1. The fundamental economic problem faced by all societies is: a. unemployment b. inequality c. poverty d. scarcity 2.

"Capitalism" refers to: a. the use of markets b. government ownership of capital goods c. private ownership of capital goods d. private ownership of homes & cars 3. There are three fundamental questions every society must answer. Which of the following is/are one of these questions? a. What goods and services are to be produced? b. How are the goods and services to be produced? c. Who will get the goods and services that are produced? d. All of the above 4. If you were working full-time now, you could earn $20,000 per year. Instead, you are working part-time while going to school. In your current part-time job, you earn $5,000 per year. At your school, the annual cost of tuition, books, and other fees is $2,000. The opportunity cost of completing your education is: a. $2,000 b. $5,000 c. $17,000 d. $20,000 e. $22,000 5. The bowed shape of the production possibilities curve illustrates: a. the law of increasing marginal cost b. that production is inefficient c. that production is unattainable d. the demand is relatively inelastic 6. You have taken this quiz and received a grade of 3 out of a possible 10 points (F). You are allowed to take a second version of this quiz. If you score 7 or more, you can raise your score to a 7 (C). You will need to study for the second version. In making a rational decision as to whether or not to retake the test, you should a. always retake the quiz b. consider only the marginal benefits from of retaking the quiz (four extra points) c. consider only the marginal opportunity costs from taking the quiz (the time spent studying and taking the quiz) d. consider both the marginal benefits and the marginal opportunity costs of retaking the quiz

7. The law of demand states that: a. as the quantity demanded rises, the price rises b. as the price rises, the quantity demanded rises c. as the price rises, the quantity demanded falls d. as supply rises, the demand rises

Economics 100 Quiz #1, Page 2 8. The price elasticity of demand is the: a. percentage change in quantity demanded divided by the percentage change in price b. percentage change in price divided by the percentage change in quantity demanded c. dollar change in quantity demanded divided by the dollar change in price d. percentage change in quantity demanded divided by the percentage change in quantity supplied 9. Community Colleges desired to increase revenues. They decided to raise fees paid by students with Bachelors degrees to $50 per unit because they believed this would result in greater revenues. But in reality, total revenues fell. Therefore, the demand for Community College courses by people with Bachelors degrees must have actually been: a. relatively inelastic b. unit elastic c. relatively elastic d. perfectly elastic 10. The demand for a product would be more inelastic: a. the greater is the time under consideration b. the greater is the number of substitutes available to buyers c. the less expensive is the product in relation to incomes d. all of the above Answers: D C D C A D C A C C

Economics 100 Quiz #3 Friday, September 22, 2000 1. In the case of agriculture, a. the demand has shifted to the right more than the supply has shifted to the right b. the demand has shifted to the right less than the supply has shifted to the right c. the demand has shifted to the left more than the supply has shifted to the left d. the demand has shifted to the left less than the supply has shifted to the left 2. The agricultural price support program is an example of a. a price ceiling b. a price floor

c. equilibrium pricing 3. If there is a price floor, there will be a. shortages b. surpluses c. equilibrium 4. If there is a price ceiling, there will be a. shortages b. surpluses c. equilibrium 5. If there is a price ceiling, which of the following is NOT likely to occur? a. rationing by first-come, first-served b. black markets c. gray markets d. sellers providing goods for free that were formerly not free 6. The goal of a pure market economy is to best meet the desires of a. consumers b. companies c. workers d. the government 7. In a pure market economy, which of the following is a function of the price? I. provide information to sellers and buyers , II. provide incentives to sellers and buyers a. I only b. II only c. both I and II d. neither I nor II 8. In a market system, sellers act in ____________ interest , but this leads to behaviors in ____________ interest. a. self; self b. self; societys c. societys; societys d. societys; self 9. The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point: a. Total physical product begins to fall b. The marginal physical product rises c. The marginal physical product falls d. The average physical product falls

10. Why is the law of diminishing marginal returns true? a. specialization and division of labor b. spreading the average fixed cost c. limited capital d. all factors being variable in the long-run Answers: B B B A D A C B C C

