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 business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics
Scarcity of resources exists ___________.

  1. at the micro level

  2. at the macro level

  3. both A & B

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

Scarcity of resources exist at both the macro and micro levels due to never ending human wants. In the situation of scarcity of resources, at macro level, the economy is able to maximize the welfare along with the rapid pace of economic growth. While, at micro level, an individual maximizes his satisfaction as consumers and maximizes his profit as producers.

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

Which of the following includes entrepreneurs cost of production?
I. Wages of labour
II. Interest of capital
III. Cost of raw materials
IV. Depreciation of capital goods 

  1. I and II are correct

  2. II and III are correct

  3. II and IV are correct

  4. All are correct
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Entrepreneurs' cost of production includes-
1) wages of labour
2) interest of capital(amount of money invested)
3) depreciation of capital goods like machinery
-as all these are to be bear by the entrepreneur or the business entity.
Multiple choice economics environment and sustainable development need for sustainable development environmental economics sustainable development

About $23\%$ of energy consumed is obtained from ________ sources.

  1. commercial

  2. non-commercial

  3. both (a) and (b)

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

In many economic contexts regarding India's energy consumption, non-commercial sources (like firewood and dung) account for a significant portion of energy used in rural areas, often cited around 20-25 percent.

Multiple choice economics employment: growth, informalisation and other issues measures to alleviate unemployment unemployment measures unemployment and employment generation

Unemployment insurance results in _______________.

  1. Maintenance of consumption level

  2. Decrease in savings

  3. Decrease in consumption level

  4. Increase in savings
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Unemployment insurance provides a financial safety net for individuals who have lost their jobs. This allows them to maintain their standard of living and consumption levels during periods of joblessness.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The manufactured goods are called _______.

  1. physical capital

  2. consumers

  3. utility

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

Manufactured goods such as machinery, buildings, or computers, etc.,  are called the physical capital. In economic theory, physical capital is one of the three primary factors of production.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

"All those man-made goods which are used in further production of wealth." This is the definition of _________.

  1. goods

  2. production

  3. capital

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

Capital can be used over a long period of time. When used efficiently over a long period of time it will generate wealth for the entrepreneur. 

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

Money, fuels, etc. are the examples of _________ capital.

  1. trade capital

  2. fixed capital

  3. sunk capital

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

Floating capital, also known as circulating capital, refers to assets that are used up or transformed during the production process, such as raw materials, fuel, and cash.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

Capital which is invested in the private sector or by people privately is known as ____________.

  1. public capital

  2. private capital

  3. national capital

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

Private capital refers to that capital which is invested in the private sector or by people privately. This capital is used to generate income for the people operating in the private sector.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

The capital which directly helps in the production of goods, e.g. machines, tools, factories, etc. is termed as ____________.

  1. consumption capital

  2. production capital

  3. private capital

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

Production capital refers to that capital which is associated with the production mechanism directly. It is used in the process of production in the physical form, i.e, in the form of machines, tools, etc.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

When the capital is obtained from foreign countries and used in our country, it is called ___________.

  1. external capital

  2. internal capital

  3. national capital

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

Capital obtained from foreign sources and invested domestically is classified as external capital, as opposed to internal capital generated within the country.

Multiple choice economics concept of consumption function, saving function and investment function capital economy of a village wealth, capital and money

All those items that yield income to the society e.g. machinery, plant, factories, farms, canals, railways, mines, etc. are called ___________.

  1. trade capital

  2. social capital

  3. personal capital

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

Machinery, plant, factories, canals, railways, mines, etc is the infrastructure that assists in yielding income for the society. Thus, they are known as social capital.