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 economics how does production take place? entrepreneur land,labour, capital and entrepreneur production mechanism

Which factor of production brings together the other factors of production in order to produce economic goods and services?

  1. Land

  2. Labourer

  3. Capital

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

Entrepreneur uses his/her skills and knowledge to bring together all the other factors of production in order to produce goods and services in the economy.

Multiple choice economics how does production take place? entrepreneur land,labour, capital and entrepreneur production mechanism

The process of co-ordinating land, capital and labour for production is called _________________.

  1. Organize

  2. Entrepreneurship

  3. Service

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

The process of coordinating land, capital and labour for production is called Entrepreneurship. It is the capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a profit. Entrepreneurs act as managers and oversee the launch and growth of an enterprise.

Multiple choice economics how does production take place? entrepreneur land,labour, capital and entrepreneur production mechanism

 ________ is the person who combines the various factors of production in the right proportions, initiates the process of production and bears the risk involved in it.

  1. Capitalist

  2. Socialist

  3. Government

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

An entrepreneur is defined as an individual who organizes, manages, and assumes the risks of a business or enterprise.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

Economic activities have two parts:- market activities and ______________.

  1. Same activities

  2. Post activities

  3. Profit activities

  4. First activities

  5. Non-market activities
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

  • Market activity refers to the economic activity which includes the production and consumption of goods. These are performed for pay or profit. For example a teacher training in a school, a man working in the bank.
  • Non-marketing activities include things which are not economic and comprises of the exchange system. These are performed for self-consumption. For example subsistence farming, processing of primary products, etc.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

When an industry expands all the firms get ______.

  1. internal economics

  2. external economics

  3. returns to scale

  4. none of the above

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Industry refers to a number of market grouped together. So when an industry expands, there is a lot of sectors that is benefitted. All the firms in the economy, gets external economies that is they get the benefit of large scale business and they tend to grow further.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

Capital intensive technique would get chosen in a ___________.

  1. labour surplus economy

  2. capital surplus economy

  3. developed economy

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

Capital surplus economy refers to an economy where the rate of investment is very high, i.e, quick capital accumulation takes place. Capital intensive techniques would, thus, be preferred as money can be converted into useful assets for production. 

Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

Which factors result in the exchange of goods?

  1. Geology

  2. Vegetation

  3. Soil

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

The exchange of goods is driven by regional differences in resources, which are influenced by geology, vegetation, and soil quality. These factors determine what a region can produce and what it must trade for.

Multiple choice organisation of commerce and management trade trade and factors affecting trade trading and economic organisations trade and trade organisations

An example of a labour intensive good, which may be exported, is ________.

  1. Silk fabrics

  2. Watches

  3. Perfumes

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

Labor intensive refers to a process or industry that requires a large amount of labor to produce its goods or services. A prime example of a labor-intensive industry relates to tea production, especially those companies involved in the cultivating of tea leaves that must be picked with minimal damage to the plant as a whole.

Multiple choice elements of business selling and distribution definition and functions of purchasing and storage department purchasing and stores product life cycle

________ is the main factor in timely execution of industrial projects.

  1. Advertising

  2. Promotion

  3. Purchasing

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

Purchasing is critical for ensuring that necessary materials are available on time, which is essential for the timely execution of industrial projects.

Multiple choice social science production in a factory - a paper mill production in a paper mill information technology industry automobile and electronic industries

________ allows a factory to produce paper continuously throughout the day.

  1. The match system

  2. The batch system

  3. The union system

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

 The batch system allows a factory to produce continuously throughout the day. It also allows the managers to trace any mistake in the product by checking what went wrong with the particular batch.

Multiple choice elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

Who of the following has defined business as "Human activity directed towards producing or acquiring wealth through buying and selling goods"?

  1. Wheeler

  2. H. Fayol

  3. J. Stephenson

  4. Lewis H. Haney
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to Lewis H. Haney defined business as "Human activity directed towards producing or acquiring wealth through buying and selling goods." 

In other words, business is concerned with buying and selling of goods and services and earning profit. 

Multiple choice geography international economics organization mncs and impact of globalization effects of globalisation in india globalization and trade

The companies which control the production in more than one country are known as __________.

  1. Multi State Organization

  2. Multi National Company

  3. International Trade Organization

  4. International Monetary System
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A Multinational Corporation (MNC) is a company that owns or controls production of goods or services in at least one country other than its home country.