GSEB Class 11 Economics Important Questions Chapter 2 Fundamental Concepts and Terminologies

Gujarat Board GSEB Class 11 Commerce Economics Important Questions Chapter 2 Fundamental Concepts and Terminologies Important Questions and Answers.

GSEB Class 11 Economics Important Questions Chapter 2 Fundamental Concepts and Terminologies

Short Answer Type Questions

Question 1.
Define price.
Answer:
If a commodity is exchanged for money then such monetary exchange-value is termed as ‘price’.

Question 2.
What is use-value?
Answer:
The utility i.e. usefulness of consuming a good (commodity) is called its use-value.

Question 3.
Define exchange.
Answer:
Exchange is the practice of releasing right .on something on a condition of receiving an equivalent in return.

Question 4.
What is exchange-value?
Answer:
When a commodity/service is exchanged for another commodity/service than the worth of one unit of this commodity is measured in terms of the amount of other commodity for which it is exchanged. Such worth is called exchange-value.

Question 5.
What are goods?
Answer:
Commodities that have physical existence i.e. are tangible are called goods. Example: Food items, metal, fuel, furniture, vehicles, etc. are goods.

Question 6.
What are services?
Answer:
Commodities which are intangible or do not have a physical existence are called services. Example: Cooking, transportation, telecom, courier, etc. are services.

Question 7.
What are physical (tangible) goods?
Answer:
Goods that can be touched and seen are known as physical or tangible goods. Example: Ball, bat, television, refrigerator, stove, mobile phone, etc.

Question 8.
What are intangible goods or services?
Answer:
Goods (i.e. activities) that cannot be touched and seen are known as services. Services neither have physical existence nor can be measured cardinally. Example: Services of education, medical consultancy, music, cooking, etc.

Question 9.
What are economic goods?
Answer:
Goods which have an exchange value in the market are called economic goods. Example: All goods such as metal, sugar, electronics, books, etc.

Question 10.
What are durable goods?
Answer:
Goods that can be stored and used repeatedly for a long period ot time are called durable goods. Example: Shoes, clothes, television, refrigerator, etc.

Question 11.
What are private goods? Which important characteristics they possess?
Answer:
Goods that are be possessed and owned by a private individual are called Private goods. These goods possess the characteristics of excludability and competitiveness.

Question 12.
What do you mean by characteristic of excludability possessed by a good?
Answer:
Excludability means, once a good is owned and being used by one individual, another individual cannot possess and use it at the same time.

Question 13.
Give an example to explain excludability.
Answer:
If a child buys a packet of biscuit from the market that has competition among buyers, he becomes the owner of that packet. All other children will be excluded from having the same packet of biscuit.

Question 14.
What are public goods? Which important characteristic they possess?
Answer:
Goods that can be used by many individuals at the same time are called Public goods. These goods possess the characteristics of joint demand and collective consumption.

Question 15.
State few examples of public goods.
Answer:
A public garden or the garden of a housing society, a village well, street lights, etc.

Question 16.
What are producers’ goods?
Answer:
When a good is used at the intermediate stage of production of a final good or when it is purchased by a producer to produce a final good and it is not directly consumed by the consumers but this good helps in the production of a final good then such a good is called a producers’ good.

Question 17.
What do you mean by the statement ‘wealth must be useful’?
Answer:
Wealth must be useful in satisfying human wants or needs. Hence, goods which are useful in satisfying needs of human beings can only be considered as wealth.

Question 18.
State two characteristic of wealth.
Answer:

1. Wealth should be scarce,
2. It constitutes goods which are capable of exchange.

Question 19.
Why goods must be durable?
Answer:
Goods that are durable goods can be used in future for exchange and for satisfying future needs and hence become wealth. Goods which perish after using just once cannot be used for future transactions so cannot be considered wealth.

Question 20.
State the two main types of wealth
Answer:

1. Individual wealth and social (societal) wealth
2. National wealth and international wealth.

Question 21.
What is societal wealth?
Answer:
Wealth owned by society and meant for collective consumption is called societal (or social) wealth. For example, a check-dam.

Question 22.
What is national wealth?
Answer:
Wealth belonging to a nation and possessed and treasured by a nation is called national wealth. For example, rivers, mountains, literature and scriptures, etc. are national wealth.

