Question:

Total utility is maximum when

A.

marginal utility is zero

B.

marginal utility is maximum

C.

marginal utility increases

D.

average utility is maximum

Answer» a. marginal utility is zero

Question:

Which policy is effective in the intermediate range?

A.

Monetary policy

B.

Fiscal policy

C.

Both policies

D.

None of these

Answer» c. Both policies

Question:

The value of investment multiplier depends on:

A.

APC

B.

APS

C.

MPC

D.

MPS

Answer» c. MPC

Question:

As per classical theory saving is:

A.

An increasing function of rate of interest

B.

Decreasing function of rate of interest

C.

Decreasing function of level of income

D.

None of these

Answer» a. An increasing function of rate of interest

Question:

The essential condition to act as money is:

A.

It is homogeneous

B.

It is legal tender

C.

It is backed by gold

D.

It is generally acceptable

Answer» d. It is generally acceptable

Question:

Division of Labour is limited by the extent of:

A.

Supply

B.

Demand

C.

Price

D.

Market

Answer» d. Market

Question:

Diminishing marginal returns are most compatible with:

A.

Economies of scale.

B.

Advantages from specialization.

C.

Positively-sloped marginal cost curves

D.

Depreciation of the capital stock.

Answer» b. Advantages from specialization.

Question:

The short run as the term is used in connection with the theory of the firm is a period of time:

A.

Too short for the firm to vary all its inputs

B.

No more than a week

C.

Long enough for the firm to vary the quantity of all its inputs

D.

In which the fixed costs are zero

Answer» a. Too short for the firm to vary all its inputs

Question:

Inflation can not be caused by:

A.

Cost push factor

B.

Excessive money supply

C.

Excessive production

D.

Demand pull factors

Answer» c. Excessive production

Question:

Value added at each stage of production means:

A.

Value of output minus value of input

B.

Total value added by that stage

C.

Total value produced at that stage

D.

All of the above

Answer» a. Value of output minus value of input