| Board | CBSE |
| Textbook | NCERT |
| Class | Class 12 |
| Subject | Economics |
| Chapter | CUET Economics Chapter-Introduction to Economics |
| Chapter Name | Introduction to Economics |
| Category | CUET (Common University Entrance Test) UG |
Important MCQ Questions on CUET Economics Chapter-Introduction to Economics with Detailed explanation
HT having an expert teacher of Economics prepared Important MCQ Questions on CUET Economics Chapter-Introduction to Economics with Detailed explanations. All the Chapters in the syllabus of CUET Economics are covered with coverage of the entire syllabus. This page is prepared for Chapter-Introduction to Economics and covers all important topics of the competitive exam CUET for domain subject test. Check out the chapter-wise CUET Economics MCQ questions.
MCQ Questions for CUET Economics Chapter-Introduction to Economics Set-1
Macroeconomic Economics - MCQ on Introduction
Class XII
Q.1. Because of scarcity:
a. people must make choices.
b. the India has to choose between eliminating poverty and exploring space.
c. society has limited resources and, therefore, cannot meet all its needs and wants.
d. all of the above.
Answer:
(a)
explaination :- Scarcity of resources leads to the problem of decision making or problem of choice and hence all the human desires cannot be fully satisfied.
Q.2. Because we can be at only one place at a time we have to make choices between activities that we would like to participate in. For example, if we decide to spend the weekend on the ski slopes with friends we can’t spend the weekend working. This is an example of:
a. Scarcity
b. Opportunity cost
c. Limited resources
d. All of the Above
Answer:
(c)
Explaination :- Opportunity cost is defined as the next best alternative activity sacrificed in order to carry out a given activity.
Q.3. For an economist, the cost of something:
a. Is always equal to the amount of money you paid for it.
b. Is always the same for everybody who wants it.
c. Always includes the sum of all the opportunities you lost when you chose to get this thing.
d. Always includes the value of the best opportunity you gave up to get this thing.
Answer:
(d)
Explaination :- According to economics, cost of any commodity also includes the cost of the next best alternative opportunity sacrificed.
Q.4 When a production possibilities schedule is written (or a production possibilities curve is drawn) four assumptions are made. Which of the following is one of those assumptions?
a. More than two products are produced
b. The state of technology changes
c. The economy has both full employment and full production
d. The quantities of all resources available to the economy are variable, not fixed
Answer:
(c)
Explaination :- Production possibility schedule or production possibility curve is based on the assumption of two commodities, given quantity of resources, constant technology and fuller and efficient utilisation of resources
Q.5. Which central problem is not solved by PPC
a. What to produce
b. How much to produce
c. For whom to produce
d. Economic growth
Answer:
(d)
Explaination :- PPC cannot represent the problem of for whom to produce as it is based on prodution possibilities and does not represents distribution of goods and services.
Q.6. A convex to the origin PPC implies :-
a. Increasing marginal cost
b. Increasing marginal opportunity cost
c. Decreasing marginal opportunity cost
d. Constant marginal opportunity cost
Answer:
(c)
Explaination :- If the marginal opportunity cost decreases along the PPC then the PPC will be convex to origin.
Q.7. Economic meaning of increasing marginal rate of transformation is that to produce the more of good X, how many units of good Y have to be sacrificed :
a. Increasing units
b. Constant units
c. Decreasing units
d. Zero units
Answer:
(a)
Explaination :- Increasing marginal rate of transformation represents that in order to increase the production of commodity X more and more units of commodity Y have to sacrificed
Q.8. If there is a natural calamity , what will happen to PPC
a. No change
b. Shift rightwards
c. Shift leftwards
d. It will become a straight line
Answer:
(c)
Explaination :- A natural calamity will lead to destruction of resources and hence the PPC will shift towards left.
Q.9. An economy is operating on its production possibilities frontier for 1996. A year later it is operating at a point beyond (outside) 1996's production possibilities frontier, but inside (within) 1997's production possibilities frontier. From this information, it can be concluded that between 1996 and 1997
(a) Both economic growth and an increase in unemployment occurred.
(b) Both economic growth and a reduction in unemployment occurred.
(c) Only a reduction in unemployment occurred.
(d) Only economic growth occurred.
Answer:
(a)
Explaination :- Since the economy is operatin beyond 1996 PPC , it represents economic growth but since it is operating inside the PPC for 1997, it also represents increase in unemployment in the economy.
Q.10. Which one of the following, if any, will not shift the economy's entire production possibilities curve (PPC) outward?
(a) An increase in the size of the nation's labor force.
(b) An improvement in technology.
