)Bhola
- d)Both (b) and (c)
Correct answer is option 'D'. Can you explain this answer?
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows normative side of economics
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows normative side of economics
a)
Shyam
b)
Raghu
c)
Bhola
d)
Both (b) and (c)
|
|
Arka Kaur answered |
Hello, how are you doing today?
Shyam: I'm doing pretty well, thanks for asking. How about you?
Ram: I'm doing well too, thanks. So, what have you been up to lately?
Shyam: Not much, just been busy with work. You?
Ram: Same here, work has been keeping me busy. But I did manage to catch up on some movies over the weekend.
Shyam: Oh, that's nice. What did you watch?
Ram: I watched a couple of old classics - The Godfather and Casablanca.
Shyam: Oh, those are some great movies. I haven't seen them in a while. Maybe I should re-watch them too.
Ram: Yeah, you should. They're timeless classics that never get old.
Shyam: I'm doing pretty well, thanks for asking. How about you?
Ram: I'm doing well too, thanks. So, what have you been up to lately?
Shyam: Not much, just been busy with work. You?
Ram: Same here, work has been keeping me busy. But I did manage to catch up on some movies over the weekend.
Shyam: Oh, that's nice. What did you watch?
Ram: I watched a couple of old classics - The Godfather and Casablanca.
Shyam: Oh, those are some great movies. I haven't seen them in a while. Maybe I should re-watch them too.
Ram: Yeah, you should. They're timeless classics that never get old.
“During the boom periods when aggregate demand, national income and prices are high, entrepreneurs tend to make high profits”. This statement shows—- a)Effect of micro-economic variables on macro variables
- b)Effect of macro-economic variables on micro variables
- c)Inter-dependence of micro and macro-economics
- d)Both (b) and (c)
Correct answer is option 'D'. Can you explain this answer?
“During the boom periods when aggregate demand, national income and prices are high, entrepreneurs tend to make high profits”. This statement shows—
a)
Effect of micro-economic variables on macro variables
b)
Effect of macro-economic variables on micro variables
c)
Inter-dependence of micro and macro-economics
d)
Both (b) and (c)
|
|
Ishan Goyal answered |
I am designed to provide information and assistance based on the input given to me. Is there anything specific you would like me to help you with?
Normative economics is in nature- a)modern
- b)descriptive
- c)prescriptive
- d)none of the above
Correct answer is option 'C'. Can you explain this answer?
Normative economics is in nature
a)
modern
b)
descriptive
c)
prescriptive
d)
none of the above
|
|
Stuti Desai answered |
Normative Economics is Prescriptive
Normative economics is a branch of economics that deals with value judgments and opinions about what the economy should be like or what ought to be done to improve it. It is concerned with the formulation of normative statements or prescriptions, which are statements about what should or ought to be done.
Prescriptive Nature of Normative Economics
Normative economics is prescriptive in nature because it prescribes policies or actions that should be taken to achieve desired goals. It is concerned with what should be done, rather than what is or what has been done. Normative economics is based on subjective judgments and opinions about what is good or desirable.
Normative economics is concerned with analyzing economic policies or actions in terms of their desirability or usefulness. It seeks to provide guidance to policymakers, governments, and individuals on how to achieve economic goals that are considered desirable or optimal.
Normative economics involves the use of value judgments, which are subjective opinions about what is good or desirable. These value judgments are based on ethical, moral, or political considerations, and they reflect the preferences of individuals and society.
Examples of Normative Statements
Examples of normative statements include:
- The government should increase spending on education and healthcare.
- The minimum wage should be increased to reduce poverty.
- The tax system should be reformed to make it more progressive.
- The government should provide subsidies to renewable energy sources to reduce carbon emissions.
Conclusion
Normative economics is prescriptive in nature because it prescribes policies or actions that should be taken to achieve desired goals. It is concerned with value judgments and opinions about what the economy should be like or what ought to be done to improve it. Normative economics seeks to provide guidance to policymakers, governments, and individuals on how to achieve economic goals that are considered desirable or optimal.