Economics 100 MW Quiz #3 1. Which of the following is a characteristic of pure monopoly? a. one seller of the product b. low barriers to entry c. close substitute products d. perfect information 2. In pure monopoly, what is the relation between the price and the marginal revenue? a. the price is greater than the marginal revenue b. the price is less than the marginal revenue c. there is no relation d. they are equal 3. In order to maximize profits, a monopoly company will produce that quantity at which the: a. marginal revenue equals average total cost b. price equals marginal revenue c. marginal revenue equals marginal cost d. total revenue equals total cost 4. Quantity Price Total Cost 1 $100 $ 60 2 95 130 3 90 210 4 85 300 5 80 400 This monopolist should produce: a. 1 b. 2 c. 3 d. 4 e. 5

5. Compared to the case of perfect competition, a monopolist is more likely to: a. charge a higher price b. produce a lower quantity of the product c. make a greater amount of economic profit d. all of the above 6. Which of the following is necessary for a natural monopoly? a. economies of scale b. a high proportion of the total cost is the cost of capital goods c. the market is very small d. all of the above 7. Which of the following is true about the way by which SDG&E has been regulated by the PUC? a. SDG&E has been allowed to earn very high economic profits b. The profits of SDG&E are calculated as a percent of the value of the capital goods c. When the demand for electricity would fall, the price of electricity would also fall d. All of the above 8. Which of the following best defines price discrimination? a. charging different prices on the basis of race b. charging different prices for goods with different costs of production c. charging different prices based on cost-of-service differences d. selling a certain product of given quality and cost per unit at different prices to different buyers 9. In order to practice price discrimination, which of the following is needed? a. some degree of monopoly power b. an ability to separate the market c. an ability to prevent reselling d. all of the above 10. In price discrimination, which section of the market is charged the higher price? a. the section with the richest people b. the section with the oldest people c. the section with the most inelastic demand d. the section with the most elastic demand Answers: A A C C D D B D D C

Economics 100 Quiz #4, Fall 2002 1. Which of the following concepts represents the extra revenue a firm receives from the services of an additional unit of a factor of production? a. total revenue

b. marginal physical product c. marginal revenus product d. marginal revenue 2. Workers Quantity Produced 1 15 2 28 3 39 4 48 5 55 6 60 This company is a profit-maximizing firm selling in a competitive product market and hiring in a competitive labor market. It uses semi-skilled labor to produce dampers used in office building ventilation systems. Assume that the current market price per damper is $50 and that the prevailing weekly salary per semi-skilled worker is $550. This company should employ ______ workers. a. 2 b. 3 c. 4 d. 5 e. 6 3. The demand for labor is the same as the a. marginal revenue product b. marginal physical product c. marginal cost d. wage 4. The demand for labor slopes down and to the right because of a. the law of demand b. the iron law of wages c. the law of diminishing marginal returns d. economies of scale 5. The demand for labor will be more elastic if: a. there are few substitutes for labor b. there is a short time under consideration c. labor is a large percent of the total cost of production d. the demand for the product is relatively inelastic e. all of the above 6. Skills that can be transferred to other employers are called: a. general skills b. specific skills c. non-pecuniary skills

d. all of the above 7. Which skills are most likely to be paid for by the employer? a. General skills b. Specific skills c. Educational skills 8. If worker A earns more in wages than worker B, it could be because: a. The product made by worker A sells for a higher price than that made by worker B b. Worker A uses more capital per worker than worker B c. Worker A has more natural ability than worker B d. All of the above 9. Skills that embodied in a person are called a. Human capital b. Embodied skills c. Physical capital d. Experience skills 10. Treating an individual as typical of a group is the definition of a. pure discrimination b. statistical discrimination c. human capital d. specific skills Answers: C B A C C A B D A B

