Economics Practice Questions Set 5

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For India's Top Government Exams

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If the average total cost is declining then
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1 point

the marginal cost must be less than the average total cost

total cost must be constant

the average fixed cost curve must be above the average variable cost curve

the marginal cost must be greater than the average total cost

Which of the following factors was not a reason behind the occurrence of the Industrial Revolution in England first?
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1 point

No part of the country was far from the sea

Navigable rivers made inland transport easier

In England, machines could be operated by wind or water power due to favorable climate condition

England had coal, iron, and other necessary mineral resources

In India, the price of petroleum products has been deregulated mainly to ___
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1 point

reduce the burden of subsidies given to the oil companies

discourage the exploration of oil reserves in the country

discourage the demand for private vehicles

curb the use of black money in the economy

Which of the following factors is/are responsible for the recent rapid slow down of the Indian economy despite recovering from the global financial crisis.

1. The boost to demand given by monetary and fiscal stimulus following the crisis was large.
2. Starting in 2011-12, corporate and infrastructure investment started slowing both as a result of investment bottlenecks as well as the tighter monetary policy.
Select the correct answer using the codes given below

1 point

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Consider the following statements

1. The recent decision of the Government of India to partially decontrol the sugar industry gives the millers the freedom to sell sugar in the open market and removes their obligation to supply sugar at subsidized rates to ration shops.
2. C. Rangarajan’s panel also suggested decontrolling the sugar industry in India.
Which of the statements given above is/ are correct?

1 point

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

The income elasticity of demand for inferior goods is
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1 point

less than one

less than zero

equal to one

greater than one

The main functioning of the banking system is to
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1 point

accept deposits and provide credit

accept deposits and subsidies

provide credit and subsidies

accept deposits, provide credit and subsidies

In a perfectly competitive economy, production and consumption will both be Pareto optimal if the economy operates at a point where
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1 point

there is general equilibrium

output levels are below equilibrium

output levels are above equilibrium

consumption is less than output

The average fixed cost curve will always be ___
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1 point

a rectangular hyperbola

a downward sloping convex to the origin curve

a downward sloping straight line

a U-shaped curve

Which one among the following is not a salient feature of the Companies Bill as amended in the year 2012? *

1 point

For spending the amount earmarked for corporate social responsibility, the company shall give preferences to local areas where it operates

Punishment for falsely inducing a person to enter into an agreement with the bank or financial institution with a view to obtaining credit facilities

There is no limit in respect of companies in which a person may be appointed as auditor

‘Independent directors’ shall be excluded for the purpose of computing ‘one-third of retiring directors’

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