Normative economics is a branch of economics that deals with value judgments and opinions about what the economy should be like or what ought to be done to improve it. It is concerned with the formulation of normative statements or prescriptions, which are statements about what should or ought to be done.
Prescriptive Nature of Normative Economics
Normative economics is prescriptive in nature because it prescribes policies or actions that should be taken to achieve desired goals. It is concerned with what should be done, rather than what is or what has been done. Normative economics is based on subjective judgments and opinions about what is good or desirable.
Normative economics is concerned with analyzing economic policies or actions in terms of their desirability or usefulness. It seeks to provide guidance to policymakers, governments, and individuals on how to achieve economic goals that are considered desirable or optimal.
Normative economics involves the use of value judgments, which are subjective opinions about what is good or desirable. These value judgments are based on ethical, moral, or political considerations, and they reflect the preferences of individuals and society.
Examples of Normative Statements
Examples of normative statements include:
- The government should increase spending on education and healthcare.
- The minimum wage should be increased to reduce poverty.
- The tax system should be reformed to make it more progressive.
- The government should provide subsidies to renewable energy sources to reduce carbon emissions.
Conclusion
Normative economics is prescriptive in nature because it prescribes policies or actions that should be taken to achieve desired goals. It is concerned with value judgments and opinions about what the economy should be like or what ought to be done to improve it. Normative economics seeks to provide guidance to policymakers, governments, and individuals on how to achieve economic goals that are considered desirable or optimal.
As compared to other economic systems, inequalities of incomes is relatively less in economic system
- a)Capitalist
- b)Socialist
- c)Mixed
- d)None of the above
Correct answer is option 'B'. Can you explain this answer?
As compared to other economic systems, inequalities of incomes is relatively less in economic system
a)
Capitalist
b)
Socialist
c)
Mixed
d)
None of the above
|
|
Deepika Nambiar answered |
Inequalities of incomes in Economic Systems
Inequalities of income refer to the unequal distribution of income among individuals in a society. Economic systems differ in the degree of income inequality they allow.
Capitalist Economic System
Under the capitalist economic system, income inequality is relatively high. This is because the system is based on the principles of competition and profit maximization, which can result in some individuals accumulating vast amounts of wealth while others struggle to make ends meet. The capitalist system rewards those who are able to work harder or smarter than others or who are lucky enough to have access to resources that are in high demand.
Mixed Economic System
In a mixed economic system, income inequality can vary depending on the specific policies and regulations in place. The degree of income inequality can be reduced by implementing policies such as progressive taxation, social welfare programs, and minimum wage laws. However, in mixed economic systems, the distribution of income is still likely to be unequal, as some individuals will always have more skills, abilities, and resources than others.
Socialist Economic System
The socialist economic system is based on the principle of economic equality, and income inequality is relatively low. In a socialist system, the means of production are owned and controlled by the state or the community, and everyone is entitled to a share of the wealth generated by the economy. This means that income is distributed more evenly, and there is less of a gap between the rich and the poor.
Conclusion
In conclusion, the correct answer is option 'B': socialist economic system. This is because the socialist system is based on the principle of economic equality, and income inequality is relatively low.
Inequalities of income refer to the unequal distribution of income among individuals in a society. Economic systems differ in the degree of income inequality they allow.
Capitalist Economic System
Under the capitalist economic system, income inequality is relatively high. This is because the system is based on the principles of competition and profit maximization, which can result in some individuals accumulating vast amounts of wealth while others struggle to make ends meet. The capitalist system rewards those who are able to work harder or smarter than others or who are lucky enough to have access to resources that are in high demand.
Mixed Economic System
In a mixed economic system, income inequality can vary depending on the specific policies and regulations in place. The degree of income inequality can be reduced by implementing policies such as progressive taxation, social welfare programs, and minimum wage laws. However, in mixed economic systems, the distribution of income is still likely to be unequal, as some individuals will always have more skills, abilities, and resources than others.
