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

Farm size and holdings, farmer's acceptance towards innovation, his beliefs and myths are _____ factors influencing agriculture.

  1. Physical

  2. Social

  3. Economical

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

The social factors influencing agriculture include:

1. Traditional knowledge
2. Farm size and holdings
3. Farmer's acceptance toward innovation

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

A refrigetor operating in a chemist shop is an example of ________.

  1. free goods

  2. final goods

  3. producer's goods

  4. consumer's goods
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Chemist will keep the medicines and other things which are to be stored below the room temperature and thus the refrigerator in a chemist shop is a producer's good as it helps to satisfy human wants indirectly.

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

_______ refers to market where services of factors of production are brought and sold.

  1. Goods Market

  2. Factor market

  3. Road side kiosks

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

In economics, factor market refers to the the market where factors of production ,namely land,labour,capital entrepreneurship -are brought and sold.

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

All of the goods which are scarce and limited in supply are called _______.

  1. luxury goods

  2. expensive goods

  3. capital goods

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

Scarce goods which are limited in supply are known as economic goods as economics deals with the optimum utilization of scarce resources to its alternative uses.

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

Goods in the process of being produced  but not yet completed as finished goods are called ______________.

  1. work-in-progress inventory

  2. goods in floor inventory

  3. raw material consumed inventory

  4. in process inventory
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Work-in-progress inventory refers to items that have begun the production process but have not yet reached the stage of finished goods.

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

In economics goods includes material things which _______.

  1. can be transferred

  2. can be exchanged for one another

  3. both

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

Economic goods refer to those goods which can be transferred from one place to another and can be exchanged for one another. For example, cloth is an economic good which can be transferred from one place to another; it can also be exchanged for another different good. ( Say pen)

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

In deciding "What to produce", the economy should focus on the production of:

  1. Capital Goods only

  2. Consumer Goods only

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An economy will require an optimal proportion of consumer and capital goods in order to be sustainable in the long run. If too much focus is put into producing consumer goods, the future consumption and growth will be limited as capital goods are required in the production of consumer goods. If too much focus is put into producing capital goods, the current consumption will be limited.

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

An economy which uses all its resources on production of _____________ , cannot provide for future growth prospects.

  1. capital goods only

  2. consumer goods only

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An economy will require an optimal proportion of consumer and capital goods in order to be sustainable in the long run. If too much focus is put into producing consumer goods, the future consumption and growth will be limited as capital goods are required in the production of consumer goods. If too much focus is put into producing capital goods, the current consumption will be limited.

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

The issue of "for whom to produce" deals with __________..

  1. how to distribute and share the national product

  2. shares of different people in the total output of goods & services

  3. both (a) and (b)

  4. neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The problem of “whom to produce” relates to the distribution of available resources in the economy.

It also includes the contribution of the people in the total output and income of the economy.  

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

The problem of "What to produce" covers the issue relating to:

  1. What goods are to be produced

  2. What qualities of goods are to be produced

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Due to the basic economic problem of scarcity, it is essential to choose which of the unlimited human wants and needs will be fulfilled by using the limited resources. This choice is usually made collectively by each economy, the laws of demand govern what people want and then the laws of supply aim to match it at an equilibrium seeking to make a profit. Thus the "what to produce?" takes into account what goods will be produced and how much of the good will be produced. 

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

Stock of both man made goods as well as natural, resources like capital is called____.

  1. national wealth

  2. national stock

  3. national capital

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

Stock of man made goods (like machines) as well as natural resources(like land) ,resources like capital -is called national wealth All are referred as national assets.

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

Which of these indicate increase in welfare of the people? 

  1. Increase in production of war time equipments.

  2. Increase in production of foodgrains

  3. Spurt in smuggling activities

  4. Increase in production of heroine, smack etc.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The increase in production of food grains indicates the increase in the welfare of the people. This is because it will directly benefit the people as they have a satisfactory level of food grains. The other options do not help the people of the economy as either these activities are illegal or they do not directly help in the production of food for the people to eat.