Question with Answer UGC NET Economics
1. Which is called Gossen’s second Law ?
a. Law of equi-marginal utility
b. Law of Diminishing marginal utility
c. Revealed Preference Theory
d. Indifference Curav approach
Ans. a.
2. Which of the condition support long run equilibrium in monopolistic competition ?
a. MR = MC, AR = AC
b. P = MC, AR = AC
c. MR = MC = AR = AC
d. AR = MC = AC
Ans. b.
3. Who explained importance of time element in price determination, for the first time ?
a. Chamberlin
b. Stigler
c. Mrs. Joan Robinson
d. Marshall
Ans. d.
4. Law of diminishing returns begins to operate when :
a. Total product begins to rise
b. Total product begins to fall
c. Marginal Product begins to rise
d. Marginal product begins to fall
Ans. d.
5. Consider the following statements regarding Edgeworth Duopoly model :
I. It takes as given output decision of rival.
II. It takes as given price decision of rival
III. It is an explanation of price rigidity of thease , the correct answer is :
a. Only Statement I is true
b. Both I & II are true
c. Both II & III are true
d. Only III is true
Ans. b.
6. Public goods are charactertised by :
1. Collective consumption
2. Divisibility
3. Non – exclusion
4. Rival consumption
Select the correct answer from the code given below :
a. 1 & 2 are correct
b. 1 & 3 are correct
c. 1 & 4 are correct
d. 2 & 4 are correct
Ans. b.
7. Among the following what causes market failure ?
1. Externality
2. Asymmetry of information
3. Perfact competition
Choose the correct answer from the code given below :
Codes :
a. 1,2 & 3 are correct
b. Only 1 is correct
c. 1 & 2 are correct
d. 2 & 3 are correct
Ans. c.
8. Assuming wages – price flexibility , the classical economists asserted that a decline in money wages And price would lead to :
a. Unemployment
b. Deflation
c. High level of employment and output
d. Unemployment and decline in output
Ans. c.
9. The classical theory of interest postulates that both savings and investments are a function of :
a. the level of National income
b. the level of employment and output
c. monetary and fiscal policy
d. rate of interest
Ans. d.
10. The relative income hypothesis of Duesenberry suiggests that as income increase , consumption function curve shifts above and therefore :
a. Average propensity to consume rises
b. Average propensity to consume falls
c. Average propensity to consume remains constant
d. Average propensity to consume is equal to 1
Ans. d.
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