Socialist Economic System
The socialist economic system is based on the principle of economic equality, and income inequality is relatively low. In a socialist system, the means of production are owned and controlled by the state or the community, and everyone is entitled to a share of the wealth generated by the economy. This means that income is distributed more evenly, and there is less of a gap between the rich and the poor.
Conclusion
In conclusion, the correct answer is option 'B': socialist economic system. This is because the socialist system is based on the principle of economic equality, and income inequality is relatively low.
Study of the problem of poverty denotes that economics is—- a)a science
- b)an art
- c)both a science and an art
- d)neither a science nor an art
Correct answer is option 'A'. Can you explain this answer?
Study of the problem of poverty denotes that economics is—
a)
a science
b)
an art
c)
both a science and an art
d)
neither a science nor an art
|
|
Vaishnavi Gupta answered |
A key factor in the issue of poverty. Poverty is often defined as a lack of income or resources to meet basic needs, such as food, housing, and healthcare. In this sense, poverty is a result of economic factors such as low wages, unemployment, and underemployment.
Economics also plays a role in the distribution of resources and wealth in society, which can contribute to the persistence of poverty. For example, if resources and wealth are concentrated in the hands of a few wealthy individuals or corporations, it can limit the opportunities and resources available to those living in poverty.
Additionally, economic policies and systems can either help or hinder efforts to reduce poverty. For example, policies that support job creation, education, and social safety nets can help to reduce poverty. On the other hand, policies that prioritize the interests of the wealthy or do not address the root causes of poverty can exacerbate the problem.
Overall, the study of poverty requires an understanding of economics and the structural factors that contribute to poverty, as well as the policies and interventions that can help to address it.
Economics also plays a role in the distribution of resources and wealth in society, which can contribute to the persistence of poverty. For example, if resources and wealth are concentrated in the hands of a few wealthy individuals or corporations, it can limit the opportunities and resources available to those living in poverty.
Additionally, economic policies and systems can either help or hinder efforts to reduce poverty. For example, policies that support job creation, education, and social safety nets can help to reduce poverty. On the other hand, policies that prioritize the interests of the wealthy or do not address the root causes of poverty can exacerbate the problem.
Overall, the study of poverty requires an understanding of economics and the structural factors that contribute to poverty, as well as the policies and interventions that can help to address it.
Social insurance, sickness benefits, old age pension, etc are some social benefits provided by—- a)State in capitalist economy
- b)State in socialist economy
- c)State in mixed economy
- d)Both (b) and (c)
Correct answer is option 'D'. Can you explain this answer?
Social insurance, sickness benefits, old age pension, etc are some social benefits provided by—
a)
State in capitalist economy
b)
State in socialist economy
c)
State in mixed economy
d)
Both (b) and (c)
|
|
Mehul Saini answered |
The government to its citizens. These benefits are intended to ensure that all citizens have access to basic necessities of life, such as healthcare, financial support, and security in old age. Social insurance programs are typically funded through taxes and are designed to provide a safety net for those who need it most. Sickness benefits are designed to provide financial assistance to those who are unable to work due to illness or injury, while old age pension programs are intended to provide financial support to those who have retired from the workforce. Other social benefits may include unemployment benefits, disability benefits, and housing assistance programs. Overall, social benefits are an important component of any welfare state and are intended to promote social justice and improve the quality of life for all citizens.
Micro economics covers the study of—
(i) Consumer’s behaviour
(ii) Producer’s equilibrium
(iii) Fiscal system of an economy
(iv) Factor pricing- a)i and iii
- b)ii and iv
- c)i, ii and iii
- d)i, ii and iv
Correct answer is option 'D'. Can you explain this answer?
Micro economics covers the study of—
(i) Consumer’s behaviour
(ii) Producer’s equilibrium
(iii) Fiscal system of an economy
(iv) Factor pricing
(i) Consumer’s behaviour
(ii) Producer’s equilibrium
(iii) Fiscal system of an economy
(iv) Factor pricing
a)
i and iii
b)
ii and iv
c)
i, ii and iii
d)
i, ii and iv
|
|
Deepika Desai answered |
Micro economics deals with the individual approach of various parties involved in an economy, i.e, consumer, producer, price, and cost. Therefore, it studies consumer's behaviour, producer's equilibrium, and factor pricing.
