Major economic problems - class-IX
Description: major economic problems | |
Number of Questions: 83 | |
Created by: Varsha Mane | |
Tags: economic planning economic development & planning planning and environment poverty economic planning in india introduction to microeconomics rural economics basic problems of an economy types of economies introduction to economics government and the economy economic concepts and planning economics economic reconstruction economics of development and planning development experience (1947-90) |
________are the measures to solve an economic problem.
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Solutions
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Policies
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Plans
-
Programmes
Policies are measured implemented by the government to solve economic problems. In India, the government has implemented various measures such as National Rural Employment Guarantee Act, 2005, which is implemented to help solve the issue of rural unemployment.
Which of the following is the best general definition of the study of Economics?
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Inflation and unemployment in a growing economy.
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Business decision making under foreign competition.
-
Individual and social choice in the face of scarcity.
-
The best way to invest in the stock market.
In economics, relationship between unlimited wants and scarce resources are established in such a way that both social as well as individual maximisation is achieved. The study majorly focuses on how personal gain as well as social welfare is achieved with utilization of scarce resources in an effective manner.
Economic activities are those activities that are done with a view to earn a reward.
-
True
-
False
Economic activities are those that are related to the production and consumption of goods and services with an aim to earn money. These activities are undertaken to earn monetary awards in cash or kind. The two objectives of economic activities are the proper allocation of resources and optimum use of resources.
Scarcity means producing less goods and services in a given time period.
-
True
-
False
Scarcity refers to the limited supply of resources which are demanded in the economy. It does not mean producing less goods and services in a given time period. Scarcity of resources is the central problem of the economy. Because the human wants are unlimited and these resources are limited and have alternative uses.
The price given for labour is usually called salaries and wages.
-
True
-
False
The labor helps in the production of goods and services by providing the required skills and knowledge. And in return for this input in the production process, they demand something in return in the form of monetary benefits. The money or price given to them is thus called salaries and wages.
There still are many traditional economies in the world even today.
-
True
-
False
No, there are no traditional economies in the world today. Traditional economies are the ones which are based on one of the few traditional activities like agriculture, hunting, fishing, etc. These economies do not have a monetary system and are largely based on barter trade. Today there is no country which operates as a traditional economy.
All our wants can be satisfied because resources get discovered every day.
-
True
-
False
All our wants cannot be satisfied. This is because the resources are scarce and do not get discovered every day. Due to the less amount of resources available, the demands of the huge growing population cannot satisfied.
The most important economic problem is that the resources used to satisfy our wants are limited in supply.
-
True
-
False
The most important economic problem is the scarcity of resources. The resources that are used to satisfy our wants are limited in supply. Due to this problem all the wants and desires of a man cannot be fulfilled as the wants are never-ending. This requires the efficient use of resources.
Scarcity of resources leads to _______.
-
unsatisfactory human wants
-
evaluation of alternative uses of scarce resources
-
both A and b
-
none of the above
Scarcity of resources leads to both unsatisfactory wants and evaluation of alternative uses of these resources. The resources present in the economy are limited whereas the human wants are never ending and unlimited. Due to this all wants cannot be fulfilled. Hence, they remain unsatisfied. Not only this, the resources also have alternative uses. This means that they can be put to various uses. Thus it becomes important to put the resource in the best use so that they can be used efficiently.
Scarcity of resources effects ________________.
-
Households
-
Business firms
-
Governments
-
All of the above
Scarcity of resources effects households, business firms, governments and even individuals. The main problem of economics is the scarcity of resources which affects everyone. The needs and wants of households remain unsatisfied. The businesses and governments don’t have enough resources for their operations. Due to this problem, it is necessary that we use these resources efficiently.
Which of the following is a central problem of every economy?
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Abundance of resources
-
Scarcity of economic resources
-
Moral and ethical values
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Illiteracy
‘Scarcity of economics’ is the central problem of economics. It means that the resources in the world are limited whereas the wants of a man are unlimited and never ending. Due to this, the resources are always insufficient to satisfy all human wants and needs. Apart of being scarce, the resources have alternative uses as well. Thus, it becomes extremely important to use the resources in the most effective and efficient manner.
