Tag: economic reconstruction

Quizzes (7) Questions (82)

Questions Related to economic reconstruction

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

One country enjoys a comparative advantage over the other in producing oil when _______________.

  1. it has more oil than the other country

  2. it can produce oil at a lower opportunity cost than the other country

  3. it does not need to import oil

  4. it wants to export as much oil as possible
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

One country enjoys a comparative advantage over the other in producing oil when it can produce oil at a lower opportunity cost than the other country .The country enjoys a greater advantage over other countries if the opportunity cost of producing oil in that country is less than others.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Central problem for every economy includes ________.

  1. Market

  2. What to produce?

  3. Competition

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

Central problem for every economy includes: What to produce?

Production, distribution and disposition of goods and services are the basic economic activities of life. In the course of these activities, every society has to face scarcity of resources. Because of this scarcity, every society has to decide how to allocate the scarce resources.

It leads to following Central Problems that are faced by every economy:

1. What to produce?

2. How to produce?

3. for whom to produce?

These problems are called central problems because these are the most basic problems of an economy and all other problems revolve around them.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

How many indifference curves can touch the price line?

  1. Two

  2. One

  3. As many as possible

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

The consumer achieves equilibrium at a point which is in the highest possible indifference curve and which fits the budget of the consumer given the prices of both the commodities. Such a point is only possible when the budget line is tangent to the indifference curve. Therefore, only one indifference curve can touch the budget line. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Which of the following is not one of the central questions that the study of economics is supposed to answer?

  1. Who produces what?

  2. When are goods produced?

  3. Who consumes what?

  4. How are goods produced?
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The central problem of an economy does not deal with the time of production as it is assumed that human wants are unlimited and goods are required throughout the year. Therefore, the the problem of 'When to produce?' is not regarded as a central problem of the economy.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Which of the following is a cause of economic problem?

  1. Scarcity of Resources

  2. Unlimited Wants

  3. Alternatives Uses

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

Causes of Economic Problem:

(i) Unlimited Wants

Human wants are unlimited in numbers. There is no end of human wants; whenever one want is satisfied, automatically the other wants crop up and this goes on and on. There are several wants which are recurring in nature like, food, clothes, shoes, etc. Moreover, human wants are increasing day by day with the development of education, knowledge and civilisation.

(ii) Limited Resources:

In economics, scarcity means that commodities and resources to produce goods and services are less in relation to their demand. Goods and services that satisfy human wants are produced with the help of resources such as land, labour, capital and enterprise. These resources are scarce while wants are unlimited. Due to scarcity of these resources, an economy cannot produce all that goods and services as required by its citizens. Consequently, some wants remain unsatisfied.

(iii) Alternative Uses of Resources:

Means are not only limited but also have alternative uses. Hence, choice has to be made for different alternative uses. For example, electricity can be used for lighting lamps or for cooking food or for operating TV, Fridge, music system etc. Similarly, there are many resources which have got their alternative uses. This characteristic makes resources scarce. Thus, every economy has to choose better alternative uses of resources to which they can be put.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

In the decision of "how to produce", what must the economy decide on?

  1. Types of goods to be produced.

  2. Quality of goods to be produced.

  3. Consumer goods and capital goods.

  4. Method of production.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The question for "How to produce?" is faced by the economy. Here they should consider both labour intensive techniques as well as capital intensive techniques depending upon the available resources in the economy.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

The central problem in economics is that of:

  1. Comparing the success of command versus market economies.

  2. Guaranteeing that production occurs in the most efficient manner.

  3. Guaranteeing a minimum level of income for every citizen.

  4. Allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied, so as to maximise utility.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Economics is the study that establishes an effective relationship between unlimited wants and the availability of scarce resources to overcome the economic problem of limited resources so that all the unlimited wants are satisfied, so as to achieve maximum utility by the use of scarce resources. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Which of these is not a major economic problem in India?

  1. Over-population.

  2. Poverty.

  3. Unemployment.

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

Over-population is one of the biggest problem of Indian which give rise to many other economic problems like poverty as many people are not able to attain a comfortable lifestyle due to scarce resources and unemployment because due to overpopulation and limited jobs people remain unemployed. 

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

The signs of crisis which created the need for Economic Reforms in 1991 were ________________.

  1. Low Forex Reserves

  2. Huge National Debt

  3. Inflation

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
The signs of crisis which created the need for Economic Reforms in 1991 were:
a) Low Forex Reserves
b) Huge National Debt
c) InflationDuring 1991, Indian Government adopted New Economic Policy which emphasized liberalization, privatization and globalization. During 1991, the economic crisis arose due to many economic problems as the government was facing high fiscal deficit due to rising current account deficit which acted as two spiral rate which lead to heavy inflation in the economy. 
Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Scarcity can be avoided by limiting ______________.

  1. needs

  2. wants

  3. resources

  4. wants and needs
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In economics, sustainable development is given the upmost priority as it refers to fulfilment of current economic needs of the people without sacrificing the ability of the future generation to need their needs but if the scarce resources will be consumed in large amount then future generation will not be able to meet their needs and it will result in slower economic growth. Therefore, scarcity can only be cured by limiting needs and wants.