Which of the following is not the feature of socialist economy ?- a)Economic planning
- b)Social welfare
- c)Private ownership of productive resources
- d)Economic equalities
Correct answer is option 'C'. Can you explain this answer?
Which of the following is not the feature of socialist economy ?
a)
Economic planning
b)
Social welfare
c)
Private ownership of productive resources
d)
Economic equalities
|
|
Sanjana Khanna answered |
Socialist economy is an economic system in which the means of production and distribution are owned and controlled by the state or by the community as a whole. The main features of socialist economy are:
Economic planning: In a socialist economy, the state or the central planning agency decides what to produce, how much to produce, and at what price to sell. The resources are allocated according to the needs of the society rather than the profit motive.
Social welfare: The socialist economy aims to provide social welfare to all the citizens. It provides free education, healthcare, housing, and other basic amenities to the people.
Economic equalities: In a socialist economy, the income and wealth are distributed equally among the citizens. There is no concept of private ownership of property, and the resources are shared among the people.
However, the feature that is not a part of socialist economy is:
Private ownership of productive resources: In a socialist economy, the means of production and distribution are owned and controlled by the state or by the community as a whole. There is no concept of private ownership of property.
Therefore, option (c) is the correct answer.
Economic planning: In a socialist economy, the state or the central planning agency decides what to produce, how much to produce, and at what price to sell. The resources are allocated according to the needs of the society rather than the profit motive.
Social welfare: The socialist economy aims to provide social welfare to all the citizens. It provides free education, healthcare, housing, and other basic amenities to the people.
Economic equalities: In a socialist economy, the income and wealth are distributed equally among the citizens. There is no concept of private ownership of property, and the resources are shared among the people.
However, the feature that is not a part of socialist economy is:
Private ownership of productive resources: In a socialist economy, the means of production and distribution are owned and controlled by the state or by the community as a whole. There is no concept of private ownership of property.
Therefore, option (c) is the correct answer.
_____ economics explains cause and effect relationship between economic phenomena- a)Positive
- b)Normative
- c)Empirical
- d)Applied
Correct answer is option 'A'. Can you explain this answer?
_____ economics explains cause and effect relationship between economic phenomena
a)
Positive
b)
Normative
c)
Empirical
d)
Applied
|
|
Meera Basak answered |
Positive Economics
Positive economics is a branch of economics that is concerned with the cause-and-effect relationship between economic phenomena. It involves the study of economic facts, theories, and data with the aim of establishing objective and verifiable statements about economic phenomena. Positive economics is descriptive in nature and seeks to explain what is, rather than what ought to be.
Features of Positive Economics
1. Objective: Positive economics is objective as it is based on data and facts that can be tested and verified.
2. Descriptive: It describes what is happening in the economy and is not concerned with normative judgments or opinions about what should be happening.
3. Scientific: Positive economics uses the scientific method and relies on empirical evidence to test economic theories and hypotheses.
4. Predictive: Positive economics seeks to make predictions about future economic events based on past and current trends.
Examples of Positive Economics
1. The law of supply and demand: This is a positive economic theory that explains how the price of a good or service is determined by the interaction of supply and demand.
2. The theory of comparative advantage: This is a positive economic theory that explains why countries specialize in producing certain goods and services and trade with each other.
3. The Phillips curve: This is a positive economic theory that explains the relationship between unemployment and inflation.
Conclusion
Positive economics is an important branch of economics that helps us to understand the cause-and-effect relationship between economic phenomena. It is based on empirical evidence and seeks to establish objective and verifiable statements about the economy. By studying positive economics, we can make better-informed decisions and policies that are grounded in fact and evidence.
Positive economics is a branch of economics that is concerned with the cause-and-effect relationship between economic phenomena. It involves the study of economic facts, theories, and data with the aim of establishing objective and verifiable statements about economic phenomena. Positive economics is descriptive in nature and seeks to explain what is, rather than what ought to be.
