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General Economics


Q.1. Which of the following curve cannot be u-shaped?
(a) Average total cost
(b) Average variable cost
(c) Average fixed cost
(d) Marginal cost

Q.2. The meaning of the word ‘Economic’ is most closely connected with the word :
(a) Extravagant
(b) Scarce
(c) Unlimited
(d) Restricted

Q.3. The average fixed cost :
(a) remains the same whatever the level of output
(b) increase as output increases
(c) diminishes as output increases
(d) all of the above

Q.4. Average variable cost curve :
(a) slopes downwards at first and then upwards
(b) slopes upwards, then remains constant and then falls
(c) slopes downwards
(d) none of the above

Q.5. If a firm produces zero output in the short period :
(a) its total cost will be zero
(b) its variable cost will be positive
(c) its fixed cost will be positive
(d) its average cost will be zero

Q.6. The average total cost of producing 50 units is Rs. 250 and total fixed cost is Rs.1000. What is the average fixed cost of producing 100 units?
(a) Rs.10
(b) Rs.30
(c) Rs.20
(d) Rs.5

Q.7. The MC curve cuts the AVC and ATC curves
(a) at different points
(b) at the falling parts of the each curve
(c) at their respective minima
(d) at the rising parts of each curve

Q.8. Demand curve in most cases slopes
(a) downward towards right
(b) vertical and parallel to Y-axis
(c) upward towards left
(d) horizontal and parallel to X-axis

Q.9. The concept of elasticity of demand was developed by :
(a) Alfred Marshall
(b) Edwin Camon
(c) Paul Samuelson
(d) Fredric Bonham

Q.10. Price elasticity of demand is defined as
  1. Change in quantity demanded
    Change in price
  2. Proportionate change in quantity demanded
    Change in price
  3. Change in quantity demanded
    Proportion change in price
  4. Proportion change in quantity demanded
    Proportion change in price


Under marginal utility analysis, utility is assumed to be a
(a) cardinal concept
(b) ordinal concept
(c) indeterminate concept
(d) none of the above

Q.12. The utility may be defined as
(a) the power of commodity to satisfy wants
(b) the usefulness of a commodity
(c) the desire for a commodity
(d) none of the above

Q.13. Marginal utility of a commodity depends on its quantity and is
(a) inversely related to its quantity
(b) not proportional to its quantity
(c) independent of its quantity
(d) none of the above

Q.14. Consumer’s surplus is the highest in the case of
(a) necessities
(b) comforts
(c) luxuries
(d) capital goods

Q.15. Indifference curve approach assumes
(a) consumer has full knowledge of all relevant information
(b) all commodities are homogenous and divisible
(c) prices of commodities remain the same throughout the analysis
(d) all of the above

Q.16. The ‘substitution effect’ takes place due to change in
(a) income of the consumer
(b) prices of the commodity
(c) relative prices of the commodities
(d) all of the above

Q.17. Under income effect, consumer
(a) moves along the original indifference curve
(b) moves to higher or lower indifference curve
(c) always purchases higher quantities of both the commodities
(d) none of the above

Q.18. In a perfect competitive market :
(a) firm is the price-giver and industry the price taker
(b) firm is the price taker and industry the price giver
(c) both are the price takers
(d) none of the above

Q.19. One of the essential conditions of perfect competition is -
(a) product differentiation
(b) multiplicity of prices for identical product at any one time
(c) many sellers and few buyers
(d) only one price for identical goods at any one time

Q.20. Under the perfect competition a firm will be in Equilibrium when :
(a) MC = MR
(b) MC cuts the MR from below
(c) MC is rising when it cuts the MR
(d) All of the above

Q.21. Which of the following influences most the price level in the very short-run period?
(a) demand
(b) supply
(c) cost
(d) production

Q.22. Long-run normal prices is that which is likely to prevail
(a) all the times
(b) in market period
(c) in short-run period
(d) in long-run period

Q.23. A perfectly competitive firm has control over
(a) price
(b) production as well as price
(c) control over production, price and consumers
(d) none of the above

Q.24. By imperfect monopoly, we mean
(a) It is possible to substitute the monopolized product with another monopolized product
(b) Entry of new firms is possible to produce the same product
(c) The amount of output produced is very small
(d) None of the above

