Economics | Study Mode

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Question 1
A
studies laws that govern human behaviour 
B
uses scientific method to explain human behaviour 
C
makes use of controlled experiments to explain human behaviour 
D
makes use of machines to study human behaviour 
Explanation.
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Economics is regarded as a science because it uses scientific methods to build theories that can help explain the behaviour of individuals, groups and organisations. Economics attempts to explain economic behaviour, which arises when scarce resources are exchanged.


Correct Option:
B
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Question 2
A
forest 
B
diamond 
C
roads 
D
crude oil 
Explanation.
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Land, sometimes referred to as dry land, is the solid surface of Earth that is not permanently covered by water and is immovable


Correct Option:
C
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Question 3
A
production is shifting to the left 
B
resources are under-utilized 
C
economic growth has taken place 
D
factors of production are moving outward 
Explanation.
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Increases in theproduction possibilities curve are represented byshifts outward, or to the right, while decreasesarerepresented byshiftsinward, or to the left.

When using aPPc, growth is defined as an increase in potential output over time, and illustrated by anoutward shiftin the curve. Anoutward shiftof aPPc means that an economy has increased its capacity to produce all goods.


Correct Option:
D
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Question 4
A
ownership of resources 
B
scarcity of resources 
C
method of decision making 
D
motivation for production 
Explanation.
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Economic systemsare the means by which countries and governments distribute resources and trade goods and services. They are used to control the five factors of production, including: labor, capital, entrepreneurs, physical resources and information resources.Aneconomic systemis asystemof production, resource allocation, exchange and distribution of goods and services in a society or a given geographic area.


Correct Option:
B
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Question 5
A
is affected by extreme values 
B
can only be used for continuous data 
C
cannot be used to measure the qualities of a population 
D
cannot be determined in group data 
Explanation.
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The important disadvantage of mean is that it is sensitive to extreme values/outliers, especially when the sample size is small. Therefore, it is not an appropriate measure of central tendency for skewed distribution. Mean cannot be calculated for nominal or nonnominal ordinal data.


Correct Option:
A
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Question 6
A
shortage of commodities 
B
low retail prices 
C
hoarding of goods 
D
high retail prices 
Explanation.
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middlemenintervention raise price for consumers. The real profit goes to themiddlemenwho buy up the farm products at almost give away prices and sell at outrageous prices to the consumers.


Correct Option:
B
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Question 7
A
demand curve will shift to the left while supply curve will shift to the right 
B
supply curve will shift to the left 
C
supply curve will shift to the right 
D
demand curve will shift to the right while supply curve remains unchanged 
Explanation.
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if the cost of resources used to produce a good increases, sellerswillbe less inclined tosupplythe same quantity at a given price, and thesupply curve will shift to the left.


Correct Option:
B
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Question 8
A
price of the commodity 
B
goods of ostentation 
C
giffen goods 
D
rare commodity 
Explanation.
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An uncommonly high productdemandthat is outside the normal parameters established by the management policy is called anAbnormal Demand.

AGiffen good, in economic theory, is agoodthat is in greater demand as its price increases. For example, if the price of an essential food staple, such as rice, rises it may mean that consumers have less money to buy more expensive foods, so they will actually be forced to buy more rice.


Correct Option:
C
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Question 9
A
the demand curve to the left 
B
the supply curve to the right 
C
both the supply demand curves to the left 
D
supply curve to the left and demand curve to the right 
Explanation.
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Subsidy impact. Marginal subsidies on production will shift the supply curve to the right until the vertical distance between the two supply curves is equal to the per unit subsidy; when other things remain equal, this will decrease price paid by the consumers (which is equal to the new market price) and increase the price received by the producers.


Correct Option:
B
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Question 10
A
producers pay high taxes 
B
two commodities can be supplied at the same time 
C
at a lower price, less is supplied 
D
at a lower price, more is supplied and demanded 
Explanation.
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In most cases, thesupply curveis drawn as asloperisingupward from left to right, since product price and quantity supplied are directly related (i.e., as the price of a commodity increases in themarket, the amount supplied increases, and at a lower price, supply decreases).


Correct Option:
C
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