The three fundamental questions of economics are ______.
-
when, for whom, and how
-
how, what, and for whom
-
who, how, and when
-
what, who, and why
The three fundamental questions of economics are:
1. How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.
2. What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.
3. For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor.
The problem of economics arises from which of the following reasons?
-
Unlimited wants
-
Scarcity of resources
-
Resources having alternative uses
-
All of the above
D.All of the above
Economic Problem - The problem of choice, like an individual, also applies to the society as a whole. Thus, for an economy, economic problem is the problem of resource allocation. An economic problem exists whenever scarce means are used to satisfy alternative ends.
Causes of Economic Problem - Unlimited Wants, Limited
or scarcity of Resources, Alternative use of resources.
Which of the following refers directly to the concept of scarcity?
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population explosion
-
unlimited human wants
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limited resources
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human greed
‘Scarce means’ is the fundamental problem of economics. It means that the resources in the world are limited whereas the wants of a man are unlimited and never-ending. Due to this, the resources are always insufficient to satisfy all human wants and needs. Apart from being scarce, the resources have alternative uses as well. Thus, it becomes extremely important to use the resources in the most effective and efficient manner.
When we say scarcity we refer to ________.
-
scarcity of productive resources
-
scarcity of consumable goods
-
scarcity of human capital
-
scarcity of funds
When we say scarcity, we refer to the scarcity of productive resources. It is the limited supply of productive resources that constitutes the central problem. The wants of people are unlimited and thus these scarce resources are unable to fulfill all the demands of the economy.
The basic economic questions that every society must address include which of the following?
-
what, how, and for whom
-
where, when, and why
-
which, why, and what
-
when, how, and which
The three fundamental questions of economics are:
1. How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.
2. What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.
3. For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor.
The central problem of how to produce is resolved by _________.
-
demand and supply of factor inputs
-
demand and supply of goods
-
relative prices and availability of factors of production
-
government intervention
The central problem of how to produce is resolved by the relative prices and availability of factors of production. This problem refers to the selection of technique to be used for production of goods and services. Thus when we know the prices and availability of factors of production, we can identify the techniques that should be used to produce a particular combination of goods and services.
The questions like what? how? and for whom? arise due to the existence of ______.
-
scarcity of resources
-
capitalism
-
government control
-
inequality of income distribution
The economic problems of what, how and for whom to produce arises because the resources in the economy are scarce. The resources present in the economy are limited but the demand for them is unlimited. Due to this, wants of people remain unsatisfied. As a result, goods are not available and the economic problems related to the allocation of distribution of resources arises.
The central problem of an economy of 'what to produce' is an alternative problem of ________________.
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allocation of resources
-
what to consume and what not to consume
-
selection of factor of production
-
resource planning
What to produce is an alternative problem of allocation of resources. It talks about the things that should be produced with the limited resources that are available in the economy. Thus it is important that you allocate these resources to various uses in an efficient manner. So that the maximum output can be achieved.
______ is not a central problem of a society.
-
What to produce
-
How to produce
-
For whom to produce
-
When to produce
The three fundamental questions of economics are:
1. How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.
2. What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.
3. For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor.
Hence, we see that when to produce is not a central problem.
The three basic economic questions do not include ______.
-
what?
-
for whom?
-
where?
-
how?
The three fundamental questions of economics are:
1. How to produce: it talks about the techniques that should be used to produce goods and services that are required by the people.
2. What to produce: it talks about the things that should be produced with the limited resources that are available in the economy.
3. For whom to produce: it talks about the selection of the category of people for whom the goods are to be produced. More for the rich, less for the poor or less for the rich and more for the poor.
So where to produce is not a central problem.
Which of the following is not a central problem of a society?
-
What to produce
-
How to produce
-
For whom to produce
-
What to eat
The central problem of a society refers to all such prominent problems that affect the civilians of that society directly. Therefore, the problem of 'how to eat' is the problem of deciding the accurate consumption by an individual through various commodities available to him.