Q.25. The demand curve facing an industrial firm under monopoly is a/an -
(a) horizontal straight line
(b) indeterminate
(c) downward sloping
(d) upward sloping

Q.26. The degree of monopoly power is measured in terms of difference between
(a) Marginal cost and the price
(b) Average cost and average revenue
(c) Marginal cost and average cost
(d) Marginal revenue and average cost

Q.27. A monopoly producer usually earns ___ even in the long run
(a) super normal profits
(b) only normal profits
(c) losses
(d) none of the above

Q.28. Price discrimination is not possible :
(a) under monopoly situation
(b) under any market firm
(c) under monopolistic competition
(d) under perfect competition

Q.30. Discriminating monopoly is possible if two markets have :
(a) rising cost curves
(b) rising and declining cost curves
(c) different elasticities of demand
(d) equal elasticities of demand

Q.31. Consumer’s surplus left with the consumer under price discrimination is :
(a) maximum
(b) minimum
(c) zero
(d) not predictable

Q.32. A firm under monopolistic competition advertises :
(a) as it has no control over the price of its product
(b) to lower its cost of production
(c) to increase its sales and profit
(d) because it cannot raise price

Q.33. In short run, a firm in monopolistic competition
(a) always earns profits
(b) incurs losses
(c) earns normal profit only
(d) may earn normal profit, super normal profit or incur losses

Q.34. In long-run, all firms in monopolistic competition
(a) earn super normal profits
(b) earn normal profits
(c) incur losses
(d) may earn super normal profit, normal profit or in incur losses

Q.35. Differentiated oligopoly is one where there are
(a) many sellers producing homogeneous product
(b) few sellers producing homogenous product
(c) many sellers producing differentiated product
(d) few sellers producing differentiated product

Q.36. Per capital national income means ___.
(a) Total capital / Population
(b) Population / NNP
(c) Personal Income / Population
(d) NNP / Population

Q.37. Which one of the following is not a cause of poverty in India?
(a) abundant population
(b) abundant natural resources
(c) abundant inequalities to distribution of income
(d) abundant surplus manpower in agriculture

Q.38. The most important remedy to the problem of poverty in India is :
(a) changes in the ownership pattern
(b) higher productivity
(c) re-distribution of income through fiscal, pricing and other measures
(d) all of the above

Q.39. Which is the central bank of India?
(a) The State Bank of India
(b) The U.N.O.
(c) The World Bank
(d) The Reserve Bank of India

Q.40. Growth rate of population can be measured by
(a) division of death rate by birth rate
(b) multiplication of death rate by birth rate
(c) addition of death rate and birth rate
(d) subtraction of death rate from birth rate

Q.41. Infant mortality rate refers to :
(a) the number of children dying before reaching the school going age
(b) the number of children dying before reaching 3 years of age
(c) the proportion of children dying within a year of their birth
(d) none of the above

Q.42. Density of population indicates the
(a) Capital - and ratio
(b) Land - output ratio
(c) Land - labour ratio
(d) the number of person per square kilometre

Q.43. Occupational structure refers to the
(a) number of people living in a country
(b) size of working force in a country
(c) distribution of working force among the different occupations
(d) occupations available in a country

Q.44. The last All India population census was conducted in the year :
(a) 2005
(b) 2001
(c) 2011
(d) 1991

Q.45. The population of India in 2012-13 was more than ___
(a) 100 crores
(b) 101 crores
(c) 102 crores
(d) 125 crores

Q.46. According to 2001 census, density of population per square kilometre in India was __
(a) 225
(b) 280
(c) 324
(d) 330

Q.47. The real determinant of the size of market in a country is the
(a) income of its population
(b) geographical area
(c) size of its population
(d) income of the government

Q.48. The occupational structure of India’s labour force since 1951 has
(a) changed significantly
(b) remained more or less static
(c) moved against services and in favour of agriculture
(d) shown trends which cannot be titled in any pattern

Q.49. Which of the following is correct?
(a) Nearly half of the population pays income tax in India.
(b) Less than 5 percent of population pays income tax in India.
(c) India is a zero tax economy
(d) Name of the above

Q.50. As per 2001 census, Kerala had ___ females for 1000 males
(a) 933
(b) 1006
(c) 1036
(d) 1058

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