Economics 100 Quiz #5, Fall 2001 1. If there are 50 firms in a industry, each selling 2% of the total sales, the concentration ratio is: a. 50% b. 2% c. 100% d. 8% 2. When Daimler Benz, maker of the Mercedes, bought Chrysler, the merger was a. horizontal b. vertical c. conglomerate Questions 3 through 10 involve the functions of the government in a world of laissez faire. The functions are the following: A. Create and Enforce the "Rules" B. Promote or Maintain Competition

C. Provide Information D. Provide Public Goods E. Reduce Negative Externalities (External Costs) through regulations or through taxes F. Subsidize Positive Externalities (External Benefits) G. Provide Merit Goods H. Redistribute Income on the Basis of Need For each of the following, choose the letter that best describes the function of government. 3. The government provides anti-trust laws. 4. The government subsidizes the building of new stadiums and arenas. 5. The government provides for military defense. 6. The government has a program of social security to provide a pension for the elderly. 7. The government requires that all gasoline stations post their prices in signs large enough to be seen by a reasonable person from the street. 8. The government requires people to have a smog control device in their cars. 9. The government makes the beach free for everyone 10. The government makes laws that determine certain behaviors that a corporation must engage in and other behaviors that a corporation cannot engage in. Answers: D A B F D H C E G A

Economics 100 Quiz 6, Fall 2002 1. The largest source of tax revenue for the federal government is: a. the personal income tax b. the social security tax c. the property tax d. the sales tax 2. When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20%

c. 30% d. 40% 3. The tax is question #2 is: a. progressive b. regressive c. proportional 4. Which of the following taxes is regressive? a. the federal income tax b. the state income tax c. the sales tax d. the Medicare tax 5. Assume that there are two goods, A and B. In 1996, Americans produced 10 units of A at a price of $10 and 20 units of B at a price of $20. In 2002, Americans produced 20 units of A at a price of $20 and 30 units of B at a price of $30. The Nominal GDP for 2002 is: a. $100 b. $400 c. $500 d. $900 e. $1300 6. Using the numbers in question 5, the Real GDP for 2002 is: a. $400 b. $500 c. $800 d. $900 e. $1,300 7. Which of the following statements is/are true? a. Business Investment Spending occurs when individuals buy stock in the stock market b. Productivity is the United States grew very slowly between 1973 and 1996 c. Because of discouraged workers, the official unemployment rate is too high d. Full employment occurs when there is no frictional unemployment 8. Immediately after a trough, we would expect to have a/an a. peak b. recession c. recovery d. another trough 9. Last week, Martha spent one day cleaning a house. For this, she was paid $50. The rest of the week, she spent looking for a job. Martha would be classified as a. employed b. unemployed c. not in the labor force 10. John lost his accounting job when Montgomery Wards closed its stores in San

Diego. He looked for a similar job for ten months before finding an accounting job at Sears. During the month John was unemployed, he was a. frictionally unemployed b. seasonally unemployed c. cyclically unemployed d. structurally unemployed Answers: A C A C E C B C A D

Economics 100 Makeup for Quiz 6 1. Define average tax rate Define marginal tax rate 2. Define progressive tax Define regressive tax Define proportional tax 3. Define indexation 4. Define Nominal Gross Domestic Product (GDP) Define Real Gross Domestic Product (GDP) 5. Define business investment spending 6. Briefly explain how the official unemployment rate is calculated. 7. Define frictional unemployment Define cyclical unemployment Define structural unemployment Define full employment

Economics 100 Quiz #7, Fall 2002 1. Assume that there are only two goods: A and B In the base year, Quantity Price A 10 $1 B 10 $4 In the current year, Quantity Price A 20 $ 5 B 25 $20 The Consumer Price Index (CPI) for the current year is: a. 50

