Economic Insights Quiz 1

Exchange of goods and services

• Market

• Bank

• Demand

• Supply

Answer explanation

A market is a place where the exchange of goods and services occurs. It facilitates transactions between buyers and sellers, making it the correct choice for this question.

Who are the Economic agents?

• Consumer

• Producer

• Both a and b

• None of the above

Answer explanation

Economic agents are individuals or entities that make economic decisions. Consumers purchase goods and services, while producers create them. Therefore, both consumers and producers are considered economic agents.

"Economics is the science which studies human behaviour as a relationship between ends and scarce means with alternative uses".

• Wealth Definition

• Welfare Definition

• Scarcity Definition

• Growth Definition

Answer explanation

The statement emphasizes the relationship between limited resources and human choices, which is the essence of scarcity. Thus, it aligns with the Scarcity Definition, highlighting how economics studies the allocation of scarce means.

"Economics is the science which studies human behaviour as a relationship between ends and scarce means with alternative uses". Explain the twin theme of Economics

• Demand and Supply

• Ends and Scarce

• Individual and Firm

• Alternative use of resources

Answer explanation

The twin theme of Economics revolves around 'Ends and Scarce'. It emphasizes how individuals and societies prioritize their limited resources (scarce means) to achieve various goals (ends), highlighting the fundamental economic problem.

What causes central problems of the economy?

• Scarcity and alternative use of resources

• Unlimited human wants

• Both a and b

• None of the above

Answer explanation

Central economic problems arise from scarcity of resources and the unlimited nature of human wants. Both factors create a need for choices, making 'Both a and b' the correct answer.

Which among the following is NOT a factor of production?

• Land

• Services

• Capital

• Labour

Answer explanation

Consumers play a crucial role in the economy by creating demand for goods and services. Their purchasing decisions drive production and influence market trends, making them essential for economic growth.

What is the main motive a Producer?

• More Demand

• Maximum Utility (Satisfaction)

• Profit Maximisation

• None of the Above

Answer explanation

The main motive of a consumer is to achieve Maximum Utility (Satisfaction). Consumers aim to maximize their satisfaction from the goods and services they purchase, rather than just increasing demand or consumption.

What to Produce?

How to Produce?

For whom to Produce?

These are the ....................... ?

• Decisions to be taken by the producer

• Central Problems of the Economy

• Market Failure

• None of the Above

Answer explanation

The questions 'What to Produce?', 'How to Produce?', and 'For whom to Produce?' are fundamental economic questions that address resource allocation, making them central problems of the economy.

For Whom to Produce? depends upon the ............

• Demand of the Consumer

• Income of the Consumer

• Supply of the product

• Price of the Product

Answer explanation

The question 'For Whom to Produce?' is primarily influenced by the 'Income of the Consumer'. Higher income levels enable consumers to purchase more goods, thus determining the target market for production.

Scarcity Definition is given by ...............

• Adam Smith

• J M Keynes

• Lionel Robinson

• Karl Marx

Answer explanation

Lionel Robbins defined scarcity as the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. This definition emphasizes the need for choices and trade-offs in economics.