(c) The printing of new money by the government which causes the price of all goods to increase.
(d) An increase in the nation's capital stock of machinery and equipment.
Answer:
(c)
Explaination :- An increase in price of all goods will not affect the productive capacity of the nation and hence the PPC will not shift outwards.
Q.11. An economy is operating at a point on its production possibilities frontier (PPF). If an increase in unemployment were then to occur, this would be shown as
(a) A shift outward in the entire production possibilities frontier.
(b) A movement along the given production possibilities frontier.
(c) A movement to a point inside (within) the given production possibilities frontier (closer to the origin).
(d) A shift inward in the entire production possibilities frontier.
Answer:
(c)
Explaination :- Increase in Unemployment will lead to under utilization of resources in the economy which will be represented by a point inside the PPC
Q.12. The production possibilities frontier illustrates which basic economic principle?
(a) Market failure
(b) Adam Smith’s “invisible hand”
(c) Opportunity cost
(d) Government economic planning
Answer:
(c)
Explaination :- PPC is based on the concept of opportunity cost as it represents the quantity of one commodity sacrificed in order to increase the production of another commodity.
Q.13. Efficiency in production is related to
(a) Micro economics
(b) Macro economics
(c) Development economics
(d) Welfare economics
Answer:
(d)
Explaination :- The main objective of welfare economics is to study efficiency and fuller utilisation of resources.
Q.14. What is one of the future consequences of an increase in the current level of consumption in India
(a) Greater economic growth in the future
(b) Slower economic growth in the future
(c) Greater capital accumulation in the future
(d) No change in our economic growth rate
Answer:
(b)
Explaination :- Increase in current level of consumption in India will lead to a lesser capital formation and slower economic growth in the future.
Macroeconomic Economics - MCQ on Introduction
MCQ Questions for CUET Economics Chapter-Introduction to Economics Set-2
Q.01. Economic growth can be shown by
a) an inward shift of the production possibility curve.
b) a movement down the production possibility curve.
c) an outward shift of the production possibility curve.
d) a movement up the production possibility curve.
Answer:
c
Explanation: Economic growth can be shown by an outward shift of the production possibility curve; this shows that more products can be produced.
Q.02. If, an economy is productively efficient
a) everyone is wealthy.
b) resources are unemployed.
c) more of one product can only be produced if less of another product is produced.
d) the income distribution is equal.
Answer:
d
Explanation: If, an economy is productively efficient the distribution of income is equal.
Q.03. If, an economy moves from producing 10 units of X and 4 units of Y to producing 7 Xs and 5Ys, then the opportunity cost of the 5th Y, is
a) 7Xs.
b) 10Xs.
c) 3Xs.
d) 1X.
Answer:
c
Explanation: If, an economy moves from producing 10 units of X and 4 units of Y to producing 7 Xs and 5Ys, then the opportunity cost of the 5th Y, is 3Xs.
Q.04. An economy may operate outside the Production Possibility Curve, if it is
a) not utilizing its resources fully.
b) being productively efficient.
c) a mixed economy.
d) trading with other economies.
Answer:
d
Explanation: An economy may operate outside the Production Possibility Curve, if it is trading with other economies.
Q.05. As resources are shifted from one industry to another, this can be shown by
a) an inward shift of the production possibility curve.
b) a movement along the production possibility curve.
c) an outward shift of the production possibility curve.
d) a outward shift in the demand curve for the products.
Answer:
b
Explanation: As resources are shifted from one industry to another this can be shown by a movement along the production possibility Curve.
Q.06. In a free market the combination of products produced is determined by
a) the forces of supply and demand.
b) the government.
c) the law.
d) the public sector.
Answer:
a
Explanation: In a free market the combination of products produced is determined by the forces of supply and demand.
Q.07. The resources in the economy do not include
a) demand.
b) land.
c) labour.
d) capital.
Answer:
a
Explanation: Demand is not a resource.
Q.08. The resources in an economy are
a) constantly increasing.
b) fixed at any moment.
c) constantly decreasing.
d) easily transferable between industries.
Answer:
b
Explanation: The resources in an economy are fixed at any moment but can change with time.
Q.09. Any combination of products inside the production possibility curve is
a) inefficient.
b) X inefficient.
c) consumer inefficient.
d) productively inefficient.
Answer:
d
Explanation: Any combination of products inside the production possibility curve is productively inefficient because more could be produced.
Q.10. An outward shift of the production possibility curve may be caused by
a) increased demand.
b) more government spending.
c) better training of employees.
d) productive inefficiency.
Answer:
c
Explanation: An outward shift of the production possibility curve may be due to better training of employees because it will increase productivity.