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General Economics


Q.1. The LAC curve
(a) Falls when the LMC curve falls
(b) Rises when the LMC curve rises
(c) Goes through the lowest point of the LMC curve
(d) Falls when LMC < LAC and rises when LMC > LAC

Q.2. At shut down point :
(a) Price is equal to AVC
(b) Total revenue is equal to TVC
(c) Total loss of the firm is equal to TFC
(d) All of the above

Q.3. If as a result of change in price, the quantity supplied of the good remains unchanged, we say elasticity of supply is:
(a) Zero
(b) Between zero and one
(c) Infinite
(d) Between one and infinity

Q.4. The conditions of long-period equilibrium for the firm operative under perfect competition are:
(1) MC = MR
(2) AR = MR
(3) AC = AR
(4) AC = MC

(a) (1) only
(b) (1) and (2) only
(c) (1), (2) and (3) only
(d) (1), (2), (3) and (4)

Q.5. In a perfect competitive market
(a) Firm is the price giver and industry the price take
(b) Firm is the price taker and industry the price giver
(c) Both are the price takers
(d) None of the above

Q.6. If the price of Pepsi decreases relative to the price of Coke and Thumbs-Up, the demand for:
(a) Coke will rise
(b) Thumbs-Up will decrease
(c) Coke and Thumbs-Up will increase
(d) Coke and Thumbs-Up will decrease

Q.7. The difference between the price a consumer is willing to pay and the price he actually pays is called -
(a) Excess price
(b) Excess demand
(c) Consumer surplus
(d) Exploitation

Q.8. ‘Excess Capacity’ is the essential characteristic of the firm in the market form of :
(a) Monopoly
(b) Perfect competition
(c) Monopolistic competition
(d) Oligopoly

Q.9. ‘Personal disposable’ ‘income’ refers to :
(a) The income of the person after all personal taxes are deducted
(b) Total income earned by the person
(c) Personal taxes paid to the government
(d) Personal and indirect taxes paid to the government

Q.10. National income of a country is also known as :
(a) Gross National Product at market prices
(b) Net National Product at factor cost
(c) Gross Domestic Product at factor cost
(d) Net Domestic Product at Market prices

Q.11. The indifference curve approach does not assume :
(a) Rationality on the parts of consumers
(b) Ordinal measurement of satisfaction
(c) Consistent consumption pattern behaviour of consumers
(d) Cardinal measurement of utility

Q.12. The incidence of taxes refers to :
(a) The level and rate of taxation
(b) Who ultimately bears the money burden of the tax
(c) The growth of taxation
(d) The way in which a tax is collected

Q.13. Which of the following is an example of perfect competition?
(a) Market for agricultural goods
(b) Market for soaps
(c) Market for petroleum products
(d) Market for clothes

Q.14. The main objective of fiscal policy in developing countries is to :
(1) Promote economic growth
(2) Mobilise resources for economic growth
(3) Ensure economic growth and distribution
(4) Increase employment opportunities

(a) only 1 and 2 are correct
(b) only 2 and 3 are correct
(c) only 2 and 4 are correct
(d) 1, 2, 3 and 4 are correct

Q.15. Budgetary deficit can be expressed as:
(a) The excess of pubic expenditure over public revenue
(b) The sum of deficit on revenue account and deficit on capital account
(c) That portion of government expenditure which is financed through the sale of 91 days Treasury Bills and drawing down of cash balances
(d) All of the above

Q.16. A Government budget is defined as:
(a) A description of the fiscal policies of the government and the financial plans
(b) A financial plan describing estimated receipts and proposed expenditures and Disbursement under various heads
(c) Neither of the above
(d) Both (a) and (b) above

Q.17. ___ depicts complete picture of consumer’s tastes and preferences
(a) Budget line
(b) Average cost curve
(c) Indifference map
(d) Marginal revenue curve

Q.18. Human Development Index (HDI) is a composite index of :
(a) Health, literacy and employment
(b) National income, size of population and general price level
(c) National income, per capita income and per capita consumption
(d) Physical resources, monetary resources and population size

Q.19. The task of national income estimation to India is entrusted to the
(a) Indian Statistical Institute
(b) National Sample Survey Organization
(c) Central Statistical organization
(d) National Accounts Organization

Q.20. The marginal farmer in India is defined as a cultivator who :
(a) Does not own any land
(b) Workers on a land holding of less than one hectare
(c) Works on a land holding for wages
(d) Keeps shifting between agriculture and non-agriculture jobs

Q.21. The main objective of the Regional Rural Bank is to
(a) Provide credit and other facilities to small and marginal farmers, agricultural labours and artisans in rural areas
(b) Provide credit to the common people in rural areas
(c) Take over the functions of Agricultural Refinance Corporation of India
(d) Supplement scheduled commercial banks

Q.22. India currently ranks as the world’s ___ largest Energy producer.
(a) Tenth
(b) Fourth
(c) Sixth
(d) Second

Q.23. The second plan’s programme of industrialization was based on the ___ model
(a) British
(b) V.V. Bhatt
(c) P.C. Mahalanobis
(d) Vera Anstey

Q.24. An inferior commodity is one which is consumed in smaller quantities when the income of consumer :
(a) Becomes nil
(b) Remains the same
(c) Falls
(d) Rises

Q.25. Which of the following equation is correct?