Question 23.
What is international wealth?
Answer:
Wealth belonging to the earth that can be treasured by all nations and which can be developed for benefit of all is called international wealth. For example, oceans are such a common wealth which are used as international waterway and benefit all the nations.

Question 24.
What is welfare?
Answer:
Prosperity and enhancement in the standard of living as well as overall life is termed as welfare.

Question 25.
What is individual welfare?
Answer:
When an individual make efforts to improve his/her standard of living and wellbeing, it becomes a subject of individual welfare.

Question 26.
What is collective welfare?
Answer:
When nations and governments aim at growth, development, etc. it becomes a subject matter of collective welfare.

Question 27.
Define production.
Answer:
The activity of converting raw materials and resources into final goods which satisfy human wants is called production.

Question 28.
State Marshall’s definition of land.
Answer:
According to Marshall, all natural assets which help in production or economic activities constitute land. As per this definition, climate, water resources, fertility, mineral resources, etc. all these natural assets help in production and hence constitute land.

Question 29.
State two characteristics of land as a factor of production.
Answer:

1. Land is not manmade. It is a gift of nature.
2. The total supply of land is fixed.

Question 30.
Define labour.
Answer:
The physical or intellectual work done by humans under supervision by some authority in order to earn returns is called labour.

Question 31.
State two characteristics of labour.
Answer:

1. Labour and labourer cannot be separated from each other.
2. Labour cannot be stored.

Question 32.
What is Capital?
Answer:
All manmade goods which help in production are called capital.

Question 33.
State two characteristics of capital.
Answer:

1. Capital is a manmade factor of production.
2. It is the most mobile of all factors of production.

Question 34.
Define entrepreneur.
Answer:
Entrepreneur is the factor which brings together or say coordinates all other factors of production for the production process. Without entrepreneur, economic activity is not possible.

Question 35.
State two characteristics of entrepreneur.
Answer:

1. Entrepreneur decides the activity that will take place,
2. It is known as risk taking factor.

Question 36.
State the types of changes that economic activities experience?
Answer:

1. Irregular changes,
2. Seasonal changes,
3. Long run changes and
4. Cyclical changes.

Question 37.
Define irregular changes.
Answer:
Changes that occur accidentally in an economic activity are called irregular changes.

Question 38.
Define seasonal changes.
Answer:
Changes that occur quite often with change in season are called seasonal changes.

Question 39.
Define long run changes.
Answer:
Some changes occur in a specific direction in the form of a trend. These are directional changes which occur in an activity.

Question 40.
Define cyclical changes.
Answer:
Changes occurring in repeated manner i.e. in cycles are called cyclic changes.

Question 41.
State Hawtrey’s definition of trade cycle.
Answer:
Trade cycles are continuous phases of good and bad changes occurring in the economy.

Question 42.
State two characteristics of trade cycle.
Answer:

1. They show dynamic changes in the economy.
2. They show positive and negative changes taking place in the economy.

Question 43.
What is boom?
Answer:
The period when economic activity reaches the maximum growth level in a given time period is called the ‘Boom period’ or simply ‘Boom’.

Question 44.
Why boom is also called peak?
Answer:
In the Boom period, the demands of goods/ services are at its peak and so do incomes and profits. Thus, this period is also called ‘peak’.

Question 45.
What is recession? How does take place?
Answer:
The period that comes after the ‘Boom’ is’ called ‘recession’. In a given time period, when economic activity reaches to its peak which in turn takes the investments and employment also to the peak i.e. the highest possible levels, a slowdown occurs. As a result, demand slows down and so do investment and unemployment and recession occur.

Question 46.
What is depression?
Answer:
During the slowdown in the recession phase when all activities reach a minimum level, it leads to phase called ‘depression’.

Question 47.
What is recovery?
Answer:
When depression lasts for some time, the suppressed demand starts emerging. Government may also try to boost investments and employment through various strategies. Moreover, at times technological changes take place in the long run. All this improves the market situation and recovery of market takes place.

Long Answer Type Questions

Question 1.
State the two view points of value and explain them.
Answer:
Value can be explained from two viewpoints. They are:

1. From viewpoint of use i.e. ‘use-value’
2. From viewpoint of exchange i.e. ‘exchange-value’.

1. Use-value:

• The utility i.e. usefulness of consuming a good (commodity) is called its use-value.
• It refers to how useful does the good become in satisfying the need of the consumer. Use-value is the qualitative aspect of value.

