1. Which economist gave the theory of Opportunity cost ?

Milton Friedman

Adam Smith

John Keynes

Gottfried Haberler

Answer: Gottfried Haberler


Gottfried Haberier gave the theory of the opportunity cost. Opportunity cost in microeconomics is the loss of the benefit that could have been taken by making the alternative option that was available at the time of selection.

2. The expenses leading to the increment in production capacity are which type of expenses ?

Revenue Expenditure

Production Expenditure

Investment Expenditure

Capital Expenditure

Answer: Investment Expenditure


The expenses leading to the increment in production capacity are Investment expenditure. It is the expenditure that an organisation makes for the creation of the new assets like machinery, building etc.

3. What is Gini coefficient used for ?

To measure income equality

To measure income inequality

To measure distribution of income

To measure profit and loss

Answer: To measure income inequality


Gini coefficient is used to measure income inequality. A value of ‘0’ represents absolute equality, a value of 100 represents absolute inequality.

4. Pricing Policy of Minimum support price follows which approach ?

Cost plus approach

Investment plus approach

Land plus approach

Loan plus approach

Answer: Cost plus approach


Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices. Cost of production (CoP) is one of the important factors in the determination of MSP of mandated crops.

5. A market structure which is dominated by only a small number of firms is called ?

Perfect Competition



Monopolistic Competition

Answer: Oligopoly


Monopolistic competition, also called competitive market, where there is a large number of producers, each producer has a small share in the market with slightly different products.

6. When the output is equal to zero, the variable cost is ______ ?





Answer: Zero


Total Variable cost = total quantity of output × variable cost per unit If output is equal to zero then the variable cost is equal to zero. Total cost = variable cost +fixed cost

7. A marketplace in which a final goods or service is bought and sold is called ___ ?

Equity Market

Factor Market

Commodity Market

Product Market

Answer: Product Market


The product market is the market where final goods or services are sold to the customer for example the pharmaceutical sector, smart- phones. In this type of market trading of raw does not happen both company and customer deals with the finished product.

8. A higher _____ index represents inequality in income distribution ?





Answer: Gini


Gini coefficient measures the inequality in income distribution. A value of 0 represents absolute equality, a value of 100 represents absolute inequality.

9. Which of the following is NOT a central economic problem, solved by the Production Possibility Curve ?

Full utilisation of resources

Sustainable consumption

Economic efficiency

Economic growth

Answer: Sustainable consumption


The Production Possibilities Curve (PPC) is a model used to show the trade offs associated with allocating resources between the production of two goods. The PPC can be used to illustrate the concepts of scarcity, opportunity cost, efficiency, inefficiency, economic growth and contractions.

10. Which of the following is not included in the factors of production ?





Answer: Tax


Factors of production are the inputs needed for the creation of a good or service. The factors of production include land, labor, entrepreneurship, and capital. Tax is not the factor of production.

  • «
  • 1(curent)
  • 2
  • »