b. 100 c. 200 d. 500 e. 600 2. Which of the following groups is most hurt by unexpected inflation? a. workers with cost of living adjustments in their labor contracts b. homeowners c. people with large debts to pay for their homes and cars d. people with large retirement savings held in savings accounts 3. If the nominal interest rate is 5% and the inflation rate is 2%, the real interest rate is: a. 2% b. 3% c. 5% d. 7% e. 2 % 4. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would? a. Inflation makes everyone poorer b. Inflation reduces the value of consumer debt c. Inflation increases business investment spending d. Inflation decreases savings in financial form 5. Disposable Income is equal to: a. National Income c. National Income Minus Taxes b. Real GDP c. National Income Minus Taxes d. National Income Minus Taxes Plus Transfers 6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a: a. balanced budget b. budget deficit of $1000 c. budget surplus of $1000 d. budget deficit of $2000 7. According to Keynes, when the Great Depression started, the government should have: a. done nothing b. decreased the money supply c. had a large increase in government spending

d. enacted high tariffs, such as the Smoot-Hawley Tariff 8. If the government lowers taxes by $10 billion, the Real GDP will rise by a. more than $10 billion b. less than $10 billion c. exactly $10 billion 9. Which of the following is an automatic stabilizer? a. unemployment benefits b. spending on education c. defense spending d. net interest 10. Crowding out means that a. a government budget deficit lowers interest rates and causes investment spending to rise b. an increase in marginal tax rates lowers production c. a government budget deficit raises interest rates and causes investment spending to fall d. a government budget deficit raises American exports and lowers American imports Answers: D D B D D C C A A C

Economics 100 Quiz 8 1. Which of the following IS a function of money? a. medium of exchange b. store of value c. unit of accounting d. all of the above 2. Which of the following is a component of M-1? a. savings deposits b. credit card c. checkable deposits d. gold 3. Which of the following is a NOT component of M-2? a. small time deposits b. money market mutual funds c. stocks d. checkable deposits 4. Which of the following is true about the Federal Reserve System (Fed)? a. it is a system of 12 central banks b. its Board of Governors is elected by a vote of the people

c. its main policy-making body is the FDIC d. it accepts deposits from the public and makes loans to businesses e. all of the above 5. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called: a. discounts b. federal funds c. reserves d. collateral 6. Which of the following is the most liquid? a. a savings account b. a 6 month CD c. a home d. water 7. The monetary base is composed of: a. gold and silver b. currency only c. currency and reserves d. currency and checkable deposits 8. If the monetary base is increased by $1,000 and the reserve requirement is 10% (1/10), by how much will the money supply be increased? a. $100 b. $1,000 c. $5,000 d. $10,000 9. If the Federal Reserve wishes to increase the money supply, it should: a. raise the reserve requirement b. raise the discount rate c. buy Treasury securities in the open market d. all of the above 10. An increase in the money supply will cause interest rates to a. rise b. fall c. remain unchanged Answers: D C C A C A C D C B

1.The concept of costing margin in the pricing theory was introduced by? (A)Andrews (B) Baumol (C)Cournot (D) Williamson 2.The Keynesian theory of employment provides the solution of? (A) Frictional unemployment (B) Disguised unemployment (C) Cyclical unemployment (D) Seasonal unemployment 3. Four heads of expenditure of the Union Budget 2009-10 are given below 1. Plan expenditure 2. Non-plan expenditure 3. Revenue expenditure 4. Capital expenditure Arrange the expenditure heads in descending order using the codes given below (A)2,3,4,1 (B) 3,4,2, 1 (C)3,2,1,4 (D) 2,1,4,3 4. In the year 2007-08 the per capita NNP at current prices was? (A) More than Rs. 20,000 (B) More than Rs. 30,000 (C) More than Rs. 40,000 (D) More than Rs. 50,000 5. Mathematics was first used economic theory by? (A)Weiser (B) Walras (C)Cournot (D) Pigou 6. Indias foreign exchange rate system is? (A) Free float (B) Managed float (C) Fixed (D) Fixed target of band 7. The terms NEER and REER are related with?