Example:
Food, water, sunlight, etc. have very high use-value for everyone. However, material things like iron, wood, petrol, etc. have use-value only for people who get some benefit out of these commodities.

2. Exchange-value:

• Exchange is the practice of releasing right on something on a condition of receiving an equivalent in return.
• When a commodity/service is exchanged for another commodity/service than the worth of one unit of this commodity is measured in terms of the amount of other commodity for which it is exchanged. Such worth is called exchange-value.

Example:
If 1 kg of wheat can be exchanged for 1 kg of rice then the exchange value of 1 kg wheat is 1 kg of rice.
Relationship Between Use-value and Exchange-value

Question 2.
Explain the relationship between use-value and exchange-value.
Answer:

• If a commodity has high use-value then it is not necessary that it will have a high exchange-value. But if a commodity has high exchange-value then it surely has some use-value.
• Exchange-value of a commodity is determined by the scarcity of that resource compared to its need/use.
• The demand of goods is raised when they have some use-value. If demanded goods are scarce in supply in relation to their demand or if their supply (i.c. availability in the market) is controlled by a few people then they have a higher exchange-value.

Example:

• Precious metals, diamonds, etc. have very high exchange-value.
• A contradictory situation is that if goods are highly useful i.e. have very high use-value and so have very high demand but have unlimited supply then they do not have exchange-value or may even have very low exchange-value.

Example:
(a) Though air and sunlight have very high usefulness for life, they have no exchange-value as they are abundant in supply.
(b) In earlier times, even water was considered a good with high use-value but no exchange-value. However, jn present times, the availability of water is reducing in relation to its need and use by people and so it has started commanding an exchange-value.

• In economics, use of the word ‘value’ is usually in context of ‘exchange-value’ of a commodity with another commodity.
• From this discussion we conclude that ‘value’ means the worth of one unit of a commodity in terms of units of another commodity in exchange.

Price:

• If a commodity is exchanged for money then such monetary exchange-value is termed as ‘price’.
• Price means the exchange-value (or worth) of a commodity measured in terms of units of currency.
  Goods and Services

Question 3.
Classify the various types of goods and services with respect to economics.
Answer:
Classification of various goods and services with respect to economics:
1. Physical (Tangible) goods and Intangible goods:
(a) Tangible goods:

• Goods that can be touched and seen are known as physical or tangible goods.
• We can measure quantity of these goods.
• Example: Ball, bat, television, refrigerator, stove, mobile phone, etc.

(b) Intangible goods (services):

• Goods (i.e. activities) that cannot be touched and seen are known as services.
• Services neither have physical existence nor can be measured cardinally. Example: Services of education, medical consultancy, music, cooking, etc.

2. Economic goods and non-economic goods:
(a) Economic goods:

• Goods which have an exchange value in the market are called economic goods.
• Such goods command an exchange value since they are scarce in supply compared to their demand. Moreover their supply can be controlled.
• Example: All goods such as metal, sugar, electronics, books, etc.

(b) Non-economic goods:

• Goods which do not have exchange value are called non-economic goods. Such goods are abundant in supply.
• Though these goods are consumed by people they do not pass through the economic process of production and distribution.
• Example: Sunlight and air.

3. Durable goods and Perishable goods:
(a) Durable goods:

• Goods that can be stored and used repeatedly for a long period of time are called durable goods.
• Example: Shoes, clothes, television, refrigerator, etc.

(b) Perishable goods:

• Goods that do not last long and can be consumed only once are known as perishable goods.
• Example: Milk, fruits, meat, etc.

4. Private goods and Public goods:
Based on their ownership and nature of use goods can be classified as private goods and public goods

(a) Private goods:

• Goods that are be possessed and owned by a private individual are called Private goods.
• The owner of the goods takes all decision regarding these goods.
• These goods possess the characteristics of excludability and competitiveness.
• Excludability means, once a good is owned and being used by one individual, another individual cannot possess and use it at the same time.
• In order to obtain ownership of such excludable goods, individuals need to compete.

Example:

• If a child buys a packet of biscuit from the market that has competition among buyers, he becomes the owner of that packet. All other children will be excluded from having the same packet of biscuit.
• Thus, the individual who pays the price gets the good and others cannot have the same unit. For example, one who does not pay price for a mobile phone, does not get it.

