Economics Intro: 28 MCQs with answers

Management of household resources

The Greek word 'Oikonomos' combines 'oikos' (household) and 'nomos' (management), so economics literally means management of household resources.

The nature and causes of the wealth of nations

Adam Smith, in 1776, defined economics as the study of the nature and causes of the wealth of nations, focusing on wealth creation.

Teaching at a school for a salary

Economic activities are performed to earn income, such as teaching for a salary. The others are non-economic activities done without income motive.

Individual economic units like consumers and firms

Microeconomics focuses on individual units such as consumers, firms, price determination, and demand-supply analysis.

The value of the data

In a bar diagram, bars have equal width and spacing, but the height corresponds to the numerical value being represented.

Wealth, purpose, benefit

In 'Arthashastra', 'Artha' means wealth, purpose, or benefit, and 'Shastra' means science, so economics is the science of wealth and human welfare.

Donating blood

Donating blood is done out of charity and without any intention of earning money, making it a non-economic activity.

True

Economics is a social science as it examines how humans behave in economic activities, using scientific methods to study 'what is'.

False

In bar diagrams, bars always have equal width; the height represents the value, and bars are equally spaced.

The study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Economics is the social science that studies how individuals, businesses, governments, and societies allocate scarce resources to satisfy unlimited wants, as highlighted in the content.

Alfred Marshall

Alfred Marshall, a prominent neoclassical economist, defined economics as the study of mankind in the ordinary business of life, focusing on human welfare.

A mother cooking dinner for her family.

Non-economic activities are performed out of love, affection, or social obligation without any monetary compensation. Cooking for family is a non-economic activity, while the others involve monetary exchange.

The study of individual economic units like households and firms.

Microeconomics focuses on the behavior of individual economic agents such as consumers, households, and firms, and their decision-making processes.

Economics deals with unlimited wants and scarce resources that have alternative uses.

Lionel Robbins defined economics as the science of scarcity and choice, emphasizing the relationship between unlimited wants and scarce resources with alternative uses.

Household management

The term 'Economics' originates from the Greek word 'Oikonomos', which literally means 'household management'.

A shopkeeper selling groceries to customers.

Economic activities involve the production, distribution, and consumption of goods and services for monetary gain. Selling groceries is a clear economic activity, while the others are non-economic.

Price determination of a single product

Macroeconomics studies aggregate phenomena like national income, inflation, and unemployment. Price determination of a single product is a microeconomic topic.

Central Statistical Office (CSO)

The Central Statistical Office (CSO) is an official government body that provides reliable and authentic statistical data for economic analysis in India.

The frequency or value of the variable

In a bar diagram, the height (or length) of each bar is proportional to the frequency or value of the variable it represents.

Lionel Robbins' scarcity definition

Lionel Robbins (1931) defined economics as the science of scarcity, focusing on the problem of choice due to unlimited wants and limited resources.

Pie diagram

A pie diagram is a circular graph where each sector represents a percentage share of the whole, making it ideal for showing proportions.

Rainfall

The independent variable (rainfall) is plotted on the X-axis, while the dependent variable (crop production) is plotted on the Y-axis.

Central Statistics Office (CSO)

The Central Statistics Office (CSO) is an authentic government source for statistical data, unlike informal sources.

Alfred Marshall

Alfred Marshall (1890) gave the welfare definition, describing economics as the study of the ordinary business of life, focusing on human welfare.

Price determination of a single product

Price determination of a single product is a microeconomic topic. Macroeconomics studies aggregates like national income, inflation, and unemployment.

Identifying independent and dependent variables correctly

Correct selection of variables means distinguishing between independent (X-axis) and dependent (Y-axis) variables to ensure accurate analysis.

Testing economic theories with real-life data

Statistics allows economists to test theories using real data, helping to confirm or refute cause-and-effect relationships between variables.

As price decreases, demand increases

The table shows that as price falls from ₹20 to ₹5, demand rises from 20 to 80 units, illustrating the inverse relationship of the Law of Demand.