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

Multiple choice commercial studies marketing and sales difference between products and services product marketing

The Cobb-Douglass Production Function is often used as ____________.

  1. Q = A K a L b

  2. Q = A K a L 1 - b

  3. log Q = a log k = log c

  4. Q = A b a - L a
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The standard Cobb-Douglas production function is expressed as Q = A * K^a * L^b, where Q is total production, A is total factor productivity, K is capital, L is labor, and a and b are output elasticities of capital and labor respectively.

Multiple choice commercial studies marketing and sales difference between products and services product marketing

Which of the following is an active factor of production?

  1. Land

  2. Labour

  3. Capital

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

The factors of production include land, labour, capital and entrepreneurship.

Other factors like land, capital are passive and but labor is an active factor. 
Land and labour are two essential factors of production. Since the real work of production is done by labour it is considered as the active factor of production.

Multiple choice commercial studies marketing and sales difference between products and services product marketing

Diversification means___________.

  1. Adding a new product to the existing product line

  2. Eliminating a product from the existing product line

  3. Modification of a product

  4. Both (B) and (C)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Diversification is a growth strategy where a company adds new products or services to its existing portfolio, often entering new markets or expanding its current product line.

Multiple choice commercial studies marketing and sales difference between products and services product marketing

Our decision to buy a product is not only affected by its physical qualities but also its tangible and ___________ factors.

  1. Non tangible

  2. Psychological

  3. Sociological

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

Consumer decisions are influenced by both tangible (physical) qualities and intangible psychological factors like brand perception, emotions, social status, and personal identity. Sociological factors relate to group behavior, and economic factors relate to cost/value. 'Non tangible' is redundant - the intended term is 'intangible' or 'psychological'.

Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

Exploitation of labour is said to exist when ________.

  1. Wage $=$ Marginal Revenue Product
  2. Wage $<$ Marginal Revenue Product
  3. Wage $>$ Marginal Revenue Product
  4. Marginal Revenue Product $= 0$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Exploitation occurs when a worker is paid less than the value of the output they contribute to the firm, which is represented by the Marginal Revenue Product.

Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

The supply of labour in the economy depends on which of the following?

  1. Population

  2. National income

  3. Per capita income

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

The total supply of labour in an economy is primarily determined by the size of the population, as this represents the potential workforce.

Multiple choice social science employment: growth, informalisation and other issues employment - trends and structure workers and employment sources of income

The level of input has ______ relationship with the level of employment.

  1. direct

  2. indirect

  3. significant

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

The level of input has direct relationship with the level of employment. This states that input and output has a positive technical or functional relationship. When the level of input or raw materials increases, the level of output also rises.

Multiple choice organization of commerce and management principles and techniques of management henri fayol's principles of management principles of management management of business

When minimum amount of resources is needed to produce goods and services it is called __________.

  1. productivity

  2. efficient

  3. effective

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

Efficiency is defined as the ability to accomplish a task with the minimum amount of waste, time, or effort, essentially doing things right.

Multiple choice history the rise of nationalism in europe reformation and enlightenment in europe reformation in europe national movements in europe historiography

The middle class earned their wealth from the manufacture of goods such as ______.

  1. Cotton textiles

  2. Silk textiles

  3. Both A and B

  4. Gold exports
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The new middle class, which emerged due to industrialization and trade, gained wealth primarily through the manufacture of goods, including both cotton and silk textiles, which were major industries of the time.

Multiple choice organisation of commerce and management marketing mix definition and functions of production department production or works department ideologies/concepts/views of marketing management

The amount of quality output for amount of input means ____________.

  1. productivity

  2. decrease in profit

  3. sales increase

  4. increase In profits
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Productivity is defined as the ratio of output produced to the input used. High productivity means achieving more output with the same or fewer inputs.

Multiple choice organisation of commerce and management marketing mix definition and functions of production department production or works department ideologies/concepts/views of marketing management

____________ is the value of money that has been used up to produce something.

  1. Cost

  2. Price

  3. Rate

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

Cost represents the monetary value of resources (labor, materials, overhead) consumed to produce a good or service. Price is what the customer pays, while capital refers to assets used in production.