(b) Public goods:

• Goods that can be used by many individuals at the same time are called Public goods.
• These goods possess the characteristics of joint demand and collective consumption.
• Such goods are jointly demanded by many people. If one individual uses it the other cannot be excluded from its use and in this way such goods are collectively consumed. Hence these are called public goods.
• These goods are either provided by the government for all or some people pay for it together.

Example:
A public garden or the garden of a housing society, a village well, street lights, etc.

5. Consumers’ goods and Producers’ goods:
Goods can satisfy human wants directly or indirectly.
(a) Consumers’ goods:

• When a consumer consumes a good and the good is capable of directly satisfying a particular want then it is called a consumer good. These goods have passed the final stage of production.
• Example: Cooked food.

(b) Producers’ goods:

• When a good is used at the intermediate stage of production of a final good or when it is purchased by a producer to produce a final good and is not directly consumed by the consumers but the good helps in the production- of a final good then such a good is called a producers’ good.
• Producers’ goods are partly finished goods that work as inputs (such as raw material) in the production of other goods including final goods.

Example:

• Cotton used to make cloth, machines are used in factories to produce garments, a tractor is used in producing food grains, a utensil used to cook food, etc. .
• Producers’ goods satisfy human wants through the final good i.e. indirectly and not directly.

Question 4.
Explain tangible and intangible goods.
Answer:
Physical (Tangible) goods and Intangible goods:
(a) Tangible goods:

• Goods that can be touched and seen are known as physical or tangible goods.
• We can measure quantity of these goods.
• Example: Ball, bat, television, refrigerator, stove, mobile phone, etc.

(b) Intangible goods (services):

• Goods (i.e. activities) that cannot be touched and seen are known as services.
• Services neither have physical existence nor can be measured cardinally.
• Example: Services of education, medical consultancy, music, cooking, etc.

Question 5.
Explain economic and non-economic goods.
Answer:
Economic goods and non-economic goods:
(a) Economic goods:

• Goods which have an exchange value in the market are called economic goods.
• Such goods command an exchange value since they are scarce in supply compared to their demand. Moreover their supply can be controlled.
• Example: All goods such as metal, sugar, electronics, books, etc.

(b) Non-economic goods:

• Goods which do not have exchange value are called non-economic goods. Such goods are abundant in supply.
• Though these goods are consumed by people they do not pass through the economic process of production and distribution.
• Example: Sunlight and air.

Question 6.
State the characteristics of wealth.
Answer:
Characteristics of wealth:

• It should possess the characteristic of usefulness.
• It should be scarce.
• It should have physical or intellectual existence.
• Wealth constitutes goods which are capable of exchange.
• Wealth must possess durability.

Question 7.
State and explain the types of wealth.
Answer:
Wealth can be classified into two types. They are:
1. Individual wealth and Social wealth:

• Wealth owned by an individual and meant for private consumption is called individual wealth. For example, a house.
• Wealth owned by society and meant for collective consumption is called societal (or social) wealth. For example, a check-dam.

2. National wealth and international wealth:

• Wealth belonging to a nation and possessed and treasured by a nation is called national wealth.
• It directly or indirectly helps to generate exchange value for the nation.
• For example, rivers, mountains, literature and scriptures, etc. are national wealth.
• Wealth belonging to the earth that can be treasured by all nations and which can bo developed for benefit of all is called international wealth.
• For example, oceans are such a common wealth which are used as international waterway and benefit all the nations.

Question 8.
What do you mean by welfare? Explain.
Answer:
Welfare:

• Prosperity and enhancement in the standard of living as well as overall life is termed as welfare.
• The concept of welfare is used by ail philosophies ranging from spiritual sciences to economics.
• All human activities, may they be economic or non-economic are ultimately done with the purpose of improving life or say for welfare.
• Welfare can be measured quantitatively in the context of growth and qualitatively in the context of development.

In economics, welfare can be classified and studied in two parts. They are:

1. Individual welfare: When an individual make efforts to improve his/her standard of living and wellbeing, it becomes a subject of individual welfare.
2. Collective welfare: When nations and governments aim at improvement, growth, development, etc. it becomes a subject matter of collective welfare.

Question 9.
Classify welfare and define the classifications.
Answer:
Welfare:

• Prosperity and enhancement in the standard of living as well as overall life is termed as welfare.
• The concept of welfare is used by ail philosophies ranging from spiritual sciences to economics.
• All human activities, may they be economic or non-economic are ultimately done with the purpose of improving life or say for welfare.
• Welfare can be measured quantitatively in the context of growth and qualitatively in the context of development.

