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

Directions: Fill in the blanks with the suitable option.

Research in the work place reveals that people work for many reasons ________

  1. money beside

  2. money besides

  3. beside money

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

The preposition 'besides' means 'in addition to' or 'other than,' which correctly completes the thought that people work for reasons beyond money. 'Beside' (without -s) refers only to physical position next to something. The correct word order places 'besides money' at the end for natural flow.

Multiple choice

Which of the following can lead to an increase in supply of sugar?

  1. A decrease in the number of sellers selling sugar

  2. A decrease in price of sugarcane

  3. An increase in consumer's income

  4. Improvement in the technology used in production of sugar

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

This answer is correct because efficient technology will lead to an increase in production.

Multiple choice

Analysts reported [a]the economy it is[b] moving in a steady[c], upward direction[d].

  1. a

  2. b

  3. c

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

The reported clause should not include the redundant pronoun 'it' with the verb 'is'. The correct structure is 'reported that the economy is moving' or 'reported the economy was moving' - the 'it is' creates an incorrect relative clause structure. The subject 'economy' already follows 'that', so adding 'it is' is grammatically incorrect.

Multiple choice

The tire industry [a]is constantly searching to [b]alternative rubber sources as[c] conventional sources are dwindling.[d]

Find out the part having error

  1. a

  2. b

  3. c

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

The verb 'search' when followed by the object being sought requires the preposition 'for', not 'to'. We search 'for' something, not search 'to' something. The correct phrase is 'searching for alternative rubber sources'. Other options use correct prepositions.

Multiple choice

After analyzing[a] the steep rise in profits [b]according to your explanation, we were convinced[c] that your analyses was correct[d].

Find out the part having error

  1. a

  2. b

  3. c

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

The subject 'analyses' is plural, but the verb 'was' is singular. This creates a subject-verb agreement error. The correct verb form is 'were' to match the plural subject 'analyses'. The phrase 'that your analyses were correct' would be grammatically sound. Other options use correct subject-verb agreement.

Multiple choice

_______ the work was hard, the wages were three times as much as could be earned on field work.

  1. though

  2. yet

  3. but

  4. in spite of
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

'Though' is a subordinating conjunction that can start a sentence to show contrast. 'Yet' and 'but' are coordinating conjunctions that typically connect two independent clauses (they'd come after the first clause, not at the start). 'In spite of' is a prepositional phrase that needs a noun phrase following it, not a clause.

Multiple choice

The ideal location for setting up an iron and steel industry is near the

  1. Source of water

  2. Transport routes

  3. Equable climate

  4. Source of raw materials

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

Iron and steel plants are located near raw material sources (coal, iron ore, limestone, manganese) because these raw materials are extremely heavy and bulky. Transporting them over long distances would be prohibitively expensive, so locating near mines significantly reduces production costs and improves efficiency.

Multiple choice

OTCEI is:

  1. Atomic submarine

  2. Producer

  3. Retailer

  4. On all stages between production and final sale.
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice

The weight of mining sector in the Industrial Production Index is

  1. 10·169%

  2. 22·42%

  3. 11·46%

  4. 44·44%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The weight of the mining sector in the Industrial Production Index is 10.169%. The IPI assigns different weights to various industrial sectors based on their contribution to total industrial output, with mining having approximately this percentage.

Multiple choice

Directions: Choose the appropriate word from the given options and fill in the blank. Productive employment is the only ----------------- solution to poverty in any country.

  1. sustainable

  2. necessary

  3. satisfactory

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

Sustainable means a solution that can be maintained over the long term without depleting resources or causing harm. Productive employment provides ongoing income and economic stability, making it the only enduring solution to poverty. Necessary means simply required, not necessarily lasting. Satisfactory implies barely adequate, while required is similar to necessary.

Multiple choice

Greenfield investment is

  1. the investment made in the purchasing of green fields

  2. the investment made in the plantations of trees

  3. the establishment of a new manufacturing plant, workshop, office etc. by a firm

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

Greenfield investment refers to establishing entirely new facilities (plants, offices, workshops) rather than acquiring or expanding existing ones. It is not about literally investing in green fields or tree plantations. The term comes from starting on 'greenfield' sites where no previous facilities existed.

Multiple choice

Within the business market, handle bars purchased by bicycle manufacturers are the examples of

  1. component parts

  2. supplies

  3. raw materials

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

Component parts are finished items that become part of the final product without further processing - like handle bars that attach directly to bicycles. They differ from raw materials (unprocessed inputs like steel), supplies (maintenance items like lubricants), and accessory equipment (tools used in production but not part of the final product). Handle bars are manufactured components ready for assembly.

Multiple choice

Directions: Choose the appropriate option (1) - (4).

The dough is put into a mould

MASS PRODUCTION
Long ago goods were manufactured by craftsmen, who were skilled workmen. A craftsman was proud of each article he made. He spent a long time in making it and took great care over its manufacture, and people paid a high price for it when it was finished. All the luxurious Persian carpets, the beautiful Chinese pottery and the handmade laces of certain European countries were made this way. But these articles were bought only by the rich. Poorer people had to be satisfied with goods that were roughly and cheaply made.
When the population increased, there was a demand for goods of better quality. These goods had to be produced in factories and workshops where hundreds of workers were employed. The invention of the steam engine helped manufacturers by giving them cheaper power to work their machines. Machines took the place of men.
Production was increased. People were able to buy articles of good quality at low prices. The age of mass production means the manufacture of a large number of identical articles by the use of machinery. Cars, radios and cameras are examples of the many types of articles that are mass–produced today.
A conveyor belt plays a large part in mass production. By means of the conveyor belt which moves continuously, articles are conveyed from point to point during the various stages in their manufacture. A lot of time is saved in this way.
A visit to a factory is an interesting experience. Take, for example, a biscuit factory. The whole process of biscuit making is done by machinery. First of all, the ingredients such as flour, sugar, fat and water are put into a mixing machine. The mixture comes out of the mixing machine in the form of dough and is passed on to machine that processes the dough into moulds.
In these moulds the dough is given the shape of biscuits. Then the biscuits are carried by a conveyor belt to the oven. As they move through the oven they are slowly cooked. When they are cool, they are taken off the moving belt by workers and packed into boxes. The boxes are weighed, made airtight and wrapped. Then they are ready to leave the factory.

  1. after it is cooked

  2. before it is cooked

  3. when the ingredients are being mixed

  4. when it is not wet
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Hint: Para-5 �In these moulds the dough is given the shape of biscuits. Then the biscuits are carried by a conveyor belt to the oven.