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 geography residences house patterns a shelter so high! roadways

A construction worker belongs to the ___________ sector of the economy.

  1. Organised

  2. Un-organised

  3. Both

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

A construction worker is a labourer, or professional employed in the physical construction of the built environment and its infrastructure. The term construction worker is a generic term and most construction workers are primarily described by the type of work they perform. They generally belong to the unorganised sector of the economy and ear their income as daily wages. They rarely have security of Job, safety in the job and are made to work for hours at low wages.

Multiple choice geography mineral resources and industrialisation the concept of development distribution and classification of industries in india mineral resources in rajasthan

The trend of growth rate in manufacturing over the last two decades has been around ____________ percent per annum.

  1. 6

  2. 7

  3. 8

  4. 9
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The growth rate of the manufacturing sector in India over the last two decades has generally been targeted at or observed around 7 percent per annum.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Main sources of income of Not-for-Profit organisations is _________.

  1. legacies

  2. donations

  3. subscriptions

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Main source of income of No-for-Profit organisation is legacies, donations and subscriptions. A non-for-Profit organisations is set up for promoting science, commerce, social cause etc. 

The main purpose is not to earn profits but to provide services. 
Legacy the income received  due to the death of a person who has mentioned the transfer of certain income in the will.
Donations are the major sources of such organisations. People usually donate a certain portion of their income for the welfare of the organisation.
Subscriptions are the side income of the not-for-profit organisation when a person subscribes for any activity in the various clubs inaugurated for societies's welfare. 

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

In the long run production function all inputs are fixed.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the long run, all inputs are variable. The statement that all inputs are fixed in the long run is incorrect; that condition applies to the very short period or is simply false by definition.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

The period of time in which the plant capacity can be varied is known as __________.

  1. the short period

  2. the market period

  3. the long period

  4. all of the above.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The long period is defined as a time frame long enough for a firm to change its plant capacity, which involves adjusting fixed factors like capital and machinery.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

In the case of very short period ______ is variable.

  1. land

  2. capital

  3. labour

  4. none of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In the very short period (market period), the supply is fixed because there is no time to adjust any factors of production. Therefore, none of the listed factors (land, capital, labour) are variable.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

In the long run ___________.

  1. all inputs are fixed

  2. all inputs are variable

  3. some inputs are fixed and rest are variable

  4. a few are variable and rest are fixed
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In the long run all inputs are variable as there is enough time for all factors to adjust according to the requirements for achieving least cost output. 

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

Whether a firm will plan for short-run or long-run production depends upon the __________.

  1. nature of demand for its product

  2. availability of inputs

  3. state of technology

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A firm's decision to plan for the short run or long run depends on various strategic factors including market demand, resource availability, and technological capabilities. All these factors influence the flexibility and scale of production planning.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

The short run is characterized by ___________.

  1. at least one fixed factor of production and firms neither leaving nor entering the industry

  2. a period where the law of diminishing returns does not hold

  3. no variable input, i.e., all of the factors of production are fixed

  4. all inputs being variable
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The short run, as economists use the phrase, is characterized by at least one fixed factor of production so the proportion of inputs can be changed, the law of variable proportion will only operate in the short run. Firms in perfect competition can make super normal/subnormal profits in the short run as firms are allowed to enter and exit the market only in the long run.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

In describing a given production technology, the short run is best described as lasting __________.

  1. upto six months from now

  2. upto five years from now

  3. as long as all inputs are fixed

  4. as long as at least one input is fixed
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Short run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the short run as long as at-least one factor of production is fixed. 

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

Which of the following statement is true?

  1. In short run, some of the factors of production are fixed and other may vary.

  2. In short run, all the factors of production are fixed.

  3. In short run, all the factors of production are variable.

  4. In short run, there are no fixed factors of production.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Short run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the short run as long as at-least one factor of production is fixed. 
Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

The term ______ is defined as that length of time over which the firm gets an opportunity to vary if need be the quantities of all its inputs.

  1. short run

  2. long run

  3. very short period

  4. all of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Long run does not correspond to a specific time frame, rather is varies by the industry of operation, and sometimes it can even vary between different firms in the same industry. A firm is considered to be in the long run when it has the opportunity to vary all factors of production.
Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

In the long run production function all inputs are fixed.

  1. True

  2. False

  3. Partly true

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

In the long run all factors are variable as the firm has enough time and other resources to vary any of its factors of production.

Multiple choice economics laws of returns - returns to a factor and returns to scale production and costs production function producer behaviour and supply total product, average product and marginal product production and law of variable proportions production return to scale and cobb douglas function land land,labour, capital and entrepreneur how does production take place?

Which of the following is an assumption in the Law of Variable Proportions?

  1. The Fixed Factor of production is scarce

  2. There are no perfect substitutes for the Fixed Factor

  3. Factors of Production can be used in any proportion

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Law of Variable Proportions assumes that factors are not perfect substitutes, the fixed factor is scarce, and factors can be combined in different proportions. Therefore, all these are valid assumptions.