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Test: Introduction To Economics - 5 - SSC CGL MCQ


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25 Questions MCQ Test SSC CGL Tier 2 - Study Material, Online Tests, Previous Year - Test: Introduction To Economics - 5

Test: Introduction To Economics - 5 for SSC CGL 2024 is part of SSC CGL Tier 2 - Study Material, Online Tests, Previous Year preparation. The Test: Introduction To Economics - 5 questions and answers have been prepared according to the SSC CGL exam syllabus.The Test: Introduction To Economics - 5 MCQs are made for SSC CGL 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Introduction To Economics - 5 below.
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Test: Introduction To Economics - 5 - Question 1

The basic economic activities put in order are

Detailed Solution for Test: Introduction To Economics - 5 - Question 1

Production, consumption and capital formation are called the basic economic activities of an economy. Scarce resources are used in the production of goods and services with the objective of satisfying our needs and wants.

Test: Introduction To Economics - 5 - Question 2

A PPC can shift its position if and only if

Detailed Solution for Test: Introduction To Economics - 5 - Question 2

The most common reason a PPF would shift is because of a change in technology, or because of economic growth.

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Test: Introduction To Economics - 5 - Question 3

Do you agree that the PPC indicates maximum production capacity of an economy

Detailed Solution for Test: Introduction To Economics - 5 - Question 3

The production possibility curve shows the maximum output combination of two goods and services that an economy can produce with all resources fully employed.

Test: Introduction To Economics - 5 - Question 4

Can a PPC rotate along the X axis also

Detailed Solution for Test: Introduction To Economics - 5 - Question 4

When there is improve in technology of X commodity it will rotate to right and if there is degradation in technology of X it will rotate left, here we assume that technolgy of Y remains constant.

Test: Introduction To Economics - 5 - Question 5

The shape of an ideal PPC is due to which of the following

Detailed Solution for Test: Introduction To Economics - 5 - Question 5

Marginal opportunity cost is defined as the amount of one good that needs to be given up in order to increase the production of the other good by one unit. It is calculated as Units of good one sacrificed/ units of the other good obtained.

Test: Introduction To Economics - 5 - Question 6

A PPC can be a straight line due to which of the following

Detailed Solution for Test: Introduction To Economics - 5 - Question 6

A PPC curve can be a straight line only if the marginal rate of transformation is constant throughout the curve. A MRT can remain constant only if both the commodities are equally constant and marginal utility derived from their production is also constant.

Test: Introduction To Economics - 5 - Question 7

PPC is a mathematical tool for an economy to solve:

Detailed Solution for Test: Introduction To Economics - 5 - Question 7

Factors such as labor, capital and technology, among others, will affect the resources available, which will dictate where the production possibility frontier lies. The PPF is also known as the production possibility curve or the transformation curve.

Test: Introduction To Economics - 5 - Question 8

The perspective of positive economic analysis to study the economic mechanisms is

Detailed Solution for Test: Introduction To Economics - 5 - Question 8

Positive economics is the study of economics based on objective analysis. Most economists today focus on positive economic analysis, which uses what is and what has been occurring in an economy as the basis for any statement about the future.

Test: Introduction To Economics - 5 - Question 9

The perspective of normative economic analysis to study the economic mechanisms is

Detailed Solution for Test: Introduction To Economics - 5 - Question 9

Normative economics is a perspective on economics that reflects normative judgments or opinionated reactions toward economic projects, statements, and scenarios. Unlike positive economics, normative economics heavily concerns itself with value judgments and theoretical scenarios and economic statements that present "what ought to be" rather than facts and cause-and-effect statements.

Test: Introduction To Economics - 5 - Question 10

The Marginal opportunity cost of producing Good X is

Detailed Solution for Test: Introduction To Economics - 5 - Question 10

Marginal opportunity cost is an economic term that analyzes the effect of producing additional units of a product on the costs of a business, as well as the opportunities the companies give up to produce more of a product.

Test: Introduction To Economics - 5 - Question 11

If an economy was producing 10 billion tonnes of steel and 3 billion tonnes of wheat. What will be the opportunity cost of producing wheat if it was producing 15 tonnes of steel and 2 billion tonnes of wheat?

Detailed Solution for Test: Introduction To Economics - 5 - Question 11

Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. Stated differently, an opportunity cost represents an alternative given up when a decision is made. This cost is, therefore, most relevant for two mutually exclusive events.

Test: Introduction To Economics - 5 - Question 12

Marginal Rate of Transformation: The rate at which one good must be sacrificed in order to produce a single extra unit (or marginal unit) of ..........

