Tag: prices and cost of living

Quizzes (5) Questions (50)

Questions Related to prices and cost of living

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

Which of the following is not a main approaches to Pricing of commodities.

  1. Classical Ecoomists

  2. Australian approach

  3. Marshall approach

  4. Neo-classical economist
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Classical, Marshallian, and Australian approaches are recognized frameworks in economic pricing theory. Neo-classical is a broad school of thought rather than a specific 'approach to pricing' in the context of commodity pricing literature.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

Which of the following method of constructing index number satisfies time reversal test.

  1. Laspeyres index

  2. Fishers Ideal index

  3. Paasches index

  4. All the three
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Time Reversal Test requires that the index number calculated forward equals the reciprocal of the index calculated backward. Fisher's Ideal Index is the geometric mean of Laspeyres and Paasche indices and is mathematically proven to satisfy this test.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

The paradox of value means that _____________________.

  1. people are irrational in consumption choices

  2. the total utilities yielded by commodities do not necessarily have relationship to their prices

  3. value has no relationship to utility schedules

  4. free goods are goods that are essential to life.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The paradox of value, also known as the diamond water paradox, is a contradiction which means that the total utilities yielded by commodities do not necessarily have relationship to their prices. We see that though water is available in abundance and it so useful and essential for survival yet it costs much lower than diamond which is just a luxury item costs much higher price in the market. This paradox discusses the concepts of value in use and value in exchange. The things which have the greatest value in use have little or no value in exchange; whereas those which have the greatest value in exchange have frequently little or no value in use.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

When a relationship between DMU of a product and its prices is decided than it helps in determining __________.

  1. total marginal value of a product

  2. average utility of product

  3. price of product in market

  4. total utility value of product
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When the diminishing marginal utility is set in the market then that is compared with various prices in the market for the commodity which decides the ideal price for the commodity in the market which the consumer is willing to pay if they get required utility from the product. 

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

A capitalist economy uses_____as the principal means of allocating resources.

  1. Demand

  2. Supply

  3. Efficiency

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

In a capitalist economy, personal gains are given more preference than social welfare. Therefore, allocating of resources takes place on the basis of what value it will yield after production and this done through prices.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

Prices rate is determined on the basis of demand and supply, such kind of an economy is?

  1. Market driven economy

  2. Closed economy

  3. Seller driven economy

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

The demand and supply of a commodity prevails in the market, so if their are changes in the price of the commodity due to change in its demand and supply in the market then it is said that market influences the price rate in the economy.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

Administered prices means:

  1. Prices fixed by private sector under the guidance of government

  2. Prices fixed by consumer forums

  3. Prices fixed by the Government and private sector

  4. Prices level fixed by the Government
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Administered prices are prices set by a government authority rather than being determined solely by market forces of supply and demand. This is often done to protect consumers or ensure stability in essential goods.