Features of Positive Economics
1. Objective: Positive economics is objective as it is based on data and facts that can be tested and verified.
2. Descriptive: It describes what is happening in the economy and is not concerned with normative judgments or opinions about what should be happening.
3. Scientific: Positive economics uses the scientific method and relies on empirical evidence to test economic theories and hypotheses.
4. Predictive: Positive economics seeks to make predictions about future economic events based on past and current trends.
Examples of Positive Economics
1. The law of supply and demand: This is a positive economic theory that explains how the price of a good or service is determined by the interaction of supply and demand.
2. The theory of comparative advantage: This is a positive economic theory that explains why countries specialize in producing certain goods and services and trade with each other.
3. The Phillips curve: This is a positive economic theory that explains the relationship between unemployment and inflation.
Conclusion
Positive economics is an important branch of economics that helps us to understand the cause-and-effect relationship between economic phenomena. It is based on empirical evidence and seeks to establish objective and verifiable statements about the economy. By studying positive economics, we can make better-informed decisions and policies that are grounded in fact and evidence.
Consumers and produces make their choices based on the market forces of demand and supply in—- a)Socialist (Command) Economy
- b)Mixed Economy
- c)Capitalist Economy
- d)Closed Economy
Correct answer is option 'C'. Can you explain this answer?
Consumers and produces make their choices based on the market forces of demand and supply in—
a)
Socialist (Command) Economy
b)
Mixed Economy
c)
Capitalist Economy
d)
Closed Economy
|
|
Niharika Chavan answered |
Consumers and producers make their choices based on the market forces of demand and supply in Capitalist economy. Capitalist economy is also called the market economy in which the prices are determined by the free interaction of the forces of demand and supply. It is an automatic self-regulating mechanism which runs with the motive of profit.
A dual system of pricing exists in—- a)Capitalist economy
- b)Socialist economy
- c)Mixed economy
- d)None of these
Correct answer is option 'C'. Can you explain this answer?
A dual system of pricing exists in—
a)
Capitalist economy
b)
Socialist economy
c)
Mixed economy
d)
None of these
|
|
Anu Sen answered |
Many markets, where different prices are charged for the same product or service based on different criteria. For example, in the airline industry, different prices are charged for the same flight ticket based on factors such as time of booking, time of travel, class of travel, and availability. Similarly, in the healthcare industry, different prices are charged for the same medical procedure based on factors such as insurance coverage, hospital affiliation, and location. Dual pricing systems can be beneficial for companies to maximize profits and cater to different customer segments, but they can also be controversial and lead to accusations of discrimination or unfairness.
Positive economics concerns .- a)what should be
- b)what is
- c)both (a) and (b)
- d)what ought to be
Correct answer is option 'B'. Can you explain this answer?
Positive economics concerns .
a)
what should be
b)
what is
c)
both (a) and (b)
d)
what ought to be
|
|
Rishika Kumar answered |
Explanation:
Positive economics is concerned with the study of what is. It focuses on the objective analysis of economic data and facts. Positive economics is based on scientific methods and involves the use of empirical evidence to test economic theories and hypotheses. Positive economics is also known as descriptive economics.
Positive economics is concerned with answering questions such as:
- What are the causes of inflation?
- How does a change in interest rates affect economic growth?
- What is the impact of a tax on consumer behavior?
Positive economics is an important tool for policymakers, as it provides them with objective data and information that they can use to make informed decisions. For example, if policymakers want to know the effects of a particular policy on the economy, they can use positive economics to analyze the data and determine the likely outcomes of the policy.
In contrast, normative economics is concerned with what ought to be. Normative economics involves making value judgments and evaluating economic policies based on moral, ethical, and political considerations. Normative economics is subjective and depends on individual opinions and beliefs.
Positive economics is important because it enables us to understand how the economy works. By analyzing economic data and trends, we can gain insights into economic behavior and make predictions about future economic outcomes. This knowledge can be used to inform policy decisions and improve economic outcomes for individuals and society as a whole.
