Practice CUET - Economics test 1. When there is an increase in the Marginal cost: A) The production possibility curve is concave to the origin B) The production possibility curve is convex to the origin C) The production possibility curve is similar to the origin D) None of the above None 2. Which of the following statements is true: A) When the marginal opportunity cost remains constant, the production possibility frontier is a downward sloping straight line B) When the marginal opportunity cost remains constant, the production possibility frontier is an upward sloping straight line C) When the marginal opportunity cost remains constant, the production possibility frontier is a central sloping straight line D) There is no relation between the marginal opportunity cost and the production possibility frontier None 3. Which of the following is a part of microeconomics? A) Factor pricing B) National income C) Both A and B are correct D) Both A and B are incorrect None 4. ‘Economics is the study of mankind in the ordinary business of life’. This definition was given by: – A) Adam Smith B) Lord Robbins C) Alfred Marshall D) Samuelson None 5. In which type of economy do consumers and producers make their choices based on the market forces of demand and supply? A) Open Economy B) Controlled Economy C) Command Economy D) Market Economy None 6. Under Inductive method, the logic proceeds from: A) General to particulars B) Particular to general C) Both (a) and (b) D) None of the above None 7. Economic problem arises because A) Wants are unlimited B) Resources are scarce C) Alternative use of resources D) All of the above None 8. Theory of production studies the problem of A) What goods to produce and how much to produce B) How to produce C) For whom to produce D) All of the above None 9. PP shifts rightward to P1P1. It shows: A) Improvement in technology in good X B) Improvement in technology in good Y C) Improvement in technology in both good X and Y D) Stagnation None 10. Due to scarcity people must do which of the following: A) Trade B) Cooperate C) Make choices D) Competition None 11. Which of the following are types of economic systems? A) Market economy B) Planned economy C) Mixed economy D) All of these None 12. How many central problems exist in an economy? A) Two B) Three C) Four D) None of these None 13. In free market economy allocation of resources is determined by A) Votes taken by consumers B) Central planning authority C) Consumer preferences D) The level of profits of firm None 14. Which of the following statement is true? A) Human wants are infinite B) Resources are limited C) Scarcity gives birth to choices D) All of these None 15. Indian economy is: A) Centrally planned B) Mixed economy C) Market economy D) None of these None 16. The reason for downward shape of production possibility curve is: A) Increasing opportunity cost B) Decreasing opportunity cost C) Same opportunity cost D) Negative opportunity cost None 17. The locus of all points representing bundles among which consumer is indifferent A) Budget line B) Consumer equilibrium C) Indifference curve D) Indifference map None 18. In case of normal goods, the demand curve is A) Downward sloping B) Upward sloping C) Horizontal D) Vertically straight None 19. What is the elasticity when the demand curve is Vertical and parallel to Y axis A) 0 B) 1 C) Less than one D) More than one None 20. Petrol and car is a classic example of A) Substitute goods B) Complementary good C) Inferior goods D) Article of distinction None 21. In case of substitute good the demand for a good usually move in the ---- direction of its price of its substitutes A) Opposite B) Similar C) Random D) None of the above None 22. Which of these is not true about the shape of indifference curve A) Concave to origin B) Downward sloping C) Never touch the X axis D) Never touch the Y axis None 23. The bundles available to a consumer is called A) Budget set B) Budget constraint C) Demand of the consumer D) Preferences of the consumer None 24. A decrease in the price of X axis product will make the budget line A) Flatter B) Steeper C) Parallel D) None of the above None 25. In the demand curve which is the dependent variable A) Quantity B) Price C) Quality D) Demand None 26. Coarse cereal is a type of ______ good A) Superior good B) Inferior good C) Giffen good D) Normal good None 27. The demand for food is---- if there is no close substitute A) Elastic B) Inelastic C) Perfectly elastic D) None of the above None 28. Which of the following is a complement product to peanut butter? A) tea B) Bread C) Mustard D) cream None 29. Long-run production function is related to: A) Law of Demand B) Law of Variable Proportion C) Laws of Returns to Scale D) Elasticity of Demand None 30. Production function is expressed as: A) Qx = Px B) Qx = f(A, B, C, D) C) Qx = Dx D) None of these None 31. Law of variable proportion is related to: A) Both short-run and long run B) Long-run C) Short-run D) Very Long-run None 32. Which of the following is not fixed cost? A) Insurance Premium B) Interest C) Cost of Raw Material D) Rent of the Factory None 33. The alternative name of opportunity cost is: A) Economic Cost B) Equilibrium Price C) Marginal Cost D) Average Cost None 34. The shape of average cost curve is: A) U-shaped B) Rectangular Hyperbola shaped C) Line parallel to x-axis D) None of these None 35. With increase in output, the difference between total cost and total variable cost: A) Decreases B) Increases C) Remains Constant D) None of the above None 36. In which market AR = MR? A) Monopoly B) Monopolistic Competition C) Both (a) and (b) D) Perfect Competition None 37. In perfect competition, which of the following remains constant? A) AR B) MR C) Both AR and MR D) None of the both None 38. AR is shown as: A) TRQ B) ΔQP C) ΔTRΔQ D) None of these None 39. In final equilibrium of firm: A) MC cuts MR from above B) MC cuts MR from below C) Both (a) and (b) are D) None of the above is true None 40. On which assumption, the law of supply depends? A) There should be no change in income levels of buyers and sellers in the market. B) Prices of factors of production remain stable C) Technological level remains constant D) All the above None 41. The quantity of a goods which the seller is ready to sell in the market at fixed price and time is called ? A) Supply B) Demand C) Elasticity of supply D) Elasticity of Demand None 42. Which of the following function shows the laws of supply? A) S = f(P) B) S = f(a/p) C) S = f(Q) D) None of the above None 43. If the price of goods rises by 60% but supply increases by only 5%, the supply of goods will be: A) Highly Elastic B) Elastic C) Inelastic D) Perfectly Inelastic None 44. If the price of the goods rises by 60% and supply increases by only 5%, the supply of goods will be: A) Highly Elastic B) Elastic C) Inelastic D) Perfectly Inelastic None 45. Supply falls on the same price when: A) Where there is decrease in supply B) When there is contraction in supply C) When supply increases D) When there is expansion in supply None 46. The time period in which the capacity of a plant can be varied: A) Short period B) Market period C) Long period D) All of the above None 47. The amount of output given the amount of input through the production function is: A) Maximum B) Minimum C) Constant D) Varies None 48. The rate at which Total Product increases as input increases is: A) Constant B) Not constant C) Diminishing D) Increasing None 49. In which stage of production are the Average Product and Marginal Product decreasing with the Marginal Product above zero (positive)? A) In the stage of Constant Returns B) In the stage of Decreasing Returns C) In the stage of Increasing Returns D) Both (a) and (c) None 50. In which stage of production would a rational entrepreneur like to operate? A) Stage 1 where MP is maximum B) Stage 2 where both MP and AP are decreasing, but both are positive C) Stage 3 where MP is negative D) Either Stage 2 or 3. None 1 out of 50 Name Email School City Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Name * Email * Website Comment * Save my name, email, and website in this browser for the next time I comment.