Corruption is not good for an economy because:
-
it deprives people of their basic rights
-
it creates tension and unrest among the people
-
leads to anti-social criminal activities
-
all of the above
Corruption is an arrangement of dishonesty or against the law crime is undertaken by a person or organization entrusted with a situation of influence. Corruption is steady in society and occurs in all civilization. The majority general cause of corruption is the political and economic environment, personal ethics and morality and of courses, habits, customs, tradition, and demography.
Its effects on the economy are well-research, yet still not completely. Corruption thus inhibits financial growth and affects business operation, employment and investments. It also reduces tax revenue and the effectiveness of various financial support programs.
The correct option is D.
Every economy is characterized by _____________.
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unlimited wants and needs
-
no energy resources
-
unlimited material resources
-
abundant productive labour
It is a very well known fact that human wants are unlimited as if on need is satisfied then there are generations of many other needs which are to be satisfied. Therefore, every economy is characterized by humans which refers to unlimited wants and needs.
__________ refers to favours done by men in position for others in exchange for some monetary and other benefits.
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Black marketing
-
Corruption
-
Hoarding
-
None of the above
Corruption erodes the expectation we have in the public sector to act in our best interests. It also wastes our taxes or rates that have been earmark for the important centre of population projects – meaning we have to put up with poor quality services or infrastructure or we miss out altogether.
Fiscal loss, damage to employee morale, damage to an organisation's reputation, organisational focus and resources abstracted away from delivering core business and services to the community increased scrutiny, oversight and regulation.
The correct option is B.
The problem of what goods and services are produced and how much, is covered by the general term ________.
-
resource allocation
-
choice of technique of production
-
distribution
-
macroeconomics
The problem of what goods and services are produced and how much, is covered by the general term Resource Allocation. Allocation of resources refers to the problem of assigning the scarce resources in such a manner so that the maximum wants of the society are fulfilled. As the resources are limited in relation to the unlimited wants, it is important to economize their use and utilize them in the most efficient manner.
'Commodity Service method' is another name for:
-
Expenditure method
-
Income method
-
Value-added method
-
None of these
Commodity service method also known as value added method refers to a method for calculating the national income of quoted price of a commodity in general where the amount of cost in each level of production is added to generate the total price of the commodity including the normal profit for the production unit.
Which of the following problem in an economy is a result of corruption in the country?
-
Lack of political and social justice.
-
Rising poverty and unemployment.
-
Income inequality.
-
All of the above.
Corruption is a shape of dishonesty or illegal crime undertakes by a person or organization entrusted with a place of authority. The negative belongings of corruption it reduces foreign direct and domestic investments, increase inequality and poverty, raises the number of freeloaders in the economy, distorts and exploits public investments and reduces public revenues.
There are many causes of corruption like the greed of money, higher levels of market and political monopolization, low levels of democracy, lows economic freedom.
The correct option is D.
Choose the correct answer.
The scarce resources of an economy have.
-
Competing usages
-
Single usages
-
Unlimited usages
-
None of the above
The scarce resources of an economy
have competing usages. In other words, every society has to decide on how to
use its scarce resources.
Which of the following is an argument for the relevance of dividends?
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Informational content
-
Reduction of uncertainty
-
Some investors' preference for current income
-
All of the above
Dividend is the allocation of reward from a segment of the company's income and is paid to a class of its shareholders. Dividends are decided and managed by the company's board of directors, although they must be accepted by the shareholders from side to side their voting rights.
Walter and Gordon not compulsory that shareholders favour current dividend and therefore a positive relationship exist between dividend and market value. The reason put following this argument is that investor is generally risk-averse and that they prefer current the dividend, attaching lesser importance to future dividends or capital gains.
The correct answer is D.
The Reserve Bank of India was established in the year _________.
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1947
-
1951
-
1935
-
1969
The Reserve Bank of India was established on 1st Apr,1935 Kolkata.
The economy of Britain crumbled after the First World War. Identify the factor which did not contribute to the above.
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Strengthening of domestic markets in colonies.
-
Industrialization of China.
-
Stiff competition from Us, Germany, Japan.
-
Huge wage structure in colonies.
Assume there are four families in a country. The average per capita income of these families is Rs. 5000. If the income of three families is Rs. 4000, Rs. 7000 and Rs. 3000 respectively, what is the income of the fourth family?
