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 economic reconstruction economics of planning objectives of economic planning in india major economic problems

By scarcity of productive resources we mean ______.

  1. limited supply

  2. restricted supply

  3. non existence of supply

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

Scarce resources refers to the resources which are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Which of the following is not a central problem of a society?

  1. What to produce

  2. How to produce

  3. For whom to produce

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

The central problems of production deals with production of necessary commodities using scarce means of resources. Therefore, "when to produce" is not a central problem as it is assumed that goods are demanded throughout the year because of unlimited human wants. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

One country enjoys a comparative advantage over the other in producing oil when _______________.

  1. it has more oil than the other country

  2. it can produce oil at a lower opportunity cost than the other country

  3. it does not need to import oil

  4. it wants to export as much oil as possible
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

One country enjoys a comparative advantage over the other in producing oil when it can produce oil at a lower opportunity cost than the other country .The country enjoys a greater advantage over other countries if the opportunity cost of producing oil in that country is less than others.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Scarcity can be avoided by limiting ______________.

  1. needs

  2. wants

  3. resources

  4. wants and needs
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In economics, sustainable development is given the upmost priority as it refers to fulfilment of current economic needs of the people without sacrificing the ability of the future generation to need their needs but if the scarce resources 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. Therefore, scarcity can only be cured by limiting needs and wants. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Opportunity costs are a result of __________.

  1. scarcity

  2. overproduction

  3. technology obsolescence

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

The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.
Therefore, opportunity cost is a result of scarcity of resources in the economy.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems
Which of the following is related to the problem 'how to produce'?

  1. Factorial distribution of income.

  2. The choice of technique.

  3. The choice of product.

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

The question for "How to produce?" is faced by the economy they should consider both labour intensive techniques as well as capital intensive techniques depending upon the availability of resources in the economy.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Multiple choice question:

In which of the following situations, does scarcity arise?

  1. Supply of resources $>$ Demand for resources
  2. Supply of resources $<$ Demand for resources
  3. Supply of resources $=$ Demand for resources

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

Scarcity of resources refers to the situation where resources are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs and unlimited demands as human wants are unlimited. 

Multiple choice social science food security in india need for nregs rural development and employment guarantee scheme food security and nutrition

Food production within the country, food imports and the previous year's stock of granaries is called _____.

  1. Affordability of food

  2. Accessability of food

  3. Availability of food

  4. Stock of food
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Availability of food- It means food production within the country, food imports and the previous year's stock of granaries.

Multiple choice social science food security in india need for nregs rural development and employment guarantee scheme food security and nutrition

Ration shops also known as _____ keep stocks of food grains, sugar, and kerosene oil for cooking.

  1. Few Price Schemes

  2. Fair Price Shops

  3. Fast Price Shops

  4. First Price Shops

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

Fair Price Shop means a shop which has been licensed to distribute essential commodities by an order issued under section 3 of the Essential Commodities Act, 1955 to the ration card holders under the Targeted Public Distribution System. Locally these are known as ration shops and chiefly sell wheat, rice, kerosene and sugar at a lower price than the market which is hence known as the, Issue Price.

Multiple choice business organisation importance of management introduction and characteristics of management meaning, nature and importance of management basics of management

To a very large extent the success of an organization is dependent on its _________.

  1. raw material supplier

  2. management

  3. promoter

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

Effective management is the primary driver of organizational success, as it coordinates resources, people, and processes to achieve goals.

Multiple choice business organisation importance of management introduction and characteristics of management meaning, nature and importance of management basics of management

Which inputs has the greatest potential to increase productivity?

  1. Labour

  2. Globalization

  3. Management

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

Management is considered the most critical input for increasing productivity because it coordinates and optimizes the use of all other inputs like labor, capital, and technology.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

'Manufacturing Account' is prepared by _________.

  1. Pharma Industry

  2. Cement Industry

  3. Iron Industry

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

Every business have to prepare financial statements at the end of every financial year to know the profitability and financial position of the business. In case of trading concern, business need to prepare trading account and Profit & Loss account and the Balance Sheet. In case of manufacturing concern, business need to prepare manufacturing account, trading account and Profit & Loss account and the Balance Sheet.

Multiple choice

Many early factories were built were to get power?

  1. Oceans

  2. Rivers

  3. Lakes

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

Early factories were powered by water wheels, which required proximity to flowing water sources like rivers. This is why many industrial towns developed along riverbanks.

Multiple choice geography trade in agricultural produce (part - b) agriculture and animal husbandry in tamil nadu trade in agricultural produce - ii tamil nadu agriculture

Market, local assistance, government subsidy and incentives are called _____ factors influencing agriculture.

  1. Social

  2. Physical

  3. Economic

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

Economic factors influencing agriculture include:

1. Market
2. Loan assistance
3. Government subsidy and incentives