Economics - Study Mode

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[#226] Who gave the idea of the paradox of economy in the beginning?

(A) Samuelson

(B) Keynes

(C) Bernard Mandeville

(D) Pigou

Correct Answer

(B) Keynes

[#227] In region second of production with a single variable input

(A) marginal product is declining but non-negative

(B) average product is negative

(C) average product is increasing

(D) average product is positive and marginal product is increasing

Correct Answer

(A) marginal product is declining but non-negative

[#228] The capital that is consumed by an economy or a firm in the production process is known as

(A) Capital loss

(B) Production cost

(C) Dead-weight loss

(D) Depreciation

Correct Answer

(D) Depreciation

Explanation

Solution: The capital that is consumed by an economy or a firm in the production process is known as Depreciation. In economics, depreciation is the gradual decrease in the economic value of the capital stock of a firm, nation or other entity, either through physical depreciation, obsolescence or changes in the demand for the services of the capital in question.

[#229] Who propounded the opportunity cost theory of international trade?

(A) Ricardo

(B) Marshall

(C) Heckscher & Ohlin

(D) Haberler

Correct Answer

(D) Haberler

Explanation

Solution: Haberler propounded the opportunity cost theory of international trade. Gottfried Haberler has attempted to restate the comparative costs in terms of opportunity cost. He demonstrates that the doctrine of comparative costs can hold valid even if the labour theory of value is discarded. The theory determines the cost of producing a commodity in terms of the alternative production that has to be foregone for producing the commodity in question.

[#230] Which among the following statement is INCORRECT?

Correct Answer

(C) If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
(H) The system of floating exchange rate requires comprehensive government intervention
(L) The founder of Welfare economics was Alfred Marshall

Explanation

Solution: The percentage change in the quantity demanded divided by the percentage change in price is coefficient of elasticity.
So two linear and parallel demand curves will have same coefficient of elasticity and the changes in price w.r.t changes in quantity demanded will be the same.