-
Rs. 7500
-
Rs. 3000
-
Rs. 2000
-
Rs. 6000
-
Rs. 9000
Total income of four families $= 5000 * 4 = 20000$
Total income of three families $= 4000 + 7000 + 3000 = 14000$
Income of the fourth family $= 20000 – 14000 = 6000$
Evading taxation is a corruption.
-
True
-
False
Evading taxation, that is, avoiding to give tax to the government is a corruption. For example, we can find the bribery results in a reduction in sales reported for taxes.
Which of the following is not considered production in Economics?
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Tilling of soil by farmers
-
Singing a song before friends
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Construction of Canal by laborers
-
Painting a picture for sale
Production is a process of merging various material inputs and irrelevant inputs in order to make something for consumption. It is the action of creating output, a good or service which has the value and contribution to the beneficial of the individuals. Tiling of soil by friends, construction of canal by laborers, Painting a picture for sale are considered in the production of economics.
A person who is not gainfully employed is called an unemployed person.
-
True
-
False
A person who is not gainfully employed, that is, a person who is not paid in monetary terms or in kind in return of his work, is known as an unemployed person since he cannot contribute in the GDP of a country.
The corruption creates ____________.
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Political inequality
-
Social inequality
-
Economic inequality
-
Religious inequality
Economic inequality is the unequal distribution of income and opportunity between different groups in society. Corruption plays a very important role in creating economic inequality. Education, at all levels, enhancing skills, and training policies can be used alongside social assistance programs to help people out of poverty and to reduce inequality.
Poverty leaves a positive effect on the life and health of man.
-
True
-
False
Poverty brings a harmful effect on the standard of living of the citizen's of a country. People become unhealthy and malnourished due to lack of proper nutrition. Hence, the above mentioned statement is false. Poverty leaves a negative effect on the life and health of man.
Economic resources are ____________.
-
Unlimited
-
Limited in supply and use
-
Limited in supply but have alternative uses
-
Unproductive
Resources which are used for economic activities are called as economic resources. Human life depends on the consumption of various materials which are made up of the resources available on earth. examples : soils, minerals, water ,etc. These resources are finite in number.
India has been witnessing high rate of inflation because __________.
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public expenditure and money supply both are continuously increasing.
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the agricultural and industrial sectors have not performed adequately.
-
both agricultural and administered prices have been hiked.
-
all of the above.
The central problems of an economy is ___________.
-
what to produce
-
how to produce
-
for whom to produce
-
all the above
The central problems of an economy deals with the allocation of its scarce uses, having alternative uses, for production of goods. The central problems are outlined as:
-
What to produce?
Consumer goods or capital goods?
-
How to produce? Using
labour or capital intensive techniques?
-
For whom to produce?
Rich people or poor people
Parallel economy refers to ___________________.
-
traditional economy
-
black money economy
-
agricultural-based economy
-
socialist economy
What is environmental crisis?
-
When there is too much pollution
-
When there is excessive deforestation
-
When the environment is unable to perform the vital life sustenance function
-
None of these
In addition to three central problems of an economy, the additional problem(s) raised by the modern economists is/are _______.
-
the resources are fully utilized or not
-
how efficient is the production and distribution system
-
whether the capacity to produce or grow is increasing or is static
-
all of the above
The central problems of an economy is of high importance but while solving those problems there are many problems which come as derivative problems like whether resources are fully utilized or not on using the present techniques, whether goods are produced and evenly distributed which does not create economic divide, whether the economy is growing in terms of new resources and technology that increases production.
Due to scarcity of resources one must _______.
-
take rational economic decisions
-
trade off between different alternative use of resources
-
use resources efficiently
-
all of the above
‘Scarce means’ is the fundamental problem of economics. It means that the resources in the world are limited whereas the wants of a man are unlimited and never-ending. Due to this, the resources are always insufficient to satisfy all human wants and needs. Apart from being scarce, the resources have alternative uses as well. Thus, it becomes extremely important to use the resources in the most effective and efficient manner.
_______ is the root of all economic problems.
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Diversity
-
Unlimited wants
-
Scarcity
-
Abundance
The basic root of economic problems arises from the fact that resources are limited and wants are unlimited thus the resources are scarce. Society must now choose what to produce, how to produce and for whom to produce.