In economics, welfare can be classified and studied in two parts. They are:

1. Individual welfare: When an individual make efforts to improve his/her standard of living and wellbeing, it becomes a subject of individual welfare.
2. Collective welfare:  When nations and governments aim at improvement, growth, development, etc. it becomes a subject matter of collective welfare

Question 10.
Explain the relationship between wealth and welfare.
Answer:
Relationship between wealth and welfare:
(a) For individual wealth:
Generally, as wealth increases, welfare increases. The reason for this is that more wealth increases the capacity to generate monetary value, greater power to exchange goods or purchasing power for the owner and hence greater wellbeing. This is largely true in case of individuals i.e. individual wealth.

(b) For national wealth:

• When national income increases, national wealth can increase. But, the welfare of people will increase only if this national income is distributed proportionately among all sections of the society and among all sectors.
• Nation’s welfare also depends upon social and cultural formation and hence there is not always a direct relation between wealth and welfare in a society.

Question 11.
Give a brief idea about production and factors of production.
Answer:
Production:

• The activity of converting raw materials and resources into final goods which satisfy human wants is called production.
• By converting the nature of resources, their utility increases. In this sense, production can also be defined as a process which increases utility of resources.

Example:
When wood (a resource) is converted into chairs its utility increases. The process of converting wood into chair is called production.

Factors of production:

• The agents that help in a process of conversion or production are called ‘Factors of Production’. There are four factors of production. They are:
  1. Land
  2. Labour
  3. Capital and
  4. Entrepreneur.
• All these factors are equally important in the process of production.
• In a system of just (fair) distribution of income, the total income generated from various activities is distributed among each factor of production as per the productivity of each factor or its contribution in generating that income.
• As per Alfred Marshall, there are two basic categories of factors of production
  1. Nature and
  2. Human beings.

Question 12.
Explain capital as a factor of production.
Answer:
Capital:

• All manmade goods which help in production are called capital. Capital differs from land and labour as it is a ‘produced’ factor of production. In other words, it is a manmade factor of production.
• For example, a tractor is a ‘produced’ factor of production which further helps in the production of agricultural goods.

Characteristics of capital:

• Capital is a manmade factor of production.
• It is the most mobile of all factors of production.
• The increasing demand for capital in present times owing to increasing capital intensive methods of production has resulted in increasing scarcity of this factor.
• The remuneration of capital is called ‘interest’.

Question 13.
State the meaning of entrepreneur as a factor of production.
Answer:
Entrepreneur:

• Entrepreneur is the factor which brings together or say coordinates all other
  factors of production for the production process. Without entrepreneur, economic activity is not possible.
• Entrepreneur is the person who establishes the enterprise and takes the risk of coordinating economic activities.
• This factor of production i.e. the entrepreneur does not get fixed return but tries to generate income by running the economic activity successfully. He/ she may even incur a loss if the activity does not function well.

Characteristics of entrepreneur:

• This factor decides the activity that will take place.
• This factor is known as the risk taking factor.
• It possesses the quality of co-ordination. In other words, ‘entrepreneurship’ is a quality.
• The remuneration of this factor is called profit.

Question 14.
Entrepreneur is called the risk taking factor of production. Give reason.
OR
Entrepreneur possesses the quality of c-ordination. Give reason.
Answer:
There are four factors of production namely land, labour, capital and entrepreneur.

• Entrepreneur is the factor which brings together or say coordinates all other factors of production for the production process.
• Without entrepreneur, economic activity is not possible.
• Entrepreneur is the person who establishes the enterprise and takes the risk of coordinating economic activities.
• This factor of production i.e. the entrepreneur does not get fixed return but tries to generate income by running the economic activity successfully.
• He/she may even incur a loss if the activity does not function well.
• Thus, entrepreneur is called the risk taking factor of production (or possesses the quality of co-ordination.)

Question 15.
What types of changes do economic activities experience? Discuss.
OR
Explain the following. Each carries two marks:
(1) Irregular changes,
(2) Seasonal changes,
(3) Long run regular changes and
(4) Cyclical changes.
Answer:
Human life is highly dynamic. It keeps on changing with time. Similarly, economic activities go through phases of dynamic changes.

