Tag: economics of development and planning

Questions Related to economics of development and planning

When Total Revenue equals Economic Costs, it means that the firm________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Has No-profits-No-Loss

  2. Earns Normal Profits

  3. Earns more than Normal Profits (i.e. Super -Normal Profits)

  4. Incurs Looses in the accounting sense

Show answer
Correct Option: B
Explanation:

Accounting profit is the monetary costs a firm pays out and the income a firm receive. It is the accounting profit, and it is higher than economic profit. 

Accounting profit = total monetary revenue- total costs. 

Economic profit is the monetary costs and opportunity costs a firm pays and the revenue a firm receives.The level of profit that occurs when total revenue is equal to total cost. This stage indicates that a firm is doing just as well as it would have if it had selected to use its income to produce a different product or struggle in a different industry.

Common profit is also known as zero monetary profit.

Thus, the correct option is B.

An indifference curve slopes down towards right since more of one commodity and less of another result in.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Same satisfaction

  2. Greater satisfaction

  3. Maximum satisfaction

  4. Decreasing expenditure

Show answer
Correct Option: A
Explanation:

An indifference curve slopes down towards right since more of one commodity and less of another result same satisfaction to the consumer.

Internal Economies and Diseconomies arise due to ________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Overall industry-level changes

  2. Changes at the Firm level

  3. Both (a) and (b)

  4. Neither (a) nor (b)

Show answer
Correct Option: B
Explanation:

Internal Economies and Diseconomies arise due to changes at the Firm level.Internal Economies and Diseconomies in operations depend on the internal factors within the firm.
Internal Economies or diseconomies can be defined as a situatiion when the production of the firm gets affected because of the internal factors of the firm only.

If all inputs are trebled and the resultant output is doubled, this is a case of____________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Constant returns to scale

  2. Increasing returns to scale

  3. Diminishing returns to scale

  4. Negative returns to scale

Show answer
Correct Option: C
Explanation:
If all inputs are trebled and the resultant output is doubled, this is a case of diminishing returns to scale.
Diminishing return to scale can be defined as a situation when there is an increase in input causes a less proportional increase in output than the input. It is a type of effect which can be seen in the short run period when we increase inputs.

A decrease in the demand for cameras keeping other things the same results in ________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Increase the number of cameras bought

  2. Decrease the price but increase the number of cameras bought

  3. Increase the price of cameras

  4. Decrease the price and also the number of cameras bought

Show answer
Correct Option: D
Explanation:

Decrease in demand will decrease the price and quantity both.

Cross holding method of Disinvestment refers to ____________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Government selling part of its Shares in one PSU to other PSUs

  2. Government selling Shares of PSUs to Public Sector Financial Institutions & Banks

  3. Government's own Financial Institutions buying Government's stake in select PSU's and holding them until any third buyer emerges

  4. None of the above

Show answer
Correct Option: A
Explanation:

Cross holding method of Disinvestment refers to Government selling part of its Shares in one PSU to other PSUs.The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies.Disinvestment means selling of Public investment to a Private entrepreneur.Disinvestment of the public sector can be defined as a process of transferring the ownership of any enterprise from public to private sector.

Which of the following is a function of an entrepreneur?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Initiating a business enterprise

  2. Risk bearing

  3. Innovating

  4. All of the above

Show answer
Correct Option: D
Explanation:

An entrepreneur has to initiate a business enterprise, bear the risk and innovate new products.

The term disinvestment is more popularly used ____________________________.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Where a holding company sells shares of a Subsidiaray company

  2. Where an investment company off loads its holding

  3. Where central / State government sells its holdings of public sector companies

  4. None of the above

Show answer
Correct Option: C
Explanation:

The term disinvestment is more popularly used where central/ state government sells its holdings of public sector companies.Disinvestment means selling of Public investment to a Private entrepreneur.Disinvestment of the public sector can be defined as a process of transferring the ownership of any enterprise from public to private sector.

Comforts lies between the.

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Inferior goods and necessaries

  2. Luxuries and inferior goods

  3. Necessaries and luxuries

  4. None of the above

Show answer
Correct Option: C
Explanation:

Comforts lies between necessaries and luxuries because comforts refer to those goods which are not required for a happy living.

Which of the following goods is likely to have perfectly inelastic demand?

organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

  1. Car

  2. Salt

  3. Cabbage

  4. Sugar

Show answer
Correct Option: B
Explanation:

'Salt' have perfectly inelastic demand.