Positive economics is concerned with the study of what is. It focuses on the objective analysis of economic data and facts. Positive economics is based on scientific methods and involves the use of empirical evidence to test economic theories and hypotheses. Positive economics is also known as descriptive economics.
Positive economics is concerned with answering questions such as:
- What are the causes of inflation?
- How does a change in interest rates affect economic growth?
- What is the impact of a tax on consumer behavior?
Positive economics is an important tool for policymakers, as it provides them with objective data and information that they can use to make informed decisions. For example, if policymakers want to know the effects of a particular policy on the economy, they can use positive economics to analyze the data and determine the likely outcomes of the policy.
In contrast, normative economics is concerned with what ought to be. Normative economics involves making value judgments and evaluating economic policies based on moral, ethical, and political considerations. Normative economics is subjective and depends on individual opinions and beliefs.
Positive economics is important because it enables us to understand how the economy works. By analyzing economic data and trends, we can gain insights into economic behavior and make predictions about future economic outcomes. This knowledge can be used to inform policy decisions and improve economic outcomes for individuals and society as a whole.
‘A government deficit will reduce unemployment and cause an increase in prices.’ This statement is—- a)Positive
- b)Normative
- c)Incomplete
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
‘A government deficit will reduce unemployment and cause an increase in prices.’ This statement is—
a)
Positive
b)
Normative
c)
Incomplete
d)
None of these
|
|
Mehul Ghoshal answered |
However, I am designed to provide helpful and informative responses to your questions and queries. Is there anything specific you need help with?
One of the important features of capitalist economy is—- a)Economic planning
- b)Price mechanism
- c)Economic equalities
- d)Social welfare
Correct answer is option 'B'. Can you explain this answer?
One of the important features of capitalist economy is—
a)
Economic planning
b)
Price mechanism
c)
Economic equalities
d)
Social welfare
|
|
Nitin Kumar answered |
The private ownership of the means of production and the pursuit of profit as the primary motivation for economic activity. This means that individuals and businesses are free to own and use property, invest capital, and trade goods and services in a competitive market. This competition drives innovation, efficiency, and growth, as businesses seek to satisfy consumer demand and maximize profits. Additionally, the freedom to own and accumulate wealth creates incentives for individuals to work hard, take risks, and innovate, leading to increased productivity and economic prosperity. However, critics argue that capitalism can also lead to income inequality, exploitation of workers, and environmental degradation, and that government regulation and intervention may be necessary to address these issues.
Framing suitable policies to solve inequalities of income denotes that economics is—- a)a science
- b)an art
- c)both a science and an art
- d)neither science nor an art
Correct answer is option 'B'. Can you explain this answer?
Framing suitable policies to solve inequalities of income denotes that economics is—
a)
a science
b)
an art
c)
both a science and an art
d)
neither science nor an art
|
|
Ipsita Rane answered |
A social science that recognizes the importance of equity and justice in economic systems. It acknowledges that the distribution of income and wealth is not just a matter of economic efficiency, but also a matter of social justice, human dignity, and political stability. Therefore, economics should aim to develop policies that address the root causes of inequality and promote inclusive growth, rather than simply relying on market mechanisms to allocate resources. This requires a holistic approach that considers the interplay of economic, social, and political factors, and involves a collective effort from all stakeholders to work towards a fairer and more just society.
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows positive aspect of Economics?- a)Ram
- b)Shyam
- c)Both (a) and (b)
- d)Bhola
Correct answer is option 'C'. Can you explain this answer?
Based on the following conversation
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows positive aspect of Economics?
Ram : “Rise in prices of goods have made it difficult to make two ends meet”
Shy am : “Yes, the cost of cultivation too has increased very much”.
Raghu : “Government should take steps to curb the price rise and provide relief to common man”.
Bhola : “Yes, he government should deal strictly on hoarders and black marketers”.
Q. In the above conversation whose statements shows positive aspect of Economics?
a)
Ram
b)
Shyam
c)
Both (a) and (b)
d)
Bhola
|
|
Moumita Bajaj answered |
Hey, did you hear about the new restaurant that just opened up?
Shyam: No, I haven't. What's it called?
