1. Micro economics theory deals with (a) Economic behavior of individual economic decision making units (b) Economy as a whole (c) Trade relations (d) Economic growth of the society

2. Which of the following is a central problem of every economy (a) Abundance of resources (b) Scarcity of economic resources (c) Poverty (d) Moral and ethical values

3. Normative economic theory deals with (a) What is or how the economic problem facing the society are solved (b) How the problem should be solved (c) What to Produce (d) How to produce

4. In a mixed economy which sector(s) is/ are found (a) Private Only (b) Public sector only (c) None (d) Both a and b

5. In economic theory the term “means” refers to (a) Resources (b) Arithmetic mean (c) A characteristic (d) None

6. Cetris Paribus means (a) Holding demand constant (b) Holding supply constant (c) Price being constant (d) Other things being constant

7. Which of the following goods is likely to have perfectly inelastic demand?a. Carb. Saltc. Cabbaged. Sugar

8. At higher prices people demand more of certain goods not for their worth but for theirprestige value – This is calleda. veblen effectb. giffens paradoxc. speculative effectd. none of the above

9. Which of the following statements is correct?a. When the price falls the demand fallsb. Seasonal changes do not affect the supply of a commodityc. Taxes and subsidies do not influence the supply of the commodityd. With lower cost, it is profitable to supply more of the commodity.

10. Scarcity of resources leads to

(a) Unsatisfaction of human wants (b) Evaluation of alternative uses of scarce resources (c) Both (d) None 11. Who defined economics as “ Science which deals with wealth” (a) J. B. Say (b) A. C. pigou (c) Alfred Marshall (d) Robbins

12. Economics cannot be considered a perfect science because (a) Human behaviour is unpredictable (b) It is difficult to make correct prediction of economic variables (c) Economist do not have common opinion about a particular economic event (d) All the three

13. In addition to three Central problem of economy, the additional problem(s) raised by the Modern economists is / are (a) Are the resources fully utilized or not (b) How efficient is the production and distribution system (c) Whether the capacity to produce or grow is increasing or is static (d) All the three

14. The basic assumption of an economic analysis is/ are (a) Cetris paribus (b) Rational behaviour (c) Both (d) None

15. The terms Micro economic and Macro economics were coined by (a) Professor A Samulson (b) Giffen (c) Prof. Ragner Frisch (d) Eagle

16. ----------is known as father of economics (a) Adam Smith (b) Professor A Samulson (c) Alfred Marshall (d) J R Hicks

17. Which of these are outside the domain of macro economics (a) Consumer behavior (b) National income (c) Economic growth (d) Balance of payment and trade

18. Scarcity of resources means (a) Limited resources (b) Non – existence of resources (c) Both (d) None

19. Human wants are (a) Unsatisfiable (b) Unlimited (c) Undefined (d) Limited

20. Economics cannot be given the status of science because (a) Of non-uniformity of opinion and approach of economist (b) Economic behaviour of human being is unpredictable (c) Measuring rod of money is unstable (d) All the three

21. Which of the following is not a central problem of a society (a) What to produce (b) How to produce (c) For whom to produce

(d) Where to produce 22. Which of these is an economic activity (a) A father teaching his son at home instead of sending to any coaching centre (b) A hair dresser doing hair cut designing on payment (c) A housewife mending her family cloths on her own (d) A singer giving a show on his son’s wedding anniversary

23. Which of the following issue relates to micro-economics (a) Impact of crude price hike on inflation (b) Impact of change in bank rate on bank saving and investment (c) Impact of Information technology on economic growth (d) Impact of shortage of wheat production on wheat prices

24. Economics models are (a) Based on some realistic assumptions (b) Based on hypothetical assumptions (c) Scientifically tested (d) Based on necessity

25. The famous book “An enquiry into the nature and causes of wealth of Nation” was written by – (a) Adam Smith (b) Samulson (c) Robertson (d) JB Say

26. Which of the following is not a central problem of a society

(a) What to produce

(b) How to produce

(c) For whom to produce

(d) What to eat

27. In free economy the decision about investment, saving and consumption are decided by (a) Price mechanism (b) Central bank (c) Planning Commission (d) Finance budget

28. Chicken and fish are substitutes. If the price of chicken increases, the demand for fish willa. increase or decrease but the demand curve for chicken will not changeb. increase and the demand curve for fish will shift rightwards.c. not change but there will be a movement along the demand curve for fish.d. decrease and the demand curve for fish will shift leftwards.

29. Potato chips and popcorn are substitutes. A rise in the price of potato chips will —————— the demand for popcorn and the quantity of popcorn will ———————a. increase; increaseb. increase; decreasec. decrease; decreased. decrease; increase

30. If the price of Orange Juice increases, the demand for Apple Juice will _____________.a. increase b. decreasec. remain the same. d. become negative.31. An increase in the demand for computers, other things remaining same, will:a. Increase the number of computers bought.b. Decrease the price but increase the number of computers bought.c. Increase the price of computers.d. Increase the price and number of computers bought.

32. When total demand for a commodity whose price has fallen increases, it is due to:a. income effect.b. substitution effectc. complementary effectd. price effect

33.Condition of consumer’s equilibrium: a) Slope of IC = slope of budget line b) MRSXY = PX/PY c) MRS = price ratio of two goods d) all of the above

34. Goods that exhibit direct price-demand relationship are called:a. Giffen goods b. Complementary goodsc. Substitute goods d. None of the above

35. The price of a commodity decreases from Rs 6 to Rs 4 and the quantity demanded of the good increases from 10 units to 15 units, find the coefficient of price elasticity. (Use Point Elasticity Method)a. 1.5 b. 2.5 c. -1.5 d. 0.5

36. An imposition of excise duty would effect the demand of a product due to ………….. (a) Income effect (b) Substitution effect (c) Both (d) None

37. Two commodities X and Y goods can be inferred as close substitute of each other if – (a) Increase in price of one leads to increase in demand of other and vice versa (b) Increase in price of one leads to decrease in demand of other and vice versa (c) Fall in price of one lead to fall in demand of other one (d) Increase in price of one leads to increase in demand of other one

38.Consumer will be in surplus when:a) MUX > PX b) MUX = PX c) MUX < PX d) unlimited income

39. Two ICs never intersect each other because: a) they can’t be close to each other b) they represent different levels of satisfaction c) both d) None

40.The budget line is also known as: a) income line b) price line c) preference line d) none