(A) Foreign exchange rate (B) External economic resources: (C) National and regional economic equality (D) Environmental regulation 8. For the calculation of percentile, the data should be arranged in? (A) Ascending order (B) Descending order (C) Random order (D) Either random or descending order 9. As per BASEL-II norms, a banks capital to risk weighted assets ratio (CRAR) should be at least? (A) 8% (B) 10% (C) 12% (D) 14% 10. The shape of a frequency curve cannot be? (A) U-shaped (B) V Shaped (C) J-shaped (D) S-shaped 11. According to the Planning Cornmission, for infrastructure development during Eleventh Five Year Plan, the required investment is? (A) Approximately $ 250 billion (B) Approximately $ 500 billion (C) Approximately $ 750 billion (D) Approximately $ 1000 billion 12. Indias first port-based Special Economic Zone named Inter national Container Transshipment Terminal (ICTI) is being set-up at? (A)Kandla (B) Kochi (C)Goa (D) Tuticorin 13. Which of the following is pure unitless number? (A) Mathematical average (B) Statistical average (C) Absolute measure of dispersion (D) Relative measure of dispersion 14.The user cost of capital is? (A) The real rate of interest plus the rate of depreciation (B) The nominal rate of interest plus the rate of depreciation (C) The real rate of interest only

(D) The nominal rate of interest only 15. The number of items reserved for the exclusive manufacture by micro and small enterprises is currently? (A) Less than 25 (B) Less than 50 (C) Less than 75 (D) Less than 100 16.A new housing price index RESIDEX has been launched by? (B) Planning Commission (C) Housing Development Finance Corporation (D) National Housing Bank (A) Central Statistical Organization 17.Which one of the following is not a feature of current Indian Planning? (A) Structural Planning (B) Indicative Planning (C) Functional Planning (D) Decentralised Planning 18.The concept of disinvestment was introduced by? (A) Friedman (B) Kaldor (C)Keynes (D) Myrdal 19. Which of the following is average of second order? (A) Arithmetic mean (B) Geometric mean (C) Second quartile (D) Standard deviation 20.. Which average is most affected by the extreme observations? (A) Arithmetic mean (B) Geometric mean (C) Median (D) Mode 21.If the covariance of two variables is equal to the product of the standard deviations of the variables, then the correlation coefficient will be? (A) -1 (B)+1 (C) 0 (D) Between 0 and -1 22 The term Animal Spirit was used by Keynes for?

(A) Consumption (B) Investment (C) Income (D) Interest 23. The index of Financial Inclusion has been launched for the first time in 2008 by? (A) Confederation of Indian Industries (CII) (B) Federation of Indian Chamber of Commerce and Industry (FICCI) (C) National Council of Applied Economic Research (NCAER) (D) Indian Council for Research on International Economic Relations (ICRIER) 24.The elasticity of factor substitution for constant elasticity substitution production function is always? (A) Zero (B) One (C) A positive value (D) A negative value 25.The Revealed Preference theory assumes? (A) Weak ordering (B) Strong ordering (C) Constant ordering (D) Multiple ordering 26. Which of the following is not an item of transfer payment? (A)Pension (B) Scholarship (C)Dividend (D) Subsidy 27 The United Nations Millennium Development Goals are to be reached by the year? (A) 2010 (B) 2015 (C) 2020 (D) 2025 28.The number of women entrepreneurs in small scale industrial region is highest in the state of? (A) Karnataka (B) Kerala (C) Maharashtra (D) Tamil Nadu 29. Which of the following is not an effect of lump sum tax imposed on monopolist? (A) Output sold is unchanged (B) Price is unchanged (C) Profit reduces (D) Incidence of tax is wholly on buyer

30. A distributed lag for net investment may be due to? (A) A decrease in the capital output ratio (B) An increase in the capital output ratio (C) Limited, short-run production capabilities in capital goods industry (D) Limited long-run production capabilities in capital goods industry 31. The concept of Adjusted Net Saving has been given by? (A)Hamilton (B) Friedman (C)Keynes (D) Pigou 32. The product of regression coefficients is always? (A) Positive (B) Negative (C) Zero (D) A complex number 33. The nature of classical unemployment is? (A) Disguised (B) Frictional (C)Open (D) Structural 34. Which one of the following properties shows the high degree of dispersion? (A) Homogeneity (B) Consistency (C) Uniformity (D) Variability 35. The New Exploration License Policy (NELP) of the Government of India is related with? (A) Coal and Lignite (B)Uranium and Thorium (C) Diamond and Precious Stones (D) Oil and Gas 36.Full employment is a situation when? (A) Cyclical unemployment is zero (B) Frictional unemployment is zero (C) Seasonal unemployment is zero (D) Disguised unemployment is zero 37.Which Indian Company has been included for the first time in U.S. As index NASDAQ-100? (A)Infosys (B)Tata Motors (C) ICICI Bank