Ram: It's called "The Green Garden". They serve organic food and have a really cool ambiance.
Shyam: That sounds interesting. Have you been there?
Ram: Yeah, I went there last night with some friends. The food was amazing and the service was great too.
Shyam: I'll have to check it out sometime. Thanks for letting me know.
Shyam: No, I haven't. What's it called?
Ram: It's called "The Green Garden". They serve organic food and have a really cool ambiance.
Shyam: That sounds interesting. Have you been there?
Ram: Yeah, I went there last night with some friends. The food was amazing and the service was great too.
Shyam: I'll have to check it out sometime. Thanks for letting me know.
Economics is an art as—- a)it teaches us to do
- b)it provides practical solutions to various economic problems.
- c)it is practice of knowledge
- d)all the above
Correct answer is option 'D'. Can you explain this answer?
Economics is an art as—
a)
it teaches us to do
b)
it provides practical solutions to various economic problems.
c)
it is practice of knowledge
d)
all the above
|
|
Meera Basak answered |
Well as a science. It involves the study of how individuals, businesses, and governments make decisions about how to allocate resources to meet their needs and wants. Economics utilizes mathematical and statistical models to analyze data and make predictions about future economic trends. However, it also involves a degree of subjectivity and interpretation, as different economists may have different opinions on the best way to approach economic problems. Therefore, economics can be considered both a science and an art, as it requires both technical expertise and creative thinking.
Business Economics is generally in nature.- a)normative
- b)positive
- c)neutral
- d)descriptive
Correct answer is option 'A'. Can you explain this answer?
Business Economics is generally in nature.
a)
normative
b)
positive
c)
neutral
d)
descriptive
|
|
Sonal Patel answered |
Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment.
Which of the following is not correct about capitalistic system—- a)Too much of waste due to cut throat competition
- b)There is right of private property.
- c)Conditions are not favourable for equitable distribution of wealth.
- d)There is central planning authority.
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not correct about capitalistic system—
a)
Too much of waste due to cut throat competition
b)
There is right of private property.
c)
Conditions are not favourable for equitable distribution of wealth.
d)
There is central planning authority.
|
|
Maheshwar Goyal answered |
One common criticism of capitalism is that it can lead to income inequality, which can result in social and economic problems. Another criticism is that capitalism can promote short-term thinking and a focus on profits over other important considerations, such as environmental protection or social welfare. However, these criticisms are subjective and debatable. It is up to individuals to form their own opinions about the strengths and weaknesses of capitalism as a system.
The problem of ‘What to produce’ relates to—- a)The production of goods
- b)The technique of production to produce good.
- c)The distribution of produced goods and services.
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
The problem of ‘What to produce’ relates to—
a)
The production of goods
b)
The technique of production to produce good.
c)
The distribution of produced goods and services.
d)
None of these
|
|
Rajveer Jain answered |
The problem of 'what to produce' deals with the production of necessary goods that have demand in the economy which can be evenly distributed so that social as well as economic stability is maintained in the economy.
Price-mechanism is an important feature of –
(i) Market economy
(ii) Regulated economy
(iii) Mixed economy
(iv) Capitalist economy- a)i and ii only
- b)iii and iv only
- c)i and iv only
- d)i and iii only
Correct answer is option 'D'. Can you explain this answer?
Price-mechanism is an important feature of –
(i) Market economy
(ii) Regulated economy
(iii) Mixed economy
(iv) Capitalist economy
(i) Market economy
(ii) Regulated economy
(iii) Mixed economy
(iv) Capitalist economy
a)
i and ii only
b)
iii and iv only
c)
i and iv only
d)
i and iii only
|
|
Stuti Desai answered |
Understanding Price Mechanism
The price mechanism is a fundamental concept in economics, particularly in market-oriented systems. It refers to the way prices are determined through supply and demand dynamics, influencing resource allocation.
Market Economy
- In a market economy, prices are set based on consumer preferences and resource availability.
- The forces of supply and demand interact freely, allowing prices to fluctuate.
- This mechanism efficiently allocates resources without central planning.
