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Test: Introduction To Economics - 1


10 Questions MCQ Test Economics Class 12 | Test: Introduction To Economics - 1


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This mock test of Test: Introduction To Economics - 1 for UPSC helps you for every UPSC entrance exam. This contains 10 Multiple Choice Questions for UPSC Test: Introduction To Economics - 1 (mcq) to study with solutions a complete question bank. The solved questions answers in this Test: Introduction To Economics - 1 quiz give you a good mix of easy questions and tough questions. UPSC students definitely take this Test: Introduction To Economics - 1 exercise for a better result in the exam. You can find other Test: Introduction To Economics - 1 extra questions, long questions & short questions for UPSC on EduRev as well by searching above.
QUESTION: 1

In Economics, a good is something which

Solution:

A good in economics is any object or product (factors of production) that is useful. A commodity is one kind of good. A good that cannot be used by consumers directly, such as an office building or capital equipment, can be called a good because it can be useful if it is sold.

QUESTION: 2

A resource is a

Solution:

A resource is good or a service because we can extract the resources from nature which can be used as a good .
Example: Cotton is obtained from nature which we wear as a cloth so it is a good.

QUESTION: 3

The central problems of an economy are due to

Solution:

Central problems arise in an economy due to scarcity of resources having alternative uses in relation to unlimited wants.

The Central Problem of all economies is scarcity.

Limited Resources + Unlimited Wants = Scarcity

Scarcity forces individuals, firms governments and societies to make choices.

QUESTION: 4

One or more persons living together and having a common budget is called:
Solution:

A household is a place where all people are living on a common budget and share the resources.

QUESTION: 5

The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point:
Solution:

The law of diminishing marginal returns states that, at some point, adding an additional factor of production results in smaller increases in output. With other production factors constant, adding additional workers beyond this optimal level will result in less efficient operations.

QUESTION: 6

Interest received on investment will be __________
Solution:

Interest received on investment is added in investing activities while preparing cash flow statement.

QUESTION: 7

Calculate Purchase on Investment. The information is Opening balance of Investment – Rs. 2,50,000, closing balance Investment – Rs. 5,00,000, Sale – Rs.1,37,500, Profit on sale – Rs.12,500.
Solution:

Purchase of investment during the year Rs.3,75,000 i.e.

► 5,00,000 + 1,37,500 - 2,50,000 - 12,500 = 3,75,000

QUESTION: 8

Under which type of activity will you classify the sale of shares of another company while preparing cash flow statement?
Solution:

Sale of shares of other company are part of investment which is now sold by the company. It is sale of investment, so it will take place in investing activity.

QUESTION: 9

Loose tools and Stores and spares are the part of _________
Solution:

Loose tools and Stores and spares are the part of inventories.

QUESTION: 10

Which among the following statement is INCORRECT?
Solution:

The percentage change in the quantity demanded divided by the percentage change in price is coefficient of elasticity.

So two linear and parallel demand curves will have the same coefficient of elasticity and the changes in price w.r.t changes in quantity demanded will be the same.

Hence, B is the correct option.

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