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 human occupations primary economic activities population of india population

_____ is an example of secondary activity.

  1. Trade

  2. Education

  3. Grazing

  4. Production of sugar from sugarcane
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

  • Secondary activities add value to natural resources by transforming raw materials into valuable products.
  •  Secondary activities, therefore, are concerned with manufacturing, processing and construction (infrastructure) industries.
  • Therefore  manufacturing sugar from sugarcane is a secondary activity.

Multiple choice geography human occupations primary economic activities population of india population

As the economy develops, the share of tertiary sector in the National Income:

  1. Increases

  2. Decreases

  3. Increases first then decreases

  4. Decreases first then increases
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

As an economy develops, the focus shifts from agriculture (primary) and manufacturing (secondary) toward services (tertiary). Consequently, the tertiary sector's contribution to National Income typically increases.

Multiple choice geography pollution - types and sources environmental risks of economic development tundra climatic region effects and successes of environment conservation

Industrial activities increase ______ problems.

  1. Environmental

  2. Traffic

  3. Health

  4. Both a and b
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Industrial activities are a major source of pollution, waste generation, and resource depletion, all of which contribute significantly to environmental problems.

Multiple choice social science handicrafts and handlooms markets markets around us our bazaars

Most agricultural goods like grains and pulses are sold directly to ________ merchants.

  1. Wholesale

  2. Retail

  3. Both

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

Wholesale merchants, agents, and brokers are essential elements of the wholesale business. They help move goods between producers and retailers and the advent of modern technologies help them do this more efficiently. A wholesale merchant operates in the chain between producer and retail merchant.

Multiple choice civics agriculture in india - i : introduction agricultural reforms indian agriculture problem and policies plantation of crops

A significant increase in the production of horticultural products is called ___________________.

  1. Green revolution

  2. Golden revolution

  3. White revolution

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

A significant increase in the production of horticultural products is called Golden revolution. In India period between 1991 and 2003 is termed as the period of Golden Revolution.      

Multiple choice elements of business sources of business finance - 1 classification & choice of sources of funds classification of sources of finance owned funds and borrowed funds

Operating cycle can be delayed by ________________.

  1. Increase in WIP period

  2. Decrease in raw materials storage period

  3. Decrease in credit payment period

  4. Both (A) and (C) above

  5. Both (B) and (C) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Operating cycle period = Raw material storage period + Conversion period + Finished goods storage period + average collection period - average payment period.
Increase in WIP (or conversion) period will increase the operating cycle period and this will lead to delay in the operating cycle.

Multiple choice economics consumption and investment functions keynesian law of consumption and propensity to consume ex ante and ex post concept of consumption function, saving function and investment function

___________________ is consumption at zero level of income.

  1. Direct consumption

  2. Autonomous consumption

  3. Indirect consumption

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

Autonomous consumption refers to that consumption which occurs when there is no income in the economy. It is the minimum level of consumption that takes place in the economy due to the requirement of the basic needs of life. 

Multiple choice economics consumption and investment functions keynesian law of consumption and propensity to consume ex ante and ex post concept of consumption function, saving function and investment function

Higher level of current consumption means ___________.

  1. higher economic growth in future

  2. slower economic growth in future

  3. higher capital formation in future

  4. no change in growth rate
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Resources are scarce in nature, so if it will be consumed in large amount then future generation will not be able to meet their needs and it will result in slower economic growth. 

As income is either consumed or invested, therefore if the consumption is greater than the investment then the proportion of income invested will be less which will hamper the future income and which will again decrease the investment that will ultimately result in slower economic growth in future. 

Multiple choice civics haat (a weekly market) a weekly market role of market role of market/bazaar

The weavers depend on merchants for ________.

  1. Raw material

  2. Market

  3. Both A and B

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

The arrangement between the merchant and the weavers is an example of a putting-out system, whereby the merchant supplies the raw material and receives the finished product. The merchants purchase the yarn i.e the raw material and give instructions to the weavers about the kind of cloth that is to be made. Thus, the weavers do not have to spend their money on the purchase of raw material. Also, the problem of selling the finished cloth in the market is taken care of by the merchants.

Multiple choice civics haat (a weekly market) a weekly market role of market role of market/bazaar

Goods are produced in ________.

  1. Factories

  2. Farms

  3. Homes

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

Goods that we purchase from the market are produced in factories, farms and in homes. However, we don't buy the goods directly from the factories or from the farm. We purchase the goods from the traders who buy the goods from factories and farms.

Multiple choice civics haat (a weekly market) a weekly market role of market role of market/bazaar

At the cloth market, the merchants sell the cloth to the _________.

  1. Garment factories

  2. Jute factories

  3. Tanneries

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

The weavers depend on the merchants both for raw materials and markets. At the cloth market, the merchants sell the cloth to the garment factories. In this way, the market works more in favour of the merchants.

Multiple choice civics haat (a weekly market) a weekly market role of market role of market/bazaar

A chain of markets links the producer of cotton to the buyer at the ___________.

  1. Supermarket

  2. Stock market

  3. Black market

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

The market chain connects producers to consumers through various intermediaries, eventually reaching the final point of sale, such as a supermarket or retail shop.

Multiple choice business economics and quantitative methods consumer's behaviour consumer equilibrium laws in economics utility and law of diminishing marginal utility

________ says that the additional benefit which a person derives from a given increase in his stock of a thing diminishes with every increase in the stock that he already has.

  1. Marshall

  2. Robbins

  3. Keynes

  4. Smith
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Alfred Marshall propounded the law of diminishing marginal utility..He stated that as the consumption increases the marginal utility derived from the each successive units tends to decline. The consumer is less willing to sacrifice one good to consume one more additional unit of another good at a higher level of consumption.

Multiple choice social studies north america voyages and discoveries scientific inventions and technological developments india's contemporary economic condition

What vast system needs to be created for agriculture?

  1. Factories to manufacture tools and equipment used for farming

  2. Banks to provide loans to the farmers

  3. A market for the goods produced

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

Agriculture is essential to fulfill the need for food. Therefore, a vast system needs to be created which includes factories to manufacture tools and equipment used for farming, banks to provide loans to farmers, a market for the goods produced, etc. The existence of many systems makes  a stable society.

Multiple choice rural development poverty rural economics economics

In commercial farming there is ____________________.

  1. Less labor and high mechanization

  2. More labor and less mechanization

  3. More labour and more mechanisation

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

Commercial farming is characterized by large-scale production, high levels of mechanization, and the use of modern technology to maximize efficiency, typically requiring less labor per unit of output compared to subsistence farming.