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

Price mechanism incorporates _________ in a market economy.

  1. rigidity

  2. flexibility

  3. severity

  4. complexity
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 sector i.e. demand will increase if price decreases and vice-versa. Therefore, it adds more flexibility to the market economy because in market economy prices affect by the forces of demand and supply.  

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

Factor remunerations are the payments made by the consumer to purchase services from a firm.

  1. True

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

Factor remuneration refers to the payments which are done by the production sector to the private sector for hiring factor service i.e. capital, labour, land, and entrepreneurship in the form of interest, wages, rent, and profits respectively. 

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

Goods markets are those markets where ___________ are brought and sold.

  1. goods

  2. services

  3. both A & B

  4. neither A nor B
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Goods market refers to the market where goods and services which are required by the consumers are bought and sold against a common monetary measure i.e. rupees in case of India. 

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 ____________ economy, the producer operates with the objective of profit-maximisation.

  1. planned

  2. socialist

  3. free-enterprise

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

In a free enterprise 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 the survival of the fittest due to which profit maximization becomes the ultimate motive of all the producing sector. 

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

Which among the following is a function of price mechanism?

  1. Determination of savings in the economy.

  2. Determination of the level of economic activities.

  3. Guiding force for producers and consumers.

  4. All of the above.
Reveal answer Fill a bubble to check yourself
D 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 sector i.e demand will increase if price decreases and vice-versa which determines the level of economic activity i.e. profitable activities in the economy with the accurate savings in the economy. 

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

Which of the following conditions are required for price mechanism to operate in an economy?

  1. Existence of competition

  2. No government intervention

  3. Mobility of resources

  4. All of the above
Reveal answer Fill a bubble to check yourself
D 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 sector i.e demand will increase if price decreases and vice-versa. Therefore for price mechanism to operate smoothly, government intervention needs to be avoided with free flow of all the resources required for the production of the demanded commodities.  

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 conditions that are a pre-requisite for the price mechanism to operate.

  1. Cost should reflect the sacrifice made in terms of resources.

  2. Producers should be able to anticipate demand correctly.

  3. Demand should reflect needs of the people.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D 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 sector i.e demand will increase if price decreases and vice-versa. Therefore, price mechanism will operate only when the producer sector will efficiently anticipate the demand by the needs of the people and supply the commodities where cost in the generation of the commodities must be reflected in terms of opportunity cost. 

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 will operate only when the market is regulated by the government.

  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

Producers compete with each other in capitalist economy to produce those goods and services which yield _________.

  1. no profits

  2. higher profits

  3. lower profits

  4. no loss
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Capitalist economy has private ownership where utilization of resources takes place for private gains therefore in this kind of economy only those goods are produced which are in high demand in the market which is leads to open competition in the market where all the producer compete with each other to yield higher profits. 

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

Who determines what will be produced in a capitalist economy which is reflected by their spending pattern?

  1. Consumers

  2. Banks

  3. Government

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

Capitalist economy has private ownership where utilization of resources takes place for private gains. Therefore in this kind of economy only those goods are produced which are in high demand in the market which is directly governed by the consumers.