The marginal cost curve intersects the average cost curve when average cost is:
(a) Maximum
(b) Minimum
(c) Raising
(d) Falling

Q.27. If the demand curve confronting an individual firm is perfectly elastic, then :
(a) The firm is a price taker
(b) The firm cannot influence the price
(c) The firms marginal revenue curve coincides with its average revenue curve
(d) All of the above

Q.28. In long run equilibrium the pure monopolist can make pure profits because of
(a) Blocked entry
(b) The high price he charges
(c) The low LAC costs
(d) Advertising

Q.29. Which of the following statements is not true about a discriminating monopolist?
(a) He operates in more than one market
(b) He makes more profit because he discriminates
(c) He maximizes his profits in each market
(d) He charges different prices in each market

Q.30. In both the Chamberlin and kinked demand curve models, the oligopolists
(a) Recognize their independence
(b) Do not collude
(c) Tend to keep prices constant
(d) All of the above

Q.31. The demand for a factor of production is said to be a derived demand because
(a) It is a function of the profitability of an enterprise
(b) It depends on the supply of complementary factors
(c) Its stems from the demand for the final product
(d) It arises out of means being scarce in relation to wants.

Q.32. Positive income elasticity implies that as income rises, demand for the commodity
(a) Rises
(b) Falls
(c) Remains unchanged
(d) Becomes zero

Q.33. A Central Bank differs from a commercial bank in that :
(a) It has no branches
(b) It is the banker of the government
(c) It deals with general public
(d) None of the above

Q.34. Open market operations by a Central bank involve :
(a) Sale and purchase of government securities
(b) Increase and decrease of discount rate
(c) Changing the reserve ratio up and down
(d) Raising or lowering of the margin requirements

Q.35. Which one of the following is the most profitable but least liquid asset of a commercial bank?
(a) Loans and advances
(b) Money at call and short notice
(c) Bills discounted and purchased
(d) Investment in government securities

Q.36. CENVAT stands for :
(a) Common Entity Value Added Tax
(b) Corporate Entity Value Added Tax
(c) Central Value Added Tax
(d) None of the above

Q.37. Export led growth strategy does not include :
(a) Outward oriented growth
(b) Export promotion
(c) Import restrictions
(d) Emphasizing comparative advantage

Q.38. Which is the soft lending arm of the World Bank?
(a) IDA
(b) IFC
(c) MIGC

Q.39. Occupational structure refers to the
(a) Number of workers living in a country
(b) Size of working population in the industrial sector
(c) Distribution of working population among different occupations
(d) Nature of different occupations in the economy

Q.40. The ‘Year of Great Divide’ with regard to population growth in India is :
(a) 1911
(b) 1921
(c) 1947
(d) 1971

Q.41. FIEO stands for :
(a) Foreign Import Export Organization
(b) Federation of Import Export Organization
(c) Forum of Indian Export Organization
(d) Federation of Indian Export Organization

Q.42. The Eleventh Five Year Plan (2007-12) kept a target of a GDP growth rate ___.
(a) 6 per cent
(b) 9 per cent
(c) 10 per cent
(d) 12 per cent

Q.43. The major cause of unemployment in India is :
(a) Underdevelopment
(b) Defective manpower planning
(c) Rapid population growth
(d) All of the above

Q.44. The largest share of foreign aid in India has been used in the programme of :
(a) Agriculture development
(b) Industrial development
(c) Education
(d) Health

Q.45. Before financial reforms, the banking system was characterised by all of the following except :
(a) Administered interest rate structure
(b) Quantitative restrictions on credit flow
(c) High revenue requirements
(d) Keeping very less lendable resources for the priority sector

Q.46. During ___ we had surplus in the current account
(a) 2001-04
(b) 1991-93
(c) 1981-83
(d) 1971-73

Q.47. Economic development has retarded in India mainly due to :
(a) Overgrowing service sector
(b) Westernised social attitudes
(c) Poor infrastructural facilities
(d) Modern agrarian system

Q.48. India is termed as a developing economy because of her :
(a) Initiative for determined planned economic development
(b) Rapid population growth
(c) Predominant agrarian set-up
(d) Slow Industrial Progress

Q.49. The percentage of people working in agriculture sector came down to around ___ in 2013-14.
(a) 49 per cent
(b) 80 per cent
(c) 65 per cent
(d) 54 per cent

Q.50. The Government aimed at reducing the Maternal Mortality Rate (MMR) to per 1000 live births by the end of the Eleventh Plan.
(a) 5
(b) 1
(c) 2
(d) 3

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