By scarcity of productive resources we mean ______.
-
limited supply
-
restricted supply
-
non existence of supply
-
fixed supply
Scarce resources refers to the resources which are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs.
During deflation_____.
-
the purchasing power of money increases
-
the purchasing power of money decreases
-
the purchasing power of money remains constant
-
the purchasing power of money fluctuates
During deflation the purchasing power of money will increase.
Who defined mixed economy as "Mixed economy is that economy in which both public and private institutions exercise economic control".
-
Samuelson
-
Anatol Murad
-
Adam Smith
-
JR Hicks
Trees help in reducing the pollution of our environment. Lakhs of trees are planted by people in the month of July every year. The occasion is called ______________.
-
forest Conservation Day
-
plantation month
-
Van Mahotsav
-
wildlife week
(c). Lakhs of trees are planted by people in the month of July every year. The occasion is called Van Mahotsav.
Which of the following is not a central problem of a society?
-
What to produce
-
How to produce
-
For whom to produce
-
When to produce
The central problems of production deals with production of necessary commodities using scarce means of resources. Therefore, "when to produce" is not a central problem as it is assumed that goods are demanded throughout the year because of unlimited human wants.
One country enjoys a comparative advantage over the other in producing oil when _______________.
-
it has more oil than the other country
-
it can produce oil at a lower opportunity cost than the other country
-
it does not need to import oil
-
it wants to export as much oil as possible
One country enjoys a comparative advantage over the other in producing oil when it can produce oil at a lower opportunity cost than the other country .The country enjoys a greater advantage over other countries if the opportunity cost of producing oil in that country is less than others.
Central problem for every economy includes ________.
-
Market
-
What to produce?
-
Competition
-
None of the above
Central problem for every economy includes: What to produce?
Production, distribution and disposition of goods and services are the basic economic activities of life. In the course of these activities, every society has to face scarcity of resources. Because of this scarcity, every society has to decide how to allocate the scarce resources.
It leads to following Central Problems that are faced by every economy:
1. What to produce?
2. How to produce?
3. for whom to produce?
These problems are called central problems because these are the most basic problems of an economy and all other problems revolve around them.
How many indifference curves can touch the price line?
-
Two
-
One
-
As many as possible
-
None of the above
The consumer achieves equilibrium at a point which is in the highest possible indifference curve and which fits the budget of the consumer given the prices of both the commodities. Such a point is only possible when the budget line is tangent to the indifference curve. Therefore, only one indifference curve can touch the budget line.
Which of the following is not one of the central questions that the study of economics is supposed to answer?
-
Who produces what?
-
When are goods produced?
-
Who consumes what?
-
How are goods produced?
The central problem of an economy does not deal with the time of production as it is assumed that human wants are unlimited and goods are required throughout the year. Therefore, the the problem of 'When to produce?' is not regarded as a central problem of the economy.
Which of the following is a cause of economic problem?
-
Scarcity of Resources
-
Unlimited Wants
-
Alternatives Uses
-
All of the above
Causes of Economic Problem:
(i) Unlimited Wants
Human wants are unlimited in numbers. There is no end of human wants; whenever one want is satisfied, automatically the other wants crop up and this goes on and on. There are several wants which are recurring in nature like, food, clothes, shoes, etc. Moreover, human wants are increasing day by day with the development of education, knowledge and civilisation.
(ii) Limited Resources:
In economics, scarcity means that commodities and resources to produce goods and services are less in relation to their demand. Goods and services that satisfy human wants are produced with the help of resources such as land, labour, capital and enterprise. These resources are scarce while wants are unlimited. Due to scarcity of these resources, an economy cannot produce all that goods and services as required by its citizens. Consequently, some wants remain unsatisfied.
(iii) Alternative Uses of Resources:
Means are not only limited but also have alternative uses. Hence, choice has to be made for different alternative uses. For example, electricity can be used for lighting lamps or for cooking food or for operating TV, Fridge, music system etc. Similarly, there are many resources which have got their alternative uses. This characteristic makes resources scarce. Thus, every economy has to choose better alternative uses of resources to which they can be put.
