SET XXIII

1. Micro economics is not concerned with the analysis of :
a) individual decision units
b) allocation of the economy’s resources to various competing uses

c) market mechanism
d) broad economic aggregates

2. Economic laws refer to:
a) generalizations concerning the economic behavior of individuals
b) behavior of firms under various market forms
c) setting optimal targets for economic development of the country
d) principles derived from the analysis of demand and supply of consumer goods

3. Micro economics deals with:
a) the allocation of the nation’s resources among various competing uses
b) the determination of the prices of different goods and services
c) the size of the country’s national income through aggregate variables,consumption, investment, national income and savings
d) the determination of wage rate in the cotton textile industry

4. Many of the basic problems of economics emerge from:

a) inadequate system of price determination
b) unutilized capacity in various production units
c) the use of limited resources to satisfy human wants

d) the state interference with the market mechanism

5. The production activity in a capitalist economy takes place in ___ to:

a) accumulate capital
b) create employment
c) satisfy effective demand

d) accumulate wealth

6. The principle determinant of allocation of resources in the capital economy is:

a) the strength of trade unions
b) the government policies
c) the demand for capital goods

d) the price mechanism

7. The production function describes the:
a) economic relationship between output and price
b) technological relationship between input and output
c) mathematical relationship between quantity of one input and price of ____

d) movement from one supply curve to another

8. In economics, production may be defined as an act of:

a) providing services

b) earning profit

c) creating utility
d) producing machines

9. The production possibility curve (PPC) shows the:
a) maximum output combinations of two goods produced with available resources
b) minimum input combinations of two factors used to produce a given level of outputof a commodity
c) production pattern in an economy assuming unlimited availability of resources

d) rate of change of output subject to change in technology

10. An efficient economy operates at a point:

a) below the production possibility curve
b) on the production possibility curve
c) above the production possibility curve

d) none of the above