Capitalist Economy
- A capitalist economy is characterized by private ownership and profit-driven enterprises.
- The price mechanism plays a crucial role in guiding businesses on what to produce based on consumer demand.
- It facilitates competition, leading to innovation and improved goods and services.
Regulated Economy
- In a regulated economy, government intervention limits the price mechanism.
- Price controls may be implemented to stabilize the economy or protect consumers.
- Therefore, the price mechanism is not a defining feature in such economies.
Mixed Economy
- A mixed economy combines elements of both market and regulated economies.
- While the price mechanism operates in many sectors, government intervention in key areas can distort price signals.
- Thus, the price mechanism is present but not as dominant as in purely market or capitalist economies.
Conclusion
Given this understanding, the correct answer is option 'D' - the price mechanism is a critical feature of both market economies and capitalist economies, as they primarily rely on free market forces for pricing. In contrast, regulated and mixed economies incorporate elements of government control, which can disrupt the price mechanism's efficacy.
The price mechanism is a fundamental concept in economics, particularly in market-oriented systems. It refers to the way prices are determined through supply and demand dynamics, influencing resource allocation.
Market Economy
- In a market economy, prices are set based on consumer preferences and resource availability.
- The forces of supply and demand interact freely, allowing prices to fluctuate.
- This mechanism efficiently allocates resources without central planning.
Capitalist Economy
- A capitalist economy is characterized by private ownership and profit-driven enterprises.
- The price mechanism plays a crucial role in guiding businesses on what to produce based on consumer demand.
- It facilitates competition, leading to innovation and improved goods and services.
Regulated Economy
- In a regulated economy, government intervention limits the price mechanism.
- Price controls may be implemented to stabilize the economy or protect consumers.
- Therefore, the price mechanism is not a defining feature in such economies.
Mixed Economy
- A mixed economy combines elements of both market and regulated economies.
- While the price mechanism operates in many sectors, government intervention in key areas can distort price signals.
- Thus, the price mechanism is present but not as dominant as in purely market or capitalist economies.
Conclusion
Given this understanding, the correct answer is option 'D' - the price mechanism is a critical feature of both market economies and capitalist economies, as they primarily rely on free market forces for pricing. In contrast, regulated and mixed economies incorporate elements of government control, which can disrupt the price mechanism's efficacy.
In a capitalistic economy what to produce depends on—- a)governments is policy
- b)consumer’s preference
- c)profits of firm
- d)none of these
Correct answer is option 'B'. Can you explain this answer?
In a capitalistic economy what to produce depends on—
a)
governments is policy
b)
consumer’s preference
c)
profits of firm
d)
none of these
|
|
Mehul Saini answered |
The demands and preferences of consumers. Producers will produce goods and services that they believe will be profitable and in high demand. The market will determine the price of these goods and services based on supply and demand. Therefore, what to produce in a capitalistic economy is primarily determined by consumer demand and the profit potential of the product or service.
Study of unemployment problem and then framing suitable policies to reduce the extent of unemployment shows that economics is—
(i) Both a science and an art
(ii) Neither a science nor an art
(iii) Positive science
(iv) Normative science- a)i and iii only
- b)ii and iv only
- c)i, iii and iv
- d)ii, iii and iv
Correct answer is option 'C'. Can you explain this answer?
Study of unemployment problem and then framing suitable policies to reduce the extent of unemployment shows that economics is—
(i) Both a science and an art
(ii) Neither a science nor an art
(iii) Positive science
(iv) Normative science
(i) Both a science and an art
(ii) Neither a science nor an art
(iii) Positive science
(iv) Normative science
a)
i and iii only
b)
ii and iv only
c)
i, iii and iv
d)
ii, iii and iv
|
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Ipsita Rane answered |
Study of unemployment problem and then framing suitable policies to reduce the extent of unemployment shows that economics is a science, art and positive and normative in nature.
Study of unemployment is based on study of facts and data, this makes it a positive science. Framing suitable policies for the same is art as it is the practical application of knowledge and it is also a normative science as it suggests measure to make the situation desirable.
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