Detailed Solution for Test: Introduction To Economics - 5 - Question 12

The marginal rate of transformation can be defined as how many units of good x have to stop being produced in order to produce an extra unit of good y, while keeping constant the use of production factors and the technology being used.

Test: Introduction To Economics - 5 - Question 13

If MOC increases, the shape of PPC will be

Detailed Solution for Test: Introduction To Economics - 5 - Question 13

MOC refers to the number of units of a commodity sacrificed to gain one additional unit of another commodity. In case of PPF, MOC is always increasing, i.e. more and more units of a commodity have to be sacrificed to gain an additional unit of another commodity.PPF is concave shaped because of increasing marginal opportunity costs, i.e. more and more units of one commodity are sacrificed to gain an additional unit of another commodity.

Test: Introduction To Economics - 5 - Question 14

If MOC decreases, the shape of PPC will be

Detailed Solution for Test: Introduction To Economics - 5 - Question 14

PC can be convex to origin if MOC is decreasing, i.e. less and less unites of a commodity are sacrificed for gain of one additional unit.

Test: Introduction To Economics - 5 - Question 15

If MOC is constant, the shape of PPC will be

Detailed Solution for Test: Introduction To Economics - 5 - Question 15

The slope of the curve at any point represents the ratio of the marginal opportunity costs of the two commodities. That is, the marginal opportunity cost of an extra unit of one commodity is the necessary reduction in the output of the other.

Test: Introduction To Economics - 5 - Question 16

The problem of growth in an economy means

Detailed Solution for Test: Introduction To Economics - 5 - Question 16

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. The "rate of economic growth" refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time.

Test: Introduction To Economics - 5 - Question 17

Improvement in technology shifts PPC to the right because

Detailed Solution for Test: Introduction To Economics - 5 - Question 17

The most common reason a PPF would shift is because of a change in technology, or because of economic growth. Everything else held constant more goods can be produced after the technological change.  

Test: Introduction To Economics - 5 - Question 18

A correct example of growth of resources is

Detailed Solution for Test: Introduction To Economics - 5 - Question 18

Economic growth is an increase in what an economy can produce if it is using all its scarce resources. An increase in an economy's productive potential can be shown by an outward shift in the economy's production possibility frontier.

Test: Introduction To Economics - 5 - Question 19

If many people die due to an earthquake, it will shift the country’s PPC to the

Detailed Solution for Test: Introduction To Economics - 5 - Question 19

Severe earthquake in a country leads to decline in both human as well as capital resources. As a result of which less resources are left for producing the goods. Thus decline in resources will lead to a leftward shift in the PPC.

Test: Introduction To Economics - 5 - Question 20

If many people die due to a flood, it will shift the country’s PPC to the

Detailed Solution for Test: Introduction To Economics - 5 - Question 20

Severe flood leads to a decline in both human as well as capital resources. As a result less resources are left for production, thus result in leftward lift in PPC

Test: Introduction To Economics - 5 - Question 21

If there is a recession, it will shift the country’s PPC to the

Detailed Solution for Test: Introduction To Economics - 5 - Question 21

During a recession (where all resources are not being utilized), then a movement out to the production possibility curve has no real opportunity cost.

Test: Introduction To Economics - 5 - Question 22

Massive unemployment shifts the PPC to the

Detailed Solution for Test: Introduction To Economics - 5 - Question 22

The point on the PPC where the economy was producing earlier will shift below the PPC. This is because unemployment implies inefficient use of resources and this inefficient use of resources depicted by shifting the point below PPC.

Test: Introduction To Economics - 5 - Question 23

For a farmer increasing sacrifice of potatoes for each unit of onions will produce _______ shape of his PPC.

Detailed Solution for Test: Introduction To Economics - 5 - Question 23

Marginal opportunity cost is defined as the amount of one good that needs to be given up in order to increase the production of the other good by one unit. It is calculated as Units of good one sacrificed/ units of the other good obtained. PPC is concave to origin because marginal opportunity cost increase due to law of diminishing returns.

Test: Introduction To Economics - 5 - Question 24

What is the SI unit of impulse?

Detailed Solution for Test: Introduction To Economics - 5 - Question 24

The SI unit of impulse is Newton second. It is given by the linear momentum due to the vector change. This produces an impulse in the same direction with respect to a given time.

Test: Introduction To Economics - 5 - Question 25

A tutor earns Rs. 1000 per hour teaching economics. If he joins a school, he would earn on an average Rs. 300 per hour. What is the opportunity cost of teaching in school?

Detailed Solution for Test: Introduction To Economics - 5 - Question 25

Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision.

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