Question # 1

In production process when marginal product increases with the increase in units of variable factors along with fixed factor, this tendency in economics is called

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Law of production

Law of increasing return

Law of decreasing return

Law of constant return

If the equation is this, MC=MR=AR(P)<AC then the firm

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Earns normal profit

Earns abnormal profit

Bears loss

Bears abnormal loss

The subject matter of Macro Economics is

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Consumer's behavior

International trade

Firm's behavior

Price mechanism

Relationship of value of money with quantity of money is

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Direct

Indirect

Inverse

Positive

Transfer payment means that income

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Which can move from one place to order place i.g. money etc.

Which is received without labour, e.g. Zakat, gift , pension etc

Which is received after hardwork

Which is received by exports

Supply of perishable goods e.g. groceries, fruit, meat etc is

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Less elastic

More elastic

Perfectly inelastic

Perfectly elastic

Next best alternative use of resources is known as:

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Implicit cost

Explicit cost

Opportunity cost

Sunk cost

When average product increase, marginal product

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Decreases

Is zero

Is negative

Also increases

Who said that economics is the science of wealth ?

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Adam Smith

Robbins

Marshall

Pigou

Economics is basically divided into two parts

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Micro and macro economics

Micro and applied economics

Theoretical and applied economics

Welfare and applied economics

If an entrepreneur does service, in economics it is called

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Organization

Discipline

Labour

Wage

When supply increases due to other factors besides price, it is called

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Extension of supply

Contraction of supply

Rise of supply

Fall of supply

If supply rises more proportionately than that of demand, then

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity decreases

If demand rises more proportionately than that of supply, then

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Equilibrium price increases

Equilibrium price decreases

Equilibrium price does not change

Equilibrium quantity decreases

Disadvantages of paper money are

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Unstable value

Possibility of inflation

Possibility of wastage

All the three

At shut down position:

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AC = AR

AVC = AR

AVC < AR

AVC > AR

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Principles of Economics Icom Part 1 English Medium Online Test MCQs With Answers

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