Tag: major economic problems

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Questions Related to major economic problems

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems
PPC shows an increasing slope.

  1. True

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

The slope of production possibility curve shows the marginal opportunity cost which refers to the additional sacrifice that an economy must make when they shift resources and technology from production of one commodity to the other. Since resources are use specific, therefore, each time when one more unit of a commodity is produced a larger quantity of the other commodity is required to be sacrificed. This results in increasing marginal opportunity cost., which is denoted by the slope of the PPC.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems
Choice between 'production for the poor' and 'production for the rich' refers to the problem of 'what to produce'.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Choice between 'production for the poor' and 'production for the rich' refers to the problem of 'for whom to produce' where the product is produced keeping in mind the the end users of the product whereas 'what to produce' relates with the production of goods that are in high demand in the economy irrespective of poor or rich class. 
Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

Economic problem arises when ____________.

  1. wants are unlimited

  2. resources are unlimited

  3. alternative uses of resources

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

The central economic problems rise for the basic fact that the resources in the economy is scarce with many alternative uses whereas the wants are unlimited. Therefore, it deals with the efficient allocation of the resources for the production of goods and services in the economy. 

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

The problem of resource allocation would not arise if resources had no alternatives uses.

  1. True

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

Economics deals in the problems of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants because these resources are scarce and have alternative uses whereas human wants are unlimited

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems
When output of Good - $1$ increases from $100$ units to $110$ units and output of Good - $2$ decreases from $400$ units to $350$ units, marginal opportunity cost = $50$ units.

  1. True

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

Marginal opportunity cost $= \dfrac{\triangle \,\text{Loss of output of Good - 2}}{\triangle\, \text{Gain of output of Good - 1}} = \left[\dfrac{50}{10} = 5\right]$

Marginal opportunity cost $=5$. 

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

If there were no choices in resource allocation, microeconomics would not have existed.

  1. True

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

Micro economics deals with solving the central problem of the economy which deals with resource allocation. It is the study of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants. This is because these resources are scarce and have alternative uses whereas human wants are unlimited.

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

Lack of scarcity implies lack of economic problem.

  1. True

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

Economics deals in the problems of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants. This is because these resources are scarce and have alternative uses whereas human wants are unlimited.