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 economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

Wealth cannot be classified as __________.

  1. Private Wealth

  2. Assertive Wealth

  3. Negative Wealth

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

Wealth: it is defined as the stock of resources which can be used at present or in the future.

All the given options are the classifications of wealth:

  • Private wealth: This includes all material and non material goods of an individual which can convert into money. 
  • Public wealth: This includes all material and non material goods owned by a community together
  • Negative Wealth: it is owned by an individual for a particular time period and then returned.
  • National Wealth: it is the wealth owned by nation.

Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

_____ represents the stock of resources which help in producing goods or commodities, whereas _____ represents the flow of goods and services.

  1. Wealth, Income

  2. Income, Wealth

  3. Product, Wealth

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

  • Wealth: It is defined as the stock of resources which can be used at present or in the future.
  • Income: It is the money obtained by flow of goods and services on regular basis.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Value Added Method involves _______.

  1. identifying the producing enterprise and classify them into industrial sectors according to their activities

  2. estimating net value added by each producing enterprise as well as each industrial sector and adding up the net value added by all the sectors

  3. both A and B

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

The Value Added Method involves both identifying sectors and calculating the net value added by each to determine the total GDP contribution.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Countries which are industrially developed have _______ per capital income.

  1. higher

  2. lower

  3. lowest

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

Industrially developed nations typically have a higher per capita income due to higher productivity and value addition in their economies.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Intermediate goods means _________.

  1. minerals, fertilizers, cement , steel , iron etc.

  2. machinery, machine tools etc.

  3. chemicals, rubber, plastic, coal etc.

  4. man-made fibers, beverages, watch etc.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Intermediate goods are goods used as inputs in the production of other goods, such as chemicals, plastics, and rubber.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Consumer goods means ________.

  1. minerals, fertilizers, cement, steel, etc.

  2. machinery, machine tools etc.

  3. chemicals, rubber, plastic, coal etc.

  4. man-made fibers, beverages, watches etc.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Consumer goods are final products purchased by individuals for personal use, such as watches, beverages, and fibers.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

The higher the prices of capital relative to the prices of labour, the more production techniques should be ____________.

  1. labour intensive

  2. capital intensive

  3. fixed

  4. labour or capital intensive and we cannot say which without additional information.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Beacause the prices of capital are higher than that of labour hence the technique of production used should be labour intensive. 

One major reason behind this would be the production costs would be lesser if such techniques are used.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Which of the following is a reason for small scale industries is more labor intensive? 

  1. Small industries cant afford high amounts of capital

  2. Small industries can afford high amounts of capital

  3. Labor is very expensive

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

Small-scale industries are labor-intensive primarily because they lack the capital to invest in expensive, automated machinery.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Which of the following licenses were required by industries? 

  1. To establish an industrial unit

  2. To expand production

  3. To get tax benefits

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

Under the license raj, industries required licenses for establishing units, expanding production, and diversifying, which were all part of the regulatory framework.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

As Industrialization grows, the role of capital goods vs-a-vis consumer goods ____________.

  1. increases

  2. decreases

  3. remains relatively constant

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

As industrialization progresses, the demand for capital goods (machinery and equipment) increases relative to consumer goods to support further production and infrastructure development.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

The market for industrial goods in rural area is ______.

  1. narrow

  2. moderate

  3. broad

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

Due to lower purchasing power and limited infrastructure in many rural areas, the market for industrial goods has historically been narrow.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Higher Industrial output results in _________  income per head. 

  1. higher

  2. lower

  3. moderate

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

Higher industrial output generally leads to increased productivity and economic growth, which in turn results in higher income per head.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Capital goods industries produce _______.

  1. materials, fertilizers, cement, steel, iron etc.

  2. machinery, machine tools etc.

  3. chemicals, rubber, plastic, coal etc.

  4. man-made fibers, beverages, watches etc.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Capital goods industries are those that produce machinery, machine tools, and equipment used to manufacture other goods.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Basic goods industries produce _______.

  1. materials, fertilizers, cement, steel, iron etc.

  2. machinery, machine tools etc.

  3. chemicals, rubber, plastic, coal etc.

  4. man-made fibers, beverages, watches etc.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Basic goods industries are those that produce raw materials and intermediate products like steel, iron, cement, and fertilizers, which serve as the foundation for other industries.

Multiple choice organisation of commerce and management the nature of the indian economy part 2 industrial revolution in india subsidies, industrial policy and trade policy cottage and small scale industries

Industrialization involves  ___________.

  1. adoption of technologically superior techniques of production

  2. application of modern techniques of management and organization

  3. both (A) and (B)

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

Industrialization refers to a period where high growth rate in the economy can be achieved by industrial application which involves adoption of technology that supports superior techniques of production as well as use of modern techniques of management and organisation.