Question:

A consumer reaches equilibrium when

A.

marginal utility is equal to price

B.

marginal utility greater than price

C.

marginal utility less than price

D.

total utility is equal to price

Answer» a. marginal utility is equal to price

Question:

What is true for deductive method?

A.

Abstract

B.

Realistic

C.

Economic conditions assumed to be changing

D.

Supported by historical school.

Answer» a. Abstract

Question:

The Price and quantity relationship for an inferior good is:

A.

Direct

B.

Inverse

C.

Positive

D.

Indirect

Answer» b. Inverse

Question:

If income effect works in the direction opposite to that of substitution effect, the good is not:

A.

Giffen good

B.

Inferior good

C.

Normal good

D.

Superior Good

Answer» c. Normal good

Question:

ISLM model was developed by:

A.

Hicks

B.

Keynes

C.

Friedman

D.

None of these

Answer» a. Hicks

Question:

In the 19th century _________ argued that ideas pass through three rising stages namely, Theological, Philosophical and Scientific.

A.

Auguste Comte

B.

B. Plato

C.

Aristotle

D.

Socrates

Answer» a. Auguste Comte

Question:

The “General Theory” of Keynes was published in the year:

A.

1936

B.

1776

C.

1930

D.

1911

Answer» a. 1936

Question:

Which of the following definitions of Economics include the economic concept of ‘scales of Preferences’?

A.

Wealth definition

B.

Welfare definition

C.

Scarcity definition

D.

Growth definition

Answer» c. Scarcity definition

Question:

The basic doctrine of consumers’ surplus is based on

A.

indifference curve analysis

B.

revealed preference theory

C.

law of substitution

D.

law of diminishing marginal utility

Answer» d. law of diminishing marginal utility

Question:

Who postulated the law Supply creates its own demand

A.

Keynes

B.

J B say

C.

Marshall

D.

Pigou

Answer» b. J B say