Economic Important Question For AFCAT Exam
Economics questions for defance exam and afcatexam 2022 1
1.What does an increase in quantity supplied indicate?
(A) Leftward shift of supply curve
(B) Upward trend of the supply curve
(C) downward trend of supply curve
(D) rightward shift of the supply curve
Answer
rightward shift of the supply curve
2. What is “marginal cost” equal to?
(A) The difference between total cost and total profit of the last unit produced
(B) Total cost divided by total profit of the last unit produced
(C) Total cost divided by quantity
(D) change in total cost divided by change in quantity
Answer
Change in total cost divided by change in quantity
(3). Which of the following statements is correct?
(A) Most workers will work for less than the minimum acceptable wage.
(B) Minimum acceptable wage is the maximum amount a firm can pay to a worker.
(C) Economic rent is the difference between the market wage and the minimum acceptable wage.
(D) Economic rent is the amount that must be paid to enter a desirable labor market.
Answer
Economic rent is the difference between the market wage and the minimum acceptable wage.
4. Marginal productivity of capital is
(A) Expected rate of return on new investment
(B) Expected rate of return on current investment
(C) Difference between profit rate and interest rate
(D) Value of output per unit of invested capital
Answer
Expected rate of return on new investment
5. What is situation analysis useful for?
(A) Analysis of capital market
(B) SWOT analysis
(C) Capital market
(D) Analysis of capital market and capital market
Answer
SWOT analysis
6. The study of factor pricing is alternatively called whose theory?
(A) Functional distribution
(B) Individual distribution
(C) Income distribution
(D) property distribution
Answer
Functional delivery
7. Transverse demand expresses functional relationship:
(A) Between demand and prices of related goods
(B) Between demand and income
(C) between demand and prices
(D) Between demand and supply
Answer
between demand and prices of related goods
8. What is the relationship between production function?
(A) Production and profit
(B) Production and prices
(C) Production and factors of production
(D) Production and income
Answer
production and production factors
nine. The consumer gets maximum satisfaction at the point where
(A) Marginal utility = price
(B) marginal utility > price
(C) marginal utility < price
(D) marginal cost = price
Answer
marginal utility=price
10.What is the relationship between production function?
(A) Production and profit
(B) Production and prices
(C) Production and factors of production
(D) Production and income
Answer
production and production factors
eleven. How is the equilibrium price determined in the market?
(A) Equality between marginal cost and average cost
(B) Equality between overall cost and overall revenue.
(C) Similarity between average cost and average revenue.
(D) equality between marginal cost and marginal revenue.
Answer
Equality between marginal cost and marginal revenue.
12. Which of the following costs is related to minimum cost?
(A) Variable cost
(B) Implicit costs
(C) Basic cost
(D) fixed cost
Answer
variable cost
13. How is the market equilibrium of a commodity determined?
(A) Market supply of goods
(B) Balance of forces of demand and supply of the commodity
(C) Government intervention
(D) Market demand of the commodity
Answer
balance of forces of demand and supply of a commodity
14. In which situation is the sale of branded goods common?
(A) excess capacity
(B) Monopolistic competition
(C) Monopoly
(D) Pure competition
Answer
monopolistic competition
15. Under which will buyers and sellers have complete information about market conditions?
(A) Dual rights
(B) Perfect competition
(C) Monopolistic competition
(D) Oligopoly
Answer
perfect competition
16. When does the equilibrium price of a commodity definitely increase?
(A) As demand decreases, supply increases.
(B) When both demand and supply increase.
(C) When there is a shortage in both demand and supply.
(D) Demand increases along with decrease in supply.
Answer
Along with the decrease in supply comes the increase in demand.
17. What are the ultimate forms of markets?
(A) perfect competition; Minorities
(B) Oligopoly; monopoly
(C) Perfect competition; monopoly
(D) Perfect competition; monopolistic competition
Answer
perfect competition; monopoly
18. Which of the following happens when worker productivity increases?
(A) Decline in equilibrium cash wages.
(B) Decline in the equilibrium quantity of labour.
(C) Competitive firms will be induced to use more capital.
(D) Labor demand curve shifts to the right
Answer
The labor demand curve shifts to the right.
19. If marginal return increases at decreasing rate then total return
(A) Increases.
(B) Decreases.
(C) remains constant
(D) becomes zero.
Answer
happens to.
20. 'Capital gains' is related to which goods?
(A) Which are a means of further increasing the capital.
(B) Which helps in more production of goods.
(C) Which directly fulfill the demands of humans.
(D) Those who discover various experiments.
Answer
Which helps in more production of goods.
21. What will the unit price elastic demand curve touch?
(A) Both price and quantity axes
(B) Neither price axis nor quantity axis
(C) Price axis only
(D) only magnitude axis
Answer
Neither price axis nor quantity axis
22. Which of the following are consumer semi-durable goods?
(A) Car and television set
(B) Milk and milk products
(C) Food grains and other food products
(D) Electrical appliances like fan and electric iron
Answer
Food grains and other food products
23. Price and product are the determining factors in the market structure without which
(A) Monopoly
(B) Perfect competition
(C) Oligopoly
(D) A right of purchase
Answer
perfect competition
24.When consumer income increases, what effect will it have on small items?