Economic activities experience changes of four types. They are discussed below:
1. Irregular changes:
Changes that occur accidentally in an economic activity are called irregular changes.

Example:

• Floods, famines, storms, fire, etc. Such accidents affect the economic activity in the short run and sometimes in the long run too.
• These changes may generally occur and/or have their impact only in few sectors or few regions of an economy. For example, flood may have impact only in the agricultural sector or only in the industrial sector.

2. Seasonal changes:
Changes that occur quite often with change in season are called seasonal changes.

Example:
Demand for certain goods changes with change in seasons. This then affect production and employment.

3. Long run regular changes:
Some changes occur in a specific direction in the form of a trend. These are directional changes which occur in an activity.

Example: Some regular sales trends.

4. Cyclical changes:

• Changes occurring in repeated manner i.e. in cycles are called cyclic changes.
• The fluctuations arising in an economy over its long run creates upward and downward swings in the growth of economic activities. These fluctuations i.e. rise and fall in economic activities are called cyclical changes of economic activities.

Question 16.
How does depression occur in market?
Answer:
During recession phase, consumers start believing and expecting that since prices are falling they will still fall. This stops them from buying and the demand further decreases. When the demand falls, the production and employment also falls. This leads to more reduction in the demand which then finally causes depression.

Question 17.
Boom and recession are cyclic. Give reason.
Answer:

• Boom is attained when economic activity reaches the maximum growth level in a given time period.
• In the Boom period, the demands of goods/services are at its peak and so do incomes and profits.
• Just like after tides the ebb must come, after boom recession must come. The period that comes after the ‘boom’ is called ‘recession’.
• During the boom period, when economic activity reaches to its peak which in turn takes the investments and employment also to the peak i.e. the highest possible levels, a slowdown occurs.
• As a result, demand slows down and so do investment and employment and recession occur.
• Thus, boom and recession are cyclic.

Multiple Choice Questions

Question 1.
Which word do we use in lieu of each other in our everyday life?
(A) Rate and amount
(B) Amount and value
(C) Price and value
(D) Rate and value
Answer:
(C) Price and value

Question 2.
The concept of price and value can be understood from which view-point?
(A) Viewpoint of use
(B) Viewpoint of price and value
(C) Viewpoint .of exchange
(D) Both (A) and (C)
Answer:
(D) Both (A) and (C)

Question 3.
If a commodity has high use-value it does not necessarily mean it has
(A) High exchange value
(B) High price value
(C) High demand
(D) Both (A) and (C)
Answer:
(A) High exchange value

Question 4.
If goods are highly useful but have then they do not have exchange value.
(A) Excessive demand
(B) Unlimited supply
(C) Scarce demand
(D) Scarce supply
Answer:
(B) Unlimited supply

Question 5.
When a commodity is exchanged for money, such an exchange is called
(A) Price
(B) Rate
(C) Amount
(D) All of these
Answer:
(A) Price

Question 6.
Units or stock of goods can be measured
(A) Systematically
(B) Intangibly
(C) Cardinally
(D) Occasionally
Answer:
(C) Cardinally

Question 7.
Which of the following cannot be measured cardinally?
(A) Fruits
(B) Coaching
(C) Shipment
(D) Hardware chips
Answer:
(B) Coaching

Question 8.
Into how many main categories can we classify goods and services?
(A) 2
(B) 10
(C) 5
(D) 4
Answer:
(C) 5

Question 9.
Goods which do not have exchange value are called
(A) Perishable goods
(B) Public goods
(C) Intangible goods
(D) Non-economic goods
Answer:
(D) Non-economic goods

Question 10.
Which goods do not pass through economic process?
(A) Non-economic goods
(B) Public goods
(C) Durable goods
(D) Perishable goods
Answer:
(A) Non-economic goods

Question 11.
Supply of which goods can be controlled?
(A) Durable goods
(B) Intangible goods
(C) Private goods
(D) All of these
Answer:
(D) All of these

Question 12.
Goods that can be classified on the basis of ownership and nature of use are called ________
(A) Durable and perishable goods.
(B) Private and public goods
(C) Consumer goods and public goods
(D) Physical and intangible goods
Answer:
(B) Private and public goods

Question 13.
Private goods possess the characteristics of ________
(A) Excludability
(B) Collective consumption
(C) Competitiveness
(D) Both (A) and (C)
Answer:
(D) Both (A) and (C)

