1) Micro-economic theory studies how an economy determines.
a)The price of goods
b)The price of services
c)The price of economic resources
d) All of the above.
Ans: (d)

2) A producer’s positively sloped supply curve for a commodity represents.
a)In one sense a maximum and in another sense a minimum boundary of the.producer’s intentions.
b)A maximum boundary of the producer’s intentions.
c)A minimum boundary of the producer’s intentions.
d)None of the above.
Ans: (a)

3) The theory of distribution refers to:
a)The distribution of income among various factors of the production.
b)The distribution of income among different individuals in the economy.
c)Both of the above
d)None of these
Ans: (a)

4) Interest is reward for parting with liquidity according to:
a) B. Ohlin
b) Von Haberler
c) J.M. Keynes
d) Alfred Marshall
Ans: (c)

5) Economics may be divided into macro-economics and micro-economics. Among the subject matter of micro economics may be found:
a)The nature of value in exchange.
b)The size of a country’s national income
c)The allocation of resources among competing uses
d) The relative prices
of specific services.
Ans: (d)

6) The statement that’economics is positive and not normative’ means:
a)That economics can be used to prove that capitalism is better than socialism.
b)That economics tells us what kind of economic behaviour or policy is wholesome and what evil
c)That economics tells policy makers which alternative to choose from among several efficient ones.
d)That economics can only indicate consequences of policies, choices, or conditions.
Ans: (d)

7) Which of the following statements is incorrect?
a)Micro-economics is primarily concerned with the problem of what, how and for whom to produce.
b)Micro-economics is primarily concerned with the behaviour of individual decision making units when at equilibrium.
c)MiCroeconomics is primarily concerned with the time path and process by which one equilibrium position evolves into another
d)Micro-economics is primarily concerned with comparative static rather dynamics.
Ans: (a)

8) Economic laws may be described as:
a)Principles derived from analysis of price input / output determination.
b)Generations concerning the economic behaviour of individuals and institutions.
c)Forecasts in quantitative terms of the economic development of society.
d)Expression of the basic features of competition.
Ans: (b)

9) The main difference between positive economics and normative economics is that the former.
a)Discusses the ethical implications of its laws.
b)Concerns itself only with hypotheses which can generally be tested.
c) Is based on the value judgements of economists.
d)Considerscarefully the political significance of its laws for a democratic society.
Ans: (b)

10) Adam Smith advocates:
a) Laissez-faire
b) Division of Labour
c) Both of the above
d) None of the above
Ans: (C)

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