(D) Videsh Sanchar Nigam Limited 38.The natural rate of unemploy ment is the sum of? (A) Frictional unemployment and Structural unemployment (B) Frictional unemployment and Cyclical unemployment (C) Structural unemployment and Cyclical unemployment (D) Structural unemployment and Seasonal unemployment 39.The nature of statistical inference is? (A) Inductive (B) Deductive (C) Descriptive (D) Objective 40. Mean deviation is always? (A) Equal to the standard deviation than the standard (B) Less than the standard deviation (C) More than the standard deviation (D) Twice of the standard deviation 41. The coefficient of alienation is known as? (A) Against correlation (B) Against variance (C) Against association (D) Against determination 42. The Divergence Indicator is related with? (A) Wage rate of workers (B) Exchange rate of currencies (C) Profit of firms (D) Market price of shares 43.Which one of the following taxes has not been abolished in recent Union Budgets? (A) Banking Cash Transaction (B) Commodity Transaction Tax (C) Fringe Benefit Tax (D) Securities Transaction Tax 44.The Samuelson-Holt formula provides a measure of? (A) Consumers equilibrium (B) Consumers surplus (C) Elasticity of demand (D) Marginal utility 45. The most liquid asset among the following is? (A) Gold (B) Share (C)Cash

(D) Land 46. Ricardian Equivalence is related with? (A) Low deficit, less saving (B) Low deficit, more saving (C) High deficit, less saving (D) High deficit, more saving 47. The Swiss Formula of World Trade Organisation is related with? (A) Patent of drugs (B) Agricultural subsidy (C) Transboundary services (D) Non-agricultural tariff 48. The Securities and Exchange Board of India has recently made the rating of Initial Public offerings mandatory. The total number of such grades are? (A)Three (B) Four (C)Five (D) Six 49. Consider the following statement Once a person has spent his entire income, he would have maximized his total pleasure from it only if the satisfaction gained from the last item of each commodity bought was the same for the each commodity. The above statement is related to? (A) Gossens First Law (B) Gossens Second Law (C) Gossens Third Law (D) Gossens Fourth Law 50. Which of the following results in an increase in inventory sales ratio? (A) A decrease in the cost of holding inventory (B) An increase in probability delivery delays for materials (C) A decrease in the probability delivery delays for materials (D) An increase in the cost of: holding inventory 51. Harris-Todaro model is related with? (A) Growth and unemployment (B) Growth and migration (C) Unemployment and migration (D) Unemployment and inflation 52. Density test is used for? (A) Median (B) Mean (C) Mode (D) Quartile

53. In the Keynesian saving function, the parameter is ? (A) Disposable income (B) Total saving (C) Marginal propensity to save (D) Autonomous saving 54. A simple correlation can defined as the tendency of? (A) Independent variation (B) Dependent variation (C) Simultaneous variation (D) Instantaneous variation 55.For implementing a comprehensive Khadi Reform Programme, a financial aid of $ I million over a period of three years has recently been tied up with? (A) International Monetary Fund (B) International Development Agency (C) Asian Development Bank (D) International Finance Corporation 56.For n consecutive natural numbers, the following relationship is correct? (A) Mode = Mean (B) Mean = Median (C) Mode > Median (D) Mode < Mean 57. The measure of the degree of association between the values of two random variables is called? (A) Correlation (B) Association (C) Regression (D) Co-variance 58.The current level of maternal morality rate in India is approximately? (A) 150 per one lac live births (B) 250 per one lc live births (C) 350 per one lac live births (D) 450 per one lac live births 59.In any set of numbers, the geometric mean exists only when all numbers are? (A) Positive (B) Negative (C) Zero (D) Positive, zero or negative 60. If correlation coefficient is equal to zero, then variables will be? (A)Associated (B)Correlated (C)Independent

