Economic Quiz For FCI Phase I 2022- 13th September

Q1.The demand for inferior goods decreases with ________ in the consumer’s income.
(a) Increase
(b) Decrease
(c) Constant
(d) Double
(e) None of these

Q2.Goods for which the quantity that a consumer chooses, increases as the consumer’s income increases and decreases as the income decreases are called?
(a) Inferior goods
(b) Normal goods
(c) Complementary goods
(d) Substitute goods
(e) None of these

Q3.The _________ balance is equal to capital flows from the rest of the world, minus capital flows to the rest of the world.
(a) Current Account
(b) Savings Account
(c) Capital Account
(d) Asset Account
(e) None of these

Q4. Balance of Trade is the difference between
(a) Country’s Income and Expense
(b) Country’s Exports and Import
(c) Country’s Tax Revenue and Expense
(d) Country’s capital inflow and outflow
(e) None of these

Q5. Micro economics deals with –
(a) the circular flow of income
(b) the decision making of a single economic variable like demand
(c) understanding unemployment
(d) economic growth
(e) None of these

Q6. __________________is a good whose quantity demanded decreases when consumer income rises.
(a) Veblen good
(b) Normal good
(c) Exclusive good
(d) Inferior good
(e) None of these

Q7. In economic equilibrium _____
(a) supply is equal to the demand.
(b) the surplus is larger than the shortage.
(c) elasticity of demand equals elasticity of supply
(d) price elasticity of demand is unity
(e) None of these

Q8. The _________ of a firm is a relationship between inputs used and output produced by the firm.
(a) Marginal product
(b) Production function
(c) Total product
(d) Average product
(e) None of these

Q9.___________ is the set of all possible combinations of the two inputs that yield the same maximum possible level of output.
(a) The Short Run
(b) The Long Run
(c) Isoquant
(d) Average product
(e) None of these

Q10.The __________ exchange rate is the price of one unit of foreign currency in terms of domestic currency.
(a) Artificial
(b) Nominal
(c) Fixed
(d) Real
(e) None of these

Solutions

S1.Ans.(a)
Sol. In economics, an inferior good is a good whose quantity demanded decreases when consumer income rises.

S2.Ans.(b)
Sol. In economics, normal goods are any goods for which demand increases when income increases, and falls when income decreases but price remains constant, i.e. with a positive income elasticity of demand.

S3. Ans.(c)
Sol.The Capital Account balance is equal to capital flows from the rest of the world, minus capital flows to the rest of the world.

S4. Ans.(b)
Sol.The balance of trade (BOT) is the difference between a country’s imports and its exports for a given time period. The balance of trade is the largest component of the country’s balance of payments (BOP).

S5. Ans.(b)
Sol.Micro economics deals with the decision making of a single economic variable like demand.

S6. Ans.(d)
Sol.An inferior good is a good whose quantity demanded decreases when consumer income rises unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers demand increases when their income increases.

S7. Ans.(a)
Sol.In economic equilibrium, supply is equal to the demand.

S8.Ans.(b)
Sol. In economics, a production function relates physical output of a production process to physical inputs or factors of production in a firm.

S9.Ans.(c)
Sol. An isoquant is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. In other words, Isoquant is the set of all possible combinations of the two inputs that yield the same maximum possible level of output.

S10. Ans.(b)
Sol.The nominal exchange rate is defined as the number of units of the domestic currency that can purchase a unit of a given foreign currency and vice versa.