(A) Negative impact
(B) positive effect
(C) No effect
(D) first increases and then decreases
Answer
negative impact
25. Meaning of the law of increasing returns is
(A) Incremental costs
(B) diminishing cost
(C) increasing production
(D) increasing income
Answer
sunk cost
26.The third condition of variable proportion rule is called
(A) Negative return
(B) Positive return
(C) Proportional return
(D) incremental returns
Answer
negative returns
27. If average cost falls, marginal cost
(A) grows at a higher rate
(B) falls at the same rate
(C) grows at a lower rate
(D) falls at a higher rate
Answer
falls at the same rate
28. Who said that “Supply creates its own demand”.
(A)J. B. From
(B) J. S. mill
(C) J. M. Keynes
(D) Senior
Answer
J. B. From
29. Any factor of production is economic rent. (surplus) when its supply is such that
(A) Perfectly elastic
(B) Complete Beloch
(C) of elastic nature
(D) All of the above
Answer
perfect inelastic
30. Which of the following types of markets is unable to control prices?
(A) Monopoly
(B) Perfect Competition
(C) Oligopoly
(D) Monopolistic competition
Answer
perfect competition
31. When the price of substitute for good 'X' decreases, the demand for 'X' is:
(A) Decreases.
(B) remains unchanged.
(C) Increases at an increasing rate.
(D) increases.
Answer
Decreases.
32. By what other name is 'hyperinflation' also known?
(A) Conduction inflation
(B) Flow inflation
(C) hyperinflation
(D) slow inflation
Answer
hyperinflation
33. What is production related to?
(A) End of utility
(B) Creation of utilities
(C) exchange value
(D) Use of the product
Answer
creation of utilities
34. The demand for a component of production is
(A) direct
(B) derivative
(C) Neutral
(D) Producer's discretion
Answer
derivative
35. If the supply curve is a straight line passing through the origin, then what will be the price elasticity of supply?
(A) less than one
(B) extremely large
(C) more than one
(D) equivalent to the unit
Answer
equivalent to the unit
36. On what is the law of demand based?
(A) Manufacturer's preference
(B) Seller's preference
(C) Priority of supplier
(D) Consumer preference
Answer
consumer preference
37. Which of the following commodities has only exchange value?
(A) Diamond
(B) Television
(C) Computer
(D) Rice
Answer
Diamond
38. What does the law of diminishing returns apply to?
(A) All areas
(B) Industrial area
(C) Agricultural sector
(D) Service sector
Answer
all areas
39. What is the average fixed cost line (curve)?
(A) upward
(B) 'U' shaped
(C) 'V' shaped
(D) downward
Answer
downwards
forty.Input-Output Analysis is often called
(A) Cost-benefit analysis
(B) Marginal cost analysis
(C) Inter-industry analysis
(D) None of the above
Answer
inter-industry analysis
41.Demand elasticity with respect to price is:
(A) Elasticity = % change in demand % change in price
(B) Elasticity = % change in price % change in demand
(C) Elasticity = % change in demand % change in supply
(D) Elasticity = % change in supply % change in price
Answer
Elasticity = % change in demand % change in price
forty two. What are returns to scale?
(A) Perpetual/Perpetual phenomenon
(B) Directionless phenomenon
(C) short term phenomenon
(D) long term phenomenon
Answer
long term phenomenon
43. Who introduced the time element in price analysis?
(A) J.M. keynes
(B) Alfred Marshall
(C) J.S. mill
(D) J.R. Hicks
Answer
alfred marshall
44. Any factor of production can earn economic rent (surplus) when its supply is such that
(A) Perfectly elastic
(B) Complete Beloch
(C) of elastic nature
(D) All of the above
Answer
perfect inelastic
45. Founded by John Pemberton, a pharmacist, this product is the second most understood product in the entire world after the word “OK”. What is his name?
(A) Aspirin
(B) Eno
(C) Coca-Cola
(D) Pepsi
Answer
Coca-Cola
46. Workers should participate in industrial decisions, what is this ideology called?
(A) Industrial democracy
(B) worker sovereignty
(C) Industrial socialism
(D) Workers' Dictatorship
Answer
industrial democracy
forty seven. A supply function expresses the relationship between what?
(A) Price and production
(B) Price and selling price
(C) Price and demand
(D) Price and consumption
Answer
price and production
48. From a national perspective, which of the following would be a micro approach?
(A) B.S.N. Study of mobile phone sales by
(B) Unemployment among women
(C) Per capita income in India
(D) Inflation in India
Answer
B.S.N. Study of mobile phone sales by
49. As the number of investments made by a firm increases, its internal rate of return increases.
(A) falls because of declining marginal productivity.
(B) Other things remaining the same, falls because the market rate of interest will fall.
(C) Current consumption increases to compensate for the previous consumption.
(D) Increases because the level of savings will fall.
Answer
Current consumption increases to compensate for the forecast.
50. What are those unexpended costs, which arise when a producing firm owns and supplies some of the items of production, called?
(A) Well-expressed costs
(B) Basic costs
(C) implicit costs
(D) replacement costs
Answer
implicit costs
