Answer to Multiple Choice Questions on Microeconomics is (c)
The theory of Economic problem states that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs. The problem then becomes how to determine what is to be produced and how the factors of production (such as capital and labor) are to be allocated. In short, the economic problem is the choice one must make, arising out of limited means and unlimited wants.
Who is called the Father of Economics?
(a) J.M. Keynes
(b) Malthus
(c) Ricardo
(d) Adam Smith
Answer to Multiple Choice Questions on Microeconomics is (d)
Adam Smith is best known for two classic works: The Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, usually abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. Smith is cited as the father of modern economics and is still among the most influential thinkers in the field of economics today.
Division of labor is limited by
(a) the number of workers
(b) hours of work
(c) the extent of the market
(d) working space
Answer to Multiple Choice Questions on Microeconomics is (c)
Division of labour is a process whereby the production process is broken down into a sequence of stages and workers are assigned to particular stages. As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment.
The term utility means
(a) the usefulness of a commodity
(b) the satisfaction that a commodity yields
(c) the service which a commodity is capable of rendering
(d) None of these
Answer to Multiple Choice Questions on Microeconomics is (b)
In economics, ‘Utility,’ refers to the total satisfaction received from consuming a good or service. It is usually applied by economists in such constructs as the indifference curve, which plots the combination of commodities that an individual or a society would accept to maintain a given level of satisfaction.
The economic problem arises mainly due to
(a) overpopulation
(b) unemployment
(c) scarcity of resources
(d) lack of industries
Answer to Multiple Choice Questions on Microeconomics is (c)
The theory of Economic problem states that there is scarcity, or that the finite resources available are insufficient to satisfy all human wants and needs. The problem then becomes how to determine what is to be produced and how the factors of production (such as capital and labor) are to be allocated.
Which of the following are not fixed costs?
(a) Rent on land
(b) Municipal taxes
(c) Wages paid to workers
(d) Insurance charges
Answer to Multiple Choice Questions on Microeconomics is (c)
In economics, fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. They tend to be timerelated, such as salaries or rents being paid per month, and are often referred to as overhead costs. For some employees, salary is paid on monthly rates, independent of how many hours the employees work. This is a fixed cost. On the other hand, the hours of hourly employees paid in wages, can often be varied, so this type of labour cost is a variable cost.
Division of labor is the result of
(a) Complicated work
(b) excessive pressure
(c) excess supply of labor
(d) specialization
Answer to Multiple Choice Questions on Microeconomics is (d)
Division of Labor is the “specialization” of cooperative labor in specific, circumscribed tasks and like roles. It is a process whereby the production process is broken down into a sequence of stages and workers are assigned to particular stages.
Gross Profit means
(a) Total investment over total saving
(b) Changes in methods of production
(c) Changes in the form of business organization
(d) Total receipts over total expenditure
Answer to Multiple Choice Questions on Microeconomics is (d)
In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Gross profit = Net sales (total receipts) – Cost of goods sold (total expenditure).
Selling cost means:
(a) Cost of selling a product
(b) Cost incurred in transportation
(c) Cost Incurred in an advertisement
(d) Cost Incurred on factors of production
Answer to Multiple Choice Questions on Microeconomics is (c)
Selling cost is total cost of marketing, advertising, and selling a product. It differs from the production cost which is incurred to produce goods. Selling cost influences the commercial desire to purchase a commodity.
The difference between the price the consumer is prepared to pay for a commodity and the price which he actually pays is called
(a) Consumer Surplus
(b) Producer’s Surplus
(c) Landlord’s Surplus
(d) Worker’s Surplus
Answer to Multiple Choice Questions on Microeconomics is (a)
Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay. If a consumer would be willing to pay more than the current asking price, then they are getting more benefit from the purchased product than they spent to buy it.
