Tag: government budget and economy

Quizzes (6) Questions (228)

Questions Related to government budget and economy

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

The slope of the indifference curve is called __________.

  1. opportunity cost ratio

  2. MRTS

  3. MRS

  4. $\dfrac{P _x}{P _y}$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The slope of an indifference curve at any point is defined as the Marginal Rate of Substitution (MRS), which represents the rate at which a consumer is willing to trade one good for another while maintaining the same level of utility.

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

L-shaped indifference curve exists in case two goods are ____________.

  1. perfect complements

  2. perfect substitutes

  3. substitutes

  4. not related
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Perfect complements are goods that must be consumed in fixed proportions, resulting in L-shaped indifference curves where the vertex represents the optimal combination.

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

When indifference curve is straight downward sloping line, the two goods are _________.

  1. not related

  2. complements

  3. perfect substitutes

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

When goods are perfect substitutes, the consumer is willing to trade them at a constant rate, resulting in a straight-line indifference curve with a constant slope.

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

What is that one effect which Marshall ignored but Hicks took into account?

  1. Income effect

  2. Substitution effect

  3. Price effect

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

Marshall focused primarily on the substitution effect in his analysis of demand, while Hicks explicitly incorporated the income effect to provide a more complete decomposition of the price effect.

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

The budget in which its tax revenue and expenditure are equal is called ____________.

  1. surplus budget

  2. balanced budget

  3. unbalanced budget

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

Balanced budget refers to a situation where the budget expenditure of the government on tax is equal to the budget revenue of the government from tax paid by the public.

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

Excess of total expenditure over total receipts is known as __________.

  1. budgetary deficit

  2. revenue deficit

  3. fiscal deficit

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

Budgetary deficit also known as government deficit refers to a situation when the budget expenditure of the government are greater than the budget revenue of the government due to which the expenses exceed the revenue. 

Multiple choice business economics and quantitative methods government budget and economy consumer's budget public finance indifference curve

Write true or false with a reason:
Increase in income of the consumer is the only cause that leads to a parallel shift of budget line to the right.

  1. True

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

Budget line shifts to right

(i) when income of consumer increases assuming price of two goods remains unchanged, and 
(ii) when there is proportionate fall in the prices of two goods, income of the consumer remaining unchanged.