( D) Dependent Answers: 1B 2C 3C 4B 5A 6B 7A 8A 9C 10 D 11 B 12 B 13 D 14 A 15 A 16 D 17 C 18 C 19 D 20 A 21 B 22 D 23 D 24 C 25 B 26 C 27 B 28 D 29 D 30 B 31 A 32 A 33 C 34 D 35 D 36 A 37 A 38 A 39 B 40 B 41 D 42 B 43 D 44 C

45 C 46 D 47 D 48 C 49 B 50 D 51 C 52 C 53 A 54 B 55 C 56 B 57 A 58 B 59 A 60 C

. Which of the following are the measures of Integrated Slum Development Programme adopted in India in the 11 Five Year Plan? 1. Creating and updating database on slums. 2. Using land as a resources for housing and shelter development for slum dwellers. 3. Asking slum dwellers to apply for house loan from government. 4. Granting tenure security to slum dwellers. Select the correct answer using the code given below (a)1,2 and 3 (b)1 and 2 (c)2 and 4 (d)1,2 and 4 Ans. (d) 2. Demographic divide refers to a rise in population (a) between the age group of I to 14 years (b) between the age group of 15 to 64 years (c) between the age group of 65 to 74 years (d) above 74 years Ans. (b) 3. The total public sector outlay in the Eleventh Five Year Plan (Central, State and Union Territories) is estimated at about: (a)Rs. 30 lakh crore (b) Rs. 36 lakh crore (c)Rs. 40 lakh crore (d) Rs. 46 lakh crore Ans. (b) 4. Which one of the following is the prescribed investment limit for medium enterprises in the manufacturing sector as per the Micro,Small and Medium Enterprises

Development Act, 2006? (a) More than Rs. 10 lakh and less than Rs. 2 crore (b) More than Rs. 2 crore and less than Rs. 5 crore (c) More than Rs. 5 crore and less than Rs. 10 crore (d) More than Rs. 10 crore Ans. (d) 5. Which one of the following statements regarding Aam Admi Bima Yojana (AABY) is not correct? (a) It was launched in the year 2007 (b) The contribution of the Central Government and State Governments in the premium is in the ratio of 75 : 25 (c) The scheme is applicable to rural landless households (d) It provides insurance against natural death as well as accidental death Ans. (b) 6. Balance on capital account refers to the (a) nations net exports of goods, and services (b) nations net exports of financial claims (c) nations net exports of international official reserve assets (d) nations sum of net exports of goods, services and financial claims Ans. (a) 7.With which one of the following does the Prebisch-Singer hypothesis deal? (a) Terms of trade of less developed countries (b) Terms of trade of developed countries (c) Balance of payments of less developed countries (d) Balance of payments of developed countries Ans. (c) 8. The effect of trade with different production possibilities curves and identical indifference curves is to make a country. (a) more specialized in consumption and less specialized in production (b) more specialized in production and less specialized in consumption (c) less specialized both in consumption and in production (d) more specialized both in consumption and in production Ans.(d) 9. consider the following statements: When factor intensity reversal occurs 1. Heckscher-Ohlin trade model fads. 2. factor price equalization theorem fails. 3. elasticity of substitution of one factor for the other is much higher in the production of a commodity. Which of the statements given above is/are correct? (a)1 only (b) 2 only (c)1 and3 (d) 1,2 and 3 Ans. (d) 10. Under which one of the following conditions is the gain from international trade

