Economics · General Awareness
Economic Principles
1,087 Questions
Economic principles form the foundation of how societies allocate resources and produce goods. This topic covers factors of production, types of capital, and demand classifications. It is a vital component of the economics syllabus in many civil services and banking exams.
Factors of productionCapital typesDemand classificationsEconomic activities
Economic Principles Questions
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two
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three
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many
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five
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none of these
A
Correct answer
Explanation
Taylor's differential piece rate system involves setting two different rates: a lower rate for those who produce less than the standard output and a higher rate for those who meet or exceed the standard.
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Excess capacity
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Surplus capacity
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Normal capacity
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Abnormal capacity
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None of these
C
Correct answer
Explanation
Normal capacity is the production level expected to be achieved over a period of time under normal circumstances, smoothing out the seasonal or cyclical fluctuations in production.
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Depreciation
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Appreciation
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Replacement
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Obsolescence
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None of these
D
Correct answer
Explanation
Obsolescence occurs when an asset becomes outdated or inefficient due to technological advancements, even if the asset is still physically functional.
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It is a phase which does not have higher sales<o:p></o:p>
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Companies do not need to spend substantially on production and marketing<o:p></o:p>
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Profit might decline at later stage<o:p></o:p>
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Availability of resources is not a big factor<o:p></o:p>
C
Correct answer
Explanation
Profits decline at later stage in case of growth phase.Hence, it is the right answer.
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Bell shaped PLC<o:p></o:p>
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Growth- slump maturity pattern<o:p></o:p>
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Cycle recycle pattern<o:p></o:p>
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Scalloped PLC<o:p></o:p>
C
Correct answer
Explanation
A pharmaceutical company gives a push to its new drug aggressively and later when the sales start declining in the sales cycle it gives it another push due to which a cycle of lesser magnitude starts of. Hence, it is the right answer.
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Growth slump maturity pattern<o:p></o:p>
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Bell shaped pattern<o:p></o:p>
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Cycle recycle pattern<o:p></o:p>
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Scalloped pattern<o:p></o:p>
A
Correct answer
Explanation
Sales of kitchen appliances show growth slump and maturity pattern as their sales grow rapidly when introduced, then it falls to a petrified level and then it is sustained by late adopters buying the product for the first time and the early adopters that replace the product. Hence, it is the right answer.
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Waste
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Fragments
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Defectives
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Scrap
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None of these
C
Correct answer
Explanation
Defectives are units that do not meet quality standards but can be repaired or reworked to become acceptable products. This process incurs additional costs.
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EOQ
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BOQ
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EBQ
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Re-order period
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All of the above
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financial
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economic
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social
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operational
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none of these
D
Correct answer
Explanation
Material control involves both accounting aspects (recording transactions) and operational aspects (the physical flow and usage of materials in the production process).
B
Correct answer
Explanation
Expanding an existing project typically requires additional inventory, receivables, and cash to support the increased scale of operations. Therefore, additional working capital is almost always necessary.
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AR > AVC
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MR > MC
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AR = AVC
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AR <AVC
C
Correct answer
Explanation
The production should continue till the AR is equal to AVC.
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technology
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man
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alternative uses
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economic growth
B
Correct answer
Explanation
The welfare of man and his study is more important in definition of Dr. Marshall as compared to wealth.
Robbins pointed out economics as study of making choice between alternate uses.
Prof. Samuelson considered economic growth more significant.
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Alternative production possibilities
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Alternate technology available
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Alternate use of products
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Alternate investment opportunities
A
Correct answer
Explanation
PPC curve shows the various production possibilities of two products.
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Gift
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Scholarship
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Rent-free house given by employer
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Interest on capital
C
Correct answer
Explanation
Rent-free house given to employee is a part of factor payment.
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Stock of raw material
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Stock of work in progress
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Stock of finished goods
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Wages
C
Correct answer
Explanation
Finished goods are a part of trading account.