Tag: economics

Quizzes (361) Questions (3598)

Questions Related to economics

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

___________ markets are those markets where factor services are bought and sold.

  1. Factor

  2. Service

  3. Production

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

Factor market refers to those market where factor services i.e. factors of production like capital, land, labour, and entrepreneurship are bought and sold against some factor payments like interest, rent, wages, and profit.

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Price mechanism operates in a ___________ economy

  1. socialist

  2. free-enterprise

  3. mixed

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

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa. Therefore for price mechanism to operate, the market should be free from all types of interventions. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

In a free-market economy, the services of ___________ are available only at some price.

  1. government

  2. factors of production

  3. housewives

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

In a free market economy, prices of commodities in the market are affected by the forces of demand and supply that generates open competition in the market which leads to optimum allocation and utilization of resources because the prices of the factor of production depends upon the demand and supply of the commodities produced by it. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

______________ is the mechanism in which prices play a key role in directing the activities of producers, consumers and resource suppliers.

  1. Price mechanism

  2. Market mechanism

  3. Production mechanism

  4. Demand-supply mechanism
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa. It also regulates the supply of resources in the economy as more resources are supplied if there is more demand for the commodity produced using it. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Forces of demand and supply operate within the framework of a/an __________.

  1. economy

  2. market

  3. nation

  4. government
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa which generates within the framework of a market.

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Price helps in determining the allocation of scarce resources in the economy.

  1. True

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

In a market economy, prices of commodities in the market are determined by the forces of demand and supply that generates open competition in the market which leads to optimum utilization of scarce resources as the resources are utilized keeping in mind the demand by the consumer sector and profit made by it.  

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Identify the functions of price mechanism in a market economy.

  1. Coordination of economic decisions.

  2. Allocation of resources in the economy.

  3. Determination of factor incomes.

  4. All of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Functions of price mechanism in a market economy are :-
a) Coordination of economic decisions.b) Allocation of resources in the economy.
c) Determination of factor incomes.
Price mechanism can be defined as a process of determining the price of goods and services in the market using demand and supply forces.
Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

___________ helps consumers to determine the level as well as the composition of consumption expenditure.

  1. Market supply

  2. Price mechanism

  3. Income level

  4. Both A & C
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In price mechanism, prices of commodities in the market are affected by the forces of demand and supply that generates open competition in the market which leads distribution of goods and services according to the purchasing power of an individual where the consumers have freedom of choice between how much they will spend on consumption of goods and services. 

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Price mechanism functions under the control of a specific controlling agency in the economy.

  1. True

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

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa. Therefore for price mechanism to operate, the market should be free from all types of interventions.

Multiple choice economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

____________ is fundamental to the operation of a free-enterprise economy.

  1. Price legislation

  2. Government intervention

  3. Price mechanism

  4. Both B & C
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and the demand by the consumer sector i.e demand will increase if price decreases and vice-versa. Therefore for price mechanism to operate, the market should be free from all types of interventions.