In the decision of "how to produce", what must the economy decide on?
-
Types of goods to be produced.
-
Quality of goods to be produced.
-
Consumer goods and capital goods.
-
Method of production.
The question for "How to produce?" is faced by the economy. Here they should consider both labour intensive techniques as well as capital intensive techniques depending upon the available resources in the economy.
The central problem in economics is that of:
-
Comparing the success of command versus market economies.
-
Guaranteeing that production occurs in the most efficient manner.
-
Guaranteeing a minimum level of income for every citizen.
-
Allocating scarce resources in such a manner that society's unlimited needs or wants are satisfied, so as to maximise utility.
Economics is the study that establishes an effective relationship between unlimited wants and the availability of scarce resources to overcome the economic problem of limited resources so that all the unlimited wants are satisfied, so as to achieve maximum utility by the use of scarce resources.
Which of these is not a major economic problem in India?
-
Over-population.
-
Poverty.
-
Unemployment.
-
None of the above
Over-population is one of the biggest problem of Indian which give rise to many other economic problems like poverty as many people are not able to attain a comfortable lifestyle due to scarce resources and unemployment because due to overpopulation and limited jobs people remain unemployed.
The signs of crisis which created the need for Economic Reforms in 1991 were ________________.
-
Low Forex Reserves
-
Huge National Debt
-
Inflation
-
All of the above
Scarcity can be avoided by limiting ______________.
-
needs
-
wants
-
resources
-
wants and needs
In economics, sustainable development is given the upmost priority as it refers to fulfilment of current economic needs of the people without sacrificing the ability of the future generation to need their needs but if the scarce resources will be consumed in large amount then future generation will not be able to meet their needs and it will result in slower economic growth. Therefore, scarcity can only be cured by limiting needs and wants.
In Economics, the 'central economic problem' means __________.
-
consumers do not have as much money as they would wish
-
there will always be a certain level of unemployment
-
resources are not always allocated in an optimum way
-
output is restricted to the limited availability of resources
The central problems of an economy deals in the production of goods as resources are scarce so there is need to answer some questions where it is decide that :
- · What to produce?
Consumer goods or capital goods?
- ·
How to produce? Using
labour or capital?
- · For whom to produce? Rich people or poor people?
The cost of one thing in terms of the alternative given up is known as ______.
-
opportunity cost
-
real cost
-
actual cost
-
deferred cost
The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.
Opportunity costs are a result of __________.
-
scarcity
-
overproduction
-
technology obsolescence
-
abundance of resources
The cost of the next best alternative foregone is termed as opportunity cost. Opportunity cost, in terms of production of a commodity refers to the resources which the producer has to sacrifice in terms of the next best alternative which could have been produced using them, in order to produce every unit of the given commodity.
Therefore, opportunity cost is a result of scarcity of resources in the economy.
Multiple choice question:
-
Excessive income
-
Alternative use of resources
-
Unlimited wants
-
Limited (scarce) resources
When there is excessive income in the economy then a large part of it is spent on consumption of goods and services and its a human tendency that human needs are unlimited, so when the selection is done between various commodities in the market it is very difficult for all the consumers to decide the product being rational so they face problems inchoosing the product.
Which of the following is the cause of economic insecurity?
-
Poverty.
-
Unemployment.
-
Fall in real wages.
-
All of the above.
Economic insecurity describes the risk of financial loss faced by workers and households as they encounter the changeable events of social life. Our re-considerations suggest a four-part structure for studying the distribution and trend in these economic risks.
First is that a centre on households captures the micro-level risk pooling that can smooth income flows and stabilize economic well-being.
Second, insecurity is related to income instability and the risk of downward mobility into poverty.
Third, difficult events such as unemployment, family closure, or poor health commonly trigger income losses.
Fourth, the belongings of difficult events are explanatory by insurance relationships provided by government programs, employer benefits, and the familiar maintain of family.
The correct option is D.
The most serious economic problem in India is ___________.
