Question 1

Adam Smith, the father of modern economic theory, defined economics as a subject, which is mainly concerned with the study of nature and causes of generation of
A)wealth
B)welfare
C)hipness
D)scarcity

Accepted Answer

Adam Smith, often referred to as the father of economics, is best known for his work "The Wealth of Nations." In this seminal book, he focuses on the generation, accumulation, and distribution of wealth, laying the foundation for classical economics.

Question 2

introduced the concept of welfare in the study of economics:
A)fischer
B)alfred marshall
C)j s mill
D)adam smith

Accepted Answer

Alfred Marshall is credited with introducing the concept of welfare in the study of economics, particularly through his work "Principles of Economics" where he emphasized on the importance of welfare or well-being in economic analysis.

Question 3

Who defined economics as: a science which studies human behavior as a relationship between ends and scarce means which have alternative uses:
A)j b say
B)alfred marshall
C)david ricardo
D)robbins

Accepted Answer

Lionel Robbins defined economics as a science which studies human behavior as a relationship between ends and scarce means which have alternative uses. This definition emphasizes the choices and trade-offs that individuals and societies face due to limited resources.

Question 4

The problem of scarcity and choice making can be depicted using the tool of curve.
A)demand
B)isoquant
C)indifference
D)production possibility

Accepted Answer

The production possibility curve (PPC) illustrates the problem of scarcity by showing the maximum feasible amounts of two commodities that a society can produce when all its resources are fully and efficiently utilized. It also demonstrates the concept of opportunity cost and the need for making choices, as producing more of one good requires sacrificing some amount of the other.

Question 5

Macroeconomicsis primarily concerned with aggregates. Which of the following is not a macroeconomic aggregate?
A)decision making by a household
B)the unemployment rate, and inflation levels
C)national income
D)the supply of money

Accepted Answer

Macroeconomics focuses on the economy as a whole, including topics like the unemployment rate, inflation levels, national income, and the supply of money. Decision making by a household is a microeconomic issue, as it pertains to individual or single economic units rather than the economy in aggregate.

Question 6

Scientific attempts to describe economic relationships are :
A)factual and can never be wrong
B)accurate ways to predict political viewpoints
C)known as positive economics
D)directed at the fairness of social programs

Accepted Answer

Positive economics focuses on describing and explaining economic phenomena and relationships as they are, rather than how they should be, making it a scientific approach to understanding economics.

Question 7

The method consistsin deriving conclusionsfrom general truths, takesfew general principles and applies them draw conclusions.
A)inductive
B)deductive
C)empirical
D)scientific

Accepted Answer

The method described is deductive reasoning, which starts with a general statement or hypothesis and examines the possibilities to reach a specific, logical conclusion. Inductive reasoning, in contrast, makes broad generalizations from specific observations. Empirical methods are based on observation and experiment, and while scientific methods can involve both inductive and deductive reasoning, the description specifically matches the process of deductive reasoning.

Question 8

is a term referring to an intellectual controversy over epistemology, research methodology between Carl Menger, and Gustav von Schmoller.
A)methodenstreit
B)laissez-faire
C)cetris paribus
D)quid proquo

Accepted Answer

Methodenstreit refers to the methodological dispute in the late 19th and early 20th centuries between the Austrian School, led by Carl Menger, and the German Historical School, led by Gustav von Schmoller, over the appropriate methodology for economics.

Question 9

Inductive method which also called empirical method was adopted by the:
A)marginalist school
B)mercantilists
C)physiocrats
D)historical school of economists

Accepted Answer

The historical school of economists adopted the inductive method, focusing on empirical and historical data to understand economic phenomena.

Question 10

Decisions made in households, firms, and government are the focus of:
A)positive economic
B)microeconomics
C)normative economics
D)macroeconomics

Accepted Answer

The answer of Decisions made in households, firms, and government...

Question 11

Knowledge used to combine resources productively is called:
A)comparative advantage
B)capitalism
C)entrepreneurship
D)technology

Accepted Answer

Technology encompasses the knowledge and skills used to combine resources effectively, leading to productive outcomes.

Question 12

Economic efficiency for the entire economy requires that :
A)potential gains to anyone necessitate losses to another
B)all goods be produced at their lowest possible opportunity costs
C)maximum-valued output is obtained from given resource
D)all of the above

Accepted Answer

Economic efficiency for the entire economy requires that all of the above conditions are met.

Question 13

Theories are:
A)much more complicated than common sense
B)scientific only if based on normative value judgments
C)proven if only a few unimportant exceptions exist
D)developed when we collect data, try to explain how things work, and then

Accepted Answer

Theories are developed through the collection of data and attempts to explain how things work, forming a systematic framework for understanding phenomena.

Question 14

Division of Labour is limited by the extent of:
A)supply
B)demand
C)price
D)market

Accepted Answer

Division of Labour is limited by the extent of the market because the larger the market, the more specialized workers can become, leading to more efficient production processes.

Question 15

Milton Friedman restated the :
A)labour theory
B)profit theory
C)quantity theory of money
D)wage theory

Accepted Answer

Milton Friedman is best known for restating the quantity theory of money, which emphasizes the relationship between the supply of money in an economy and the level of prices of goods and services.

Question 16

If the value of a variable varies as a consequence of the variation in the value of some other variable, it is called:
A)exogenous variable
B)endogenours v ariable
C)stock
D)flow

Accepted Answer

The answer of If the value of a variable varies...

Question 17

Which of the following concepts are most closely associated with J.M. Keynes?
A)control of the money supply
B)marginal utility theory
C)indifference curve analysis
D)marginal efficiency of capital

Accepted Answer

Keynes is most closely associated with the concept of the marginal efficiency of capital, which is a principle in his theory that describes the rate of return on investment as it relates to the cost of capital. This concept is central to Keynesian economics, which focuses on how in the short run, especially during recessions, economic output is strongly influenced by aggregate demand.

Question 18

Which of the following is an example of economic overhead?
A)schools
B)roads and railwlays
C)sanitary facilities
D)hospitals

Accepted Answer

Roads and railways are considered economic overhead because they are fundamental infrastructure that supports economic activities by facilitating transportation and communication.

Quiz 6: Economic Theory and Methodology: Exploring the Fundamentals of Economics

Adam Smith, the father of modern economic theory, defined economics as a subject, which is mainly concerned with the study of nature and causes of generation of

introduced the concept of welfare in the study of economics:

Who defined economics as: a science which studies human behavior as a relationship between ends and scarce means which have alternative uses:

The problem of scarcity and choice making can be depicted using the tool of curve.

Macroeconomicsis primarily concerned with aggregates. Which of the following is not a macroeconomic aggregate?

Scientific attempts to describe economic relationships are :

The method consistsin deriving conclusionsfrom general truths, takesfew general principles and applies them draw conclusions.

is a term referring to an intellectual controversy over epistemology, research methodology between Carl Menger, and Gustav von Schmoller.

Inductive method which also called empirical method was adopted by the:

Decisions made in households, firms, and government are the focus of:

Knowledge used to combine resources productively is called:

Economic efficiency for the entire economy requires that :

Theories are:

Division of Labour is limited by the extent of:

Milton Friedman restated the :

If the value of a variable varies as a consequence of the variation in the value of some other variable, it is called:

Which of the following concepts are most closely associated with J.M. Keynes?

Which of the following is an example of economic overhead?