Tag: wealth, capital and money

Questions Related to wealth, capital and money

If India exports goods worth Rs.$20$ crores and imports goods worth Rs.$30$ crores, it will ________________.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. have a surplus of Rs$10$ crores in balance of trade

  2. have a deficit of Rs$10$ crores in balance of trade

  3. have a deficit of Rs$50$ crores in balance of trade

  4. can't say

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Correct Option: B
Explanation:

BOT =  export - Import i.e. $20 - 30 = 10$ crore deficit.

When Price = Rs. 20, quantity is demanded 9 units, and when Price = Rs. 19, quantity demanded is 10 units. What is the Marginal Revenue resulting from an increase in output from 9 units to 10 units?

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Rs. 20

  2. Rs. 19

  3. Rs. 10

  4. Rs. 1

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Correct Option: C
How are the two goods (apples and oranges) related when, as a result of rise in the price of apples, demand for oranges increases?
economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Substitute Goods

  2. Complementary Goods

  3. Normal Goods

  4. Inferior Goods

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Correct Option: A
Explanation:

A substitute good is a good that can be used in place of another. It is a good with a positive cross elasticity of demand.

This means a good's demand is increased when the price of another good is increased; both in the same direction.

For example, if apples and oranges are substitutes for a consumer, then if the price of apples increases, the consumer will buy less of apples and more of oranges. Thus, when price of apples increases, the demand for oranges will rise. 

Which of the following pairs represents substitute goods?
economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Car and petrol

  2. Juice and cold drink

  3. Bread and butter

  4. All of the above

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Correct Option: B
Explanation:

Juice and cold drinks can be taken in place of each other. Therefore,they are substitute goods as substitute goods are those goods where demand of one good rises when the price of another good gets increased.

Which one of the following is incorrect?

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. There are limited wants.

  2. Means are scarce.

  3. Resources have alternative uses.

  4. Economics is a science.

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Correct Option: A
Explanation:

Human wants are unlimited and resources are limited which leads to problem of choice. Thus the statement, 'there are limited wants' - is incorrect.

Inferior goods are those whose income effect is __________.
economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. negative

  2. positive

  3. zero

  4. none of the above

Show answer
Correct Option: A
Explanation:

An inferior good is a good whose demand decreases when consumer income rises. 

A normal good's demand increases when the income rises, thus its income effect is positive.

Hence, the income effect for inferior good is negative.

For example as a consumer's income increases, his/her demand of the cheap cars will decrease, while demand for costly cars will increase. Here the cheap car is an inferior good for that consumer.

"All that have got value are called wealth" is the statement of _____.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Adam Smith

  2. J.M. Keynes

  3. Marshall

  4. None of the above

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Correct Option: B
Explanation:

John Maynard Keynes, was a British economist. His ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the most influential economists of the 20th century and the founder of modern macroeconomics.

_____ is defined as "anything which is useful, directly or indirectly, for satisfying human wants".

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Wealth

  2. Income

  3. None of the above

  4. Both A and B

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Correct Option: A
Explanation:

Wealth is defined as "anything which is useful, directly or indirectly, for satisfying human wants". Characteristics of wealth include:

  • Externality is the quality of wealth which makes it valuable and able to be transferred.
  • Appropriability: Wealth should be appropriate. It should be capable of being possessed or owned by the people.
  • Transferability: Wealth should be transferred from one man to another. 

Wealth can be classified as _____.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Private Wealth

  2. Public Wealth

  3. National Wealth

  4. International Wealth

  5. All of these

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Correct Option: E
Explanation:

Wealth can be classified as personal wealth, social wealth or collective wealth, national wealth, and international wealth.

Personal Wealth (Individual Wealth): The wealth of a person consists of both material and non-material goods. Thus the wealth of the person includes such material things as land, houses, furniture, machinery and so on.

Social Wealth (Collective Wealth): Social wealth consists of all these goods that can be enjoyed by all members of a society. Social wealth includes public roads, public parks, public schools, government hospitals, public libraries, museums and so on.

National Wealth: National wealth includes individual wealth as well as the collective wealth of its members. That is, it includes besides individual wealth all kinds of public property, such as roads and canals, buildings and parks and water works.

Cosmopolitan Wealth: Cosmopolitan wealth is the wealth of the world. It belongs to no one nation in particular. A common example of cosmopolitan wealth is the ocean.

Wealth is  _______________ welfare.

economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

  1. Synonymous of

  2. Only a means to

  3. Antonymous of

  4. None of the above

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Correct Option: B
Explanation:

According to Marshall's definition, wealth is only a means to welfare. Marshall pointed out that for economics, wealth is not an end in itself but it is only a means to an end; the end being the promotion of human welfare. Thus, according to Marshall, wealth is only a secondary thing, it is man and his ordinary business of life which is the primary object of economic study. In fact, Marshall tried to make the study of economics an engine of social betterment.