Economics · General Awareness

Economic Principles

1,097 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

Multiple choice

Directions: In the following question, select the option that fills up the blanks most suitably and in the same order.

The share of Japanese cars in the American market, for _____ is largely made up of cars with Japanese _____ manufactured in factories located in the U.S.

  1. dollars, technology

  2. example, expertise

  3. instance, brands

  4. marketing, spirit
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the options available to us, only (2) and (3) are choices which have a probability of being the answer. Now, we have to see the better choice out of these. Japanese 'expertise' can't be manufactured but 'brands' can be built. So, answer is (3).

Multiple choice

_____ resources may be usable by at most one process at a time.

  1. Reusable

  2. Consumable

  3. Usable

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Reusable resources (like memory blocks, printers, or files) can be used by multiple processes over time, but only by one process at any given moment. They must be explicitly allocated and deallocated. After use, they return to the available pool for future allocation.

Multiple choice

________ resources are produced and consumed by active processes.

  1. Reusable

  2. Consumable

  3. Usable

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Consumable resources are created by one process and destroyed by another during execution. Examples include signals, messages in a buffer, or interrupts. Unlike reusable resources, consumable resources cease to exist once consumed and must be regenerated for another use.

Multiple choice

Which of the following is/are not contingent goods?

  1. Crops likely to grow in the field (if they grow)

  2. Supply of goods via a ship (if they reach safely)

  3. Eggs laid by the hens (if any)

  4. Paintings to be painted by painter.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Option (4) is correct: Paintings to be painted by a painter are future goods. All the others are contingent goods. Contingent goods are those which exist at the time of happening or non-happening of a future uncertain event.

Multiple choice

The goods which help in the consumption of other goods are

  1. consumer goods

  2. producer goods

  3. free goods

  4. durable goods
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (1) is incorrect: Consumer goods are the end result of production and manufacturing, and are what a consumer will see on the store shelf.  Option (2) is correct: Producer goods are the raw materials or consumable items for the production of other goods. Consumer goods are ready to use goods and are directly used by consumers. Free goods do not have exchange value. Durable goods are used for a long time.

Option (3) is incorrect:  Free goods are available in as great a quantity as desired with zero opportunity cost to the society. Option (4) is incorrect: Durable goods are a category of consumer products that do not need to be purchased frequently because they are made to last for a long time.

Multiple choice

-------------- is a summary of relevant business Tractions

  1. commerce

  2. Economics

  3. Statistics

  4. Accounts
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounts is the systematic recording, summarization, and reporting of financial transactions and information relevant to a business. It provides a structured summary of all business activities for decision-making.

Multiple choice

According to Fayol, financial activities of an industrial undertaking deals with

  1. production

  2. buying and selling

  3. protection of property

  4. optimum use of capital

  5. planning and organising
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to Fayol, financial activities deal with seeking financial sources and ensuring optimum use of capital. This includes raising funds, managing investments, and ensuring financial resources are used efficiently to support business objectives.

Multiple choice

What type of unit is a family in an industrial society?

  1. Economic

  2. Consumption

  3. Production

  4. Profit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In industrial societies, the family functions primarily as a consumption unit because economic production has moved to factories and firms outside the household. The family provides emotional support, socialization, and consumes goods and services produced elsewhere, unlike in agrarian societies where families were units of production.

Multiple choice

Consider the following statements about industrial society

  1. A new system of production, distribution and exchange.
  2. Extreme division of labour, specialization and segmented roles.
  3. Trend from contract to status.
  4. Impetus towards individualism and impersonality. Which of the statements given above are correct?

  1. 2 and 3 only

  2. 1, 2 and 4 only

  3. 1 and 3 only

  4. 1 and 4 only
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Industrial society is characterized by: (1) new capitalist systems of production/distribution (true), (2) extreme division of labour and specialized roles (true), (3) trend FROM status TO contract (main's thesis is reversed), (4) emphasis on individualism and impersonality (true, due to mechanization and bureaucratic organization). Statement 3 reverses the actual trend.

Multiple choice

Which of the following statements about industrialization are correct?

  1. It is a structural shift.
  2. It denotes movement of people.
  3. It emphasizes the economic activity.

  1. 1 and 2 only

  2. 2 and 3 only

  3. 1 and 3 only

  4. 1, 2 and 3
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Industrialization is correctly described as all three: a structural shift from agrarian to industrial economy (1), involving movement of people from rural to urban areas and between sectors (2), and emphasizing economic activity changes with increased manufacturing and production (3). All statements accurately characterize different dimensions of industrialization.