Que.1 Which of the following is not micro economics?

(a)Savings
(b) Market demand
(c) Price
(d) cotton cloth industry
Ans.(a)
Que.2 Labor intensive techniques are chosen as in a:
(a) Labor surplus economy
(b) Capital surplus economy
(c) Developed economy
(d) Developing economy
Ans(a)
Que.3 Ramesh is working at a salary of rupees 35000 per month. He receives two job
offers: (i) To work as an accountant at a salary of rupees 30,000 per month (ii) To work
as a sales manager at a salary of rupees of 25000 per month. In the given case ,his
opportunity cost will be:
(a) 25,000
(b) 30,000
(c) 35,000
(d) 65,000
Ans. (b)
Que. 4 Scarcity refers to limitation of .......in relation to ......for a commodity.
(a) Demand, Sale
(b) Demand ,Supply
(c) Supply, Demand
(d) None of these
Ans.(c)
Que.5 Assertion (A) Normative economics deals with what ought to be .
Reason(R): 'Pradhan Mantri Kisan Samman Nidhi' which provides assured income
support of rupees 6000 per year should provide a big relief to small and marginalized
farmers.
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct
explanation of Assertion (A).
(b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct
explanation of Assertion (A).
(c) Assertion (A) is true, but Reason (R) is false.
(d) Assertion (A) is false, but Reason (R) is true
Ans.(a)
Que.6“Economics is the study of economic welfare” who said this:
 Marshall

Prof. Pigou

J. K. Mehta

Keynes

Que.7 We want to know how the national income or the total income arising from what
has been produced in the country ( called the Gross Domestic Product) is
distributed through wages (and salaries), profits and interest. This is the study
of ____________.
a) Consumption b) Production
c) Distribution d) Statistics
Que.8 Economising of resources means :
a) Use of resources on more profitable activities
b) Savings of resources for future use
c) Shifting of resources from one task to another
d)None of the above
Que.9. An economy is operating on its production possibilities frontier for 2019. A year
later it is operating at a point beyond 2019’s production possibilities frontier, but
within 2020’s production possibilities frontier. From this information , It can be
concluded that between 2019 and 2020.
a) Both economic growth and an increase in unemployment occurred.
b) Both economic growth and a reduction in unemployment occurred.
c) Only a reduction in unemployment occurred.
d) Only economic growth occurred.
Que10. What is the other name for opportunity cost in economics ?
a)Marginal cost b)Total cost c)Variable cost d) Economic cost
Que.11.Which of the following is not a subject matter of Macro economics?
a) Employment level b) Aggregate Supply
c) National Income d) Determination of market price
Que.12. Which of these statement is correct about Opportunity cost?
a) Opportunity cost is always higher than the given price
b) Opportunity cost is always less than the given price.
c) Opportunity cost is always calculated in money.
d) Opportunity cost can be less than , more than or equal to given price
. Read the following statements-Assertion(A) and Reason(R). Choose one of the
correct alternatives given below: [5 mark]
Alternatives
a) Both Assertion and Reason are true and Reason is the correct explanation of
Assertion.
b) Both Assertion and Reason are true and Reason is not the correct explanation
of Assertion .
c) Assertion is true but Reason is false
 d) Assertion is false but Reason is true
Que.13 Assertion: The relative price and availability of labour and capital are the
determining factors while selecting the production technique.
Reason: Choice of technique needs to be adopted and used in the process of
production.
Que.14Assertion: Normative statements describe what ought to be.
Reason: These statements pass value judgments or the probable
consequences.
Que.15Assertion : Opportunity cost is the cost of the next best alternative foregone.
Reason : The opportunity cost of building an additional airport terminal is the public
housing for low- income families that the same government funds could have been used
for.
Que16. Why does an economic problem arise?
Ans. Economic scarcity of problem resources arises in relation because to demand for them.
(1) Wants are unlimited:
(a) This is basic fact of human lifethat human wants are unlimited.

(b) They are not only unlimited but also grow and multiply very fast. (it)
Resources are limited:
The resources to produce goods and services to satisfy human wants are available in limited
quantities. Land, labour, capital and entrepreneurship are the basic scarce resources.
These resources are available in limited quantities in every economy, big or small, developed or
underdeveloped, rich or poor. Some economies may have more of one or two resources but not all
the resources.
For example, Indian economy has relatively more labour but less capital and land. The U.S.
economy has relatively more land but less labour. No economy in the world is comfortable in all the
resources.
(iii) Resources have alternative uses:
Generally a resource has many alternative uses.
A worker can be employed in a factory, in a school, in a government office, self employed and so
on.
Like this, nearly all resources have alternative uses. But the problem is that which resource should
be put to which use.

Que17. Give reasons for the following statements:

Every economy has to make the

decision relating to what to produce.

Problem of choice arises because available resources have alternative uses.

 (1) As, we know there is no economy in this world which possesses infinite resources to produce
each and everything in infinite quantities.
Therefore, if an economy decides to produce a quantity of one commodity, then they have to sacrifice the production of
another commodity.

(ii) Resources in every economy are always scarce. But the available resources can be put to alternative uses. Therefore,
an economy will always prefer to make use of its resources in production of those goods and services that are most
required and sacrifice the production of lessrequired goods and services.

Que18. Why do all economies have similar central problems?

Ans. All economies whether developed or developing, have similar central problem because one or more of their
resources (land, labour, capital and entrepreneurship) are limited and these resources can be put to alternative uses.
The wants of the economies are unlimited. Therefore ibo all economies have to face the basic economic problem of
choice (what to produce, how to produce and for whom to produce).

Que19. State the central problems of an economy.

Ans. The central problems of an economy

(1) What to produce and in what quantity?

(ii) How to produce?
(iii) For whom to produce?