Question 14.
Public good possess the feature of
(A) Joint demand
(B) Collective consumption
(C) Excludability
(D) Both (A) and (B)
Answer:
(D) Both (A) and (B)

Question 15.
One of the important characteristic of consumer goods is
(A) They are jointly demanded
(B) They last very long
(C) They satisfy human want directly
(D) They do not command exchange value
Answer:
(C) They satisfy human want directly

Question 16.
Which good is used at the intermediate stage of production of final good?
(A) Private goods
(B) Durable goods
(C) Producer’s goods
(D) All of these
Answer:
(C) Producer’s goods

Question 17.
The subject of wealth has become extremely important in economics since the time of
(A) Adam smith
(B) Alfred Marshall
(C) Lionel Robbins
(D) Kautilya
Answer:
(A) Adam smith

Question 18.
As per wealth is useful, scarce and capable of getting exchanged.
(A) Lionel Robbins
(B) Marshall
(C) Adam Smith
(D) Paul
Answer:
(B) Marshall

Question 19.
Which of the following is not a characteristic of wealth?
(A) It should be scarce
(B) It should be perishable
(C) It should have physical presence
(D) It should have intellectual existence
Answer:
(B) It should be perishable

Question 20.
One can broadly classify wealth in ________ types.
(A) 2
(B) 4
(C) 5
(D) 10
Answer:
(A) 2

Question 21.
Sea is a ________ wealth.
(A) National
(B) International
(C) Social
(D) All of these
Answer:
(B) International

Question 22.
Which form of wealth is incorrect as per classification of economics?
(A) National wealth
(B) International wealth
(C) Societal wealth
(D) None of these
Answer:
(D) None of these

Question 23.
In economics, welfare can be studied as
(A) Societal welfare
(B) Individual welfare
(C) Collective welfare
(D) Both (B) and (C)
Answer:
(D) Both (B) and (C)

Question 24.
Production ________
(A) Increases utility of resources
(B) Satisfies human wants
(C) Converts raw material into finished products
(D) All of these
Answer:
(D) All of these

Question 25.
According to Marshall, factors of production can be categorized as
(A) Nature
(B) Artificial
(C) Human beings
(D) Both (A) and (C)
Answer:
(D) Both (A) and (C)

Question 26.
‘All natural assets which help in production or economic activities are part of land’. Whose view is this?
(A) Paul Samuelson
(B) Lionel Robbins
(C) Adam Smith
(D) Alfred Marshall
Answer:
(D) Alfred Marshall

Question 27.
Capital is different from land as labour because it is ________ factor of production.
(A) Durable
(B) Perishable
(C) Produced
(D) Scarce
Answer:
(C) Produced

Question 28.
Which is the most mobile factors of production?
(A) Labour
(B) Entrepreneur
(C) Capital
(D) All of these
Answer:
(C) Capital

Question 29.
The remuneration of capital is called ________
(A) Profit
(B) Interest
(C) Margin
(D) Income
Answer:
(B) Interest

Question 30.
________ factor of production is known as a risk taking factor.
(A) Entrepreneur
(B) Capital
(C) Labour
(D) Both (A) and (C)
Answer:
(A) Entrepreneur

Question 31.
Remuneration of entrepreneur is called ________
(A) Interest
(B) Income
(C) Profit
(D) Salary
Answer:
(C) Profit

Question 32.
Which of the following is not a dynamic change of trade cycles?
(A) Long run regular trend
(B) Seasonal changes
(C) Irregular changes
(D) None of these
Answer:
(D) None of these

Question 33.
How many types of changes occur in trade cycle?
(A) 2
(B) 4
(C) 5
(D) 6
Answer:
(B) 4

Question 34.
According to ________, trade cycle is an interval that embraces alternating periods of prosperity and depression.
(A) Hawtrey
(B) Samuelson
(C) Haberler
(D) Heathrow
Answer:
(C) Haberler

Question 35.
________ said trade cycles are continuous phases of good and bad changes.
(A) Heathrow
(B) Hawtrey
(C) Hawtrey
(D) Samuelson
Answer:
(B) Hawtrey

Question 36.
How many phases of trade cycle are there?
(A) 2
(B) 4
(C) 5
(D) 6
Answer:
(B) 4

Question 37.
Which of the following is not a phase of trade cycle?
(A) Depression
(B) Fall
(C) Recovery
(D) Boom
Answer:
(B) Fall