maximised? (a) Marginal rate of transformation (MRT) in production is equal to the marginal rate of substitution (MRS) in consumption (b) MRT in production is greater than MRS in consumption (c) MRT in production is less than MRS in consumption (d) MRT in production and MRS in consumption are equal to international price ratio Ans. (a) 11. The Lorenz curve shows the relationship between (a) asset creation and income generation (b) population groups and their respective income shares (c) unemployment and inflation (d) wages, labour hours and leisure Ans. (b) 12. Which of the following are the characteristics of the Traditional Society in Rostows Stage theory? 1. Limited production function. 2. No government intervention. 3. Pre-Newtonian science and technology. 4. Dominance of agricultural activity. Select the correct answer using the code given below (a) 1,2and4 (b) 1,2and3 (c) 1,3and4 (d) 2,3 nd4 Ans. (c) 13. Which one of the following is the difference between value at market prices and value at factor cost for a national aggregate? (a) Value of consumption of fixed capital (b) Value of indirect taxes net of subsidies (c) Value of net factor income earned abroad (d) Value of subsidies net of indirect taxes Ans. (b) 14.Given C=120+0.4Y, I=100, G=56 (Where C =Consumption, I = Investment, G =Government Expenditure and Y = Income); which one of the following is the value of equilibrium income? (a) 366.67 (b) 460.00 (c) 310.00 (d) 266.67 Ans:b 15. According to Life Cycle Hypothesis, consumption is related to which one of the following? (a) Current income (b) Past peak level income

(c) Life time expected income (d) Price expectations over ones life time Ans. (c) 16. Keynes states that the aggregate demand function is: (a) an increasing function of the level of employment (b) a decreasing function of the level of employment (c) a constant function of the level of employment (d) not related to the level of employment Ans. (a) 17. Which of the following are the limitations of national income estimation in India? 1. Output of non-monetized sector. 2. Non availability of data about income of small producers or household enterprises. 3. Unreported legal income. 4. Inflation. Select the correct answer using the code given below (a) 1,2,3and4 (b) 1,2and3 (c) 2 and 3 (d) 1 and 4 Ans. (b) 18. Which one of The following is shown by the Phillips Curve? (a) Inverse relationship between real and nominal wages (b) Inverse relationship between the rate of inflation and rate of unemployment (c) Positive relationship between nominal wages and the rate of employment (d) Positive relationship between rate of inflation and nominal wages Ans. (b) 19. If a producer pays the price for each of the inputs that it uses, equal to its value of marginal product, then which one of the following does it earn? (a) Positive supernormal profit (b) Zero supernormal profit (c) Negative supernormal profit (d) Monopoly profit Ans. (b) 20. The costs of factors of production, supplied by the entrepreneur himself are known as (a) implicit costs (b) explicit costs (c) fixed costs (d) variable costs Ans. (b) 21.Which one of the following taxes/cess is levied by States in India? (a) Tax on motor vehicles (c) Educational cess (b) Tax on hotels

(d) Tax on wealth Ans. (a) 22. Which one of the following is capital receipt in government budget? (a) Interest receipts o loans given by the Government to other parties (b) Dividends and profits from public sector undertakings (c) Borrowing of the Government from public (d) Property tax receipts Ans. (a) 23. Which of the following are the characteristics of progressive tax? I. Marginal tax rate should be increasing. 2. Marginal tax rate should be more than average tax rate. 3. Gini coefficient for the post-tax distribution of income should be less than that of pretax distribution. 4. Tax amount should be lump sum in nature. Select the correct answer using the code given below (a) 1,2,3and4 (b) 1,2and3 (c) 1 and 4 (d)2 and 3 Ans. (a) 24. Consider the following statements regarding argument for free trade: 1. Free trade leads to maximization of output, income and employment. 2. Free trade prevents monopoly. 3. Free trade protects domestic industries. Which of the statements given above is/are correct? (a) 1 only (b) 1 and 2 (c) 2and3 (d) 1,2and 3 Ans. (b) 25. Marshall-Lerner condition states that the foreign exchange market would be stable if the sum of the price elasticities of the demand for imports and the demand for exports is: (a)greater than one (b) less than one (c)equal to one (d) equal to zero Ans. (c)