Economics · General Awareness

Economics Concepts and Theories

1,710 Questions

Review fundamental and advanced economics concepts through this structured question bank. The topics include macroeconomics, fiscal policy, international trade theories, and economic regulation. These questions are ideal for candidates preparing for civil services and other administrative competitive examinations.

Macroeconomics fundamentalsInternational trade theoriesFiscal policy debatesEconomic regulationLabor theory of value

Economics Concepts and Theories Questions

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

The concept of consumer's surplus is useful in _______.

  1. distinguishing between Value-in-use and value-in-exchange.

  2. comparing the advantages of different places.

  3. useful in cost benefit analysis of projects.

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

Consumer surplus is a versatile concept used in welfare economics to distinguish value-in-use from value-in-exchange, compare economic advantages, and perform cost-benefit analysis for public projects.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

If a fall in price of 'Y' result in a decrease in the sale of 'X', the two goods appear to be _____________.

  1. substitutes goods

  2. complementary goods

  3. inferior goods

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

If a fall in the price of Y leads to a decrease in the sale of X, it means they are substitutes. Consumers switch from X to Y when Y becomes cheaper.

Multiple choice economics theory of supply elasticity of supply supply - law of supply and price elasticity of supply law of supply and elasticity of supply

Usually, the demand for commodities, the consumption of which can be postponed, has an _________ demand as the prices rise and expected to fall again.

  1. elastic

  2. inelastic

  3. unitary

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

If consumption can be postponed, consumers are more sensitive to price changes (they will wait for prices to fall), making the demand elastic.

Multiple choice history what is history? historiography in the west historiography: development in the west historiography: indian tradition

If you are interested in knowing the economic history of a period, which of  the following sources can help you the most ?
a. Coins
b. holy texts
c. inscriptions
d. architecture
Find the alternative that indicates the correct set.

  1. a, b, c

  2. b, c, d

  3. a, c, d

  4. a, b, d
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Coins, inscriptions and architecture help to know about the economic history as they present the economic activities of a state.

Multiple choice history economic system and economic policies american dominance, neo-imperialism and new economic policy insights on lpg changing economic policies

Which of the following most closely approximates our definition of oligopoly?

  1. The cigarette industry

  2. The barber shops

  3. The gasoline stations

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

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Because there are few sellers, each oligopolist is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Business that are part of an oligopoly, share some common characteristics: they are less concentrated than in a monopoly, but more concentrated than in a competitive system. This creates a high amount of interdependence which encourages competition in non-price-related areas, like advertising and packaging. The tobacco companies, soft drink companies, and airlines are examples of an imperfect oligopoly.

Multiple choice civics consumers' awareness consumer protection act of 1986 need for consumer awareness consumer : satisfaction and protection

In a Free Market Economy the allocation of resources is determined by.

  1. Votes taken by consumers

  2. A Central Planning Authority

  3. Consumer Preference

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

In a free market economy, the forces of supply and demand, driven by consumer preferences, determine the allocation of resources.

Multiple choice civics consumers' awareness consumer protection act of 1986 need for consumer awareness consumer : satisfaction and protection

In an economy, people have the freedom to buy or not to buy the goods offered in the market place, and this freedom to choose what they buy dictates what producers will ultimately produce. This condition is called.

  1. Economic Power of Choice

  2. Consumer Sovereignty

  3. Positive Economy

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

Consumer sovereignty is the economic theory that consumer preferences determine the production of goods and services in an economy.

Multiple choice business organisation and correspondence meaning and factors of business environment dimensions of business environment business environment and its dimensions business environment

Which of the following is an example of social environment?

  1. Money supply in the economy

  2. Consumer protection Act

  3. The Constitution of the country

  4. Composition of family
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Composition of family is an example of social environment. Social environment consists of the customs and traditions of the society in which business is existing. It includes the standard of living, taste, preference and education level of people living in the society where business exists.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

"Determination of wage rate, distribution of national income" was the theory given by?

  1. Adam smith

  2. A. marshall

  3. Ricardo

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

Alfred Marshall is widely recognized for his work in neoclassical economics, including the theory of distribution and the determination of factor prices.

Multiple choice business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

In economics, a state of balance is called ________________.

  1. saturation point

  2. stability point

  3. profit maximising point

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

In economics, equilibrium is the state where market forces, such as supply and demand, are balanced, and there is no tendency for the price or quantity to change.

Multiple choice business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

Aggregate demand consists of consumption and investment demand. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

True. Aggregate demand consists of consumption and investment demand. Aggregate demand is the demand of total goods and services in the economy as it is impossible to count all the physical quantities the total expenditure on all goods and services are taken into account. Aggregate demand consists of expenditure on household consumption, Private investment, Government expenditure on consumption and investment and imports and exports.  

Multiple choice business economics and quantitative methods foreign trade in india the government and economic development indian economy on the eve of independence impact of technology on livelihoods

According to Keynesian theory of income determination, at full employment, a fall in aggregate demand lead to a ___________.

  1. fall in prices of output and resources

  2. fall in real gross national product and employment

  3. rise in real gross national product and investment

  4. rise in prices of output and resources
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In the Keynesian model, if aggregate demand falls at full employment, the resulting surplus of goods and labor exerts downward pressure on prices and wages.

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Price mechanism operates in a ___________ economy

  1. socialist

  2. free-enterprise

  3. mixed

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

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa. Therefore for price mechanism to operate, the market should be free from all types of interventions. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

In a free-market economy, the services of ___________ are available only at some price.

  1. government

  2. factors of production

  3. housewives

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

In a free market economy, prices of commodities in the market are affected by the forces of demand and supply that generates open competition in the market which leads to optimum allocation and utilization of resources because the prices of the factor of production depends upon the demand and supply of the commodities produced by it. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Forces of demand and supply operate within the framework of a/an __________.

  1. economy

  2. market

  3. nation

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

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa which generates within the framework of a market.