-
unemployment
-
rising population
-
poverty
-
all of the above
The most serious economic problems in India are:
Multiple Choice Question:
-
$100kg$ of wheat
-
$80$ tonnes of wheat
-
$8,000$ tonnes of wheat
-
none of these
Opportunity cost of
production of a commodity refers to the resources which have to be sacrifice in terms of the next best alternative which could have been produced using the same resources.
Therefore, the next best alternative which could be produced on the piece of land mentioned here is 80 tonnes of wheat, which is sacrificed for the production of 100 kg of rice.
-
the choice of technique
-
distribution of income
-
market value of the goods and services
-
the choice of goods and services
-
Factorial distribution of income.
-
The choice of technique.
-
The choice of product.
-
None of the above.
The question for "How to produce?" is faced by the economy they should consider both labour intensive techniques as well as capital intensive techniques depending upon the availability of resources in the economy.
Multiple choice question:
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Supply of resources $>$ Demand for resources
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Supply of resources $<$ Demand for resources
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Supply of resources $=$ Demand for resources
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None of these
Scarcity of resources refers to the situation where resources are limited in quantity and have alternative uses in production of various commodities. So the problem of these scarce resources is reflected in the aggregate supply of the economy which is also limited owing to limited source of inputs and unlimited demands as human wants are unlimited.
Multiple Choice Question:
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$0.2$
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$0.75$
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$0.8$
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$1.0$
Output of Good-X decreases by 500 units and output of Good-Y increases by 500 units, when some resources are shifted from the production of X to the production of Y. The marginal opportunity cost is 1.0. The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. The formula to calculate marginal opportunity cost is sacrifice/gains. Therefore, the marginal opportunity cost is 500/500= 1.
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True
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False
In a free economy, the producers will produce goods for those who can afford to pay high price. Poorer sections of the society are often, thus, ignored. As a result, the gap between the rich and the poor enhances.
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True
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False
The slope of production possibility curve is the marginal opportunity cost, which refers to the additional sacrifice that an economy needs to make when it shifts resources and technology from production of one commodity to the other. Since resources are use specific, therefore every time when one more unit of a commodity is produced more units of the other commodity is sacrificed that results in increasing marginal opportunity cost.
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True
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False
The central economic problems rise for the basic fact that the resources in the economy is scarce whereas the wants are unlimited. Therefore, it deals with the efficient allocation of the resources for the production of goods and services in the economy and regulations/intervention of the government can do little about central economic problems.
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True
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False
In a free market economy, prices of commodities in the market are affected by the forces of demand and supply. This generates open competition in the market which leads to optimum allocation and utilization of resources in the economy without any planning or intervention of any authority.
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True
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False
The slope of production possibility curve shows the marginal opportunity cost which refers to the additional sacrifice that an economy must make when they shift resources and technology from production of one commodity to the other. Since resources are use specific, therefore, each time when one more unit of a commodity is produced a larger quantity of the other commodity is required to be sacrificed. This results in increasing marginal opportunity cost., which is denoted by the slope of the PPC.
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True
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False
Economic problem arises when ____________.
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wants are unlimited
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resources are unlimited
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alternative uses of resources
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all of the above
The central economic problems rise for the basic fact that the resources in the economy is scarce with many alternative uses whereas the wants are unlimited. Therefore, it deals with the efficient allocation of the resources for the production of goods and services in the economy.
The problem of resource allocation would not arise if resources had no alternatives uses.
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True
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False
Economics deals in the problems of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants because these resources are scarce and have alternative uses whereas human wants are unlimited
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True
-
False
Marginal opportunity cost $= \dfrac{\triangle \,\text{Loss of output of Good - 2}}{\triangle\, \text{Gain of output of Good - 1}} = \left[\dfrac{50}{10} = 5\right]$
Marginal opportunity cost $=5$.
If there were no choices in resource allocation, microeconomics would not have existed.
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True
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False
Micro economics deals with solving the central problem of the economy which deals with resource allocation. It is the study of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants. This is because these resources are scarce and have alternative uses whereas human wants are unlimited.
Lack of scarcity implies lack of economic problem.
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True
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False
Economics deals in the problems of how resources are allocated in the production of various goods and services in the economy for the satisfaction of human wants. This is because these resources are scarce and have alternative uses whereas human wants are unlimited.