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Choose the Best Answer

Economics
Std: XII
I. Choose the best answer: (60 X 1 = 60) Time 20 Min.

1. The author of wealth definition is:

a) Alfred Marshall b) Lionel Robbins c) Adam Smith d) Samuelson
2. Economics is a
a) positive science b) normative science c) Both d) none
3. In Economics, we make use of
a) deductive method b) inductive method c) both d) none
4. The basic economic problems are common to
a) Capitalism b) Socialism c) Mixed economy d) All the above
5. In a socialist economy, all decisions regarding production and distribution are taken by
a) Market forces b) Central planning authority c) Customs and traditions
6. The author of scarcity definition is:
a) Adam Smith b) Samuelson c) Alfred Marshall d) Lionel Robbins
7. The concept of Net Economic Welfare has been given by
a) Samuelson b) Marshall c) Adam Smith d) Lionel Robbins
8. Redtapism and corruption lead to
a) Inefficiency of production b) Inequality of income and wealth c) Absence of production
d) Efficient use of resources.
9. Necessaries, comforts and luxuries are
a) Classification of goods and services b) Classification of wants
c) Classification of utility d) None of the above
10. The Indifference curve approach was introduced by
a) Alfred Marshall b) Lionel Robbins c) J.R. Hicks and R.G.D. Allen d) Adam Smith
11. Traditional economy is a
a) Subsistence economy b) Market economy c) Command economy d) monetary economy
12. The basic force that drives the capitalist economy is
a) Planning b) Technology c) Government d) Profit-Motive
13. Average fixed cost is obtained by dividing a) TC/Q b) TFC/Q c) TVC/Q D) None
14. Marginal revenue is the latest addition made to the
a) average revenue b) Total production c) Total revenue d) none
15. Utility is a a) Social Concept b) Subjective / Psychological concept
b) Political Concept d) Scientific concept
16. Economic cost includes explicit cost and
a) implicit cost b) social cost c) fixed cost d) money cost
17. Social costs are those costs a) not borne by the firms b) incurred by the society
c) health hazards d) all of these
18. Single commodity consumption mode is
a) Production possibility curve b) Law of Equi-marginal utility
c) Law of supply d) Law of Diminishing Marginal utility
19. Above the equilibrium price a) S < D b) S > D c) S = D d) none
20. Factors determining supply are:

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a) Production technology b) Prices of factors of production c) Taxes and subsidies d) All the above
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21. Law of demand establishes a) inverse relationship between price and quantity
a) Positive relationship between price and quantity c) Both d) None
22. Increase in demand is shown by
a) Movement along the same demand curve b) Shifts of the demand curve
c) The highest point on the demand curve d) Lowest point of the demand curve
23. At the point of equilibrium
a) Only one price prevails b) Quantity demand = Quantity supplied
c) The demand curve intersects the supply curve d) All the above
24. The degree of response of demand to change in price is
a) Income elasticity of demand b) Cross-elasticity of demand
c) Price elasticity of demand d) All the above
25. Under perfect competition, the demand curve is
a) Upward sloping b) horizontal c) downward sloping d) vertical
26. Most important form of selling cost is
a) Advertisement b) Sales c) Homogeneous product d) None
27. Consumer surplus is a) Potential price Actual price b) MVn=TVn-1
c) Demand = Supply d) None
28. Changes in quantity demand occur
a) Only when price changes b) Due to change of taste c) both d) None
29. Demand for a commodity depends on
b) Price of that commodity b) Price of related goods
c) Income d) All the above.
30. The time element in price analysis was introduced by
a) J.R. Hicks b) J. M. Keynes c) Alfred Marshall d) J.S. Mill
31. The initial supply price of land is
a) Zero b) Greater than one c) Less than one d) Equal to one.
32. Labour cannot be separated from
a) Capital b) labourer c) Profit d) organization
33. In the long period a) All factors change b) Only variable factor changes
c) Only fixed factor change d)Variable and fixed factors remain constant.
34. Production refers to a) destruction of utility b) creation of utilities
c) exchange value d) None
35. Reward paid to capital is a) interest b) profit c) wages d) rent
36. A successful entrepreneur is one who is ready to accept
a) Innovations b) Risks c) deciding the location of the production unit d) none
37. A firm can achieve equilibrium when its
a) MC =MR b) MC = AC c) MR = AR d) MR = AC
38. The firm and industry are one and the same under
a) perfect competition b) duopoly c) oligopoly d) monopoly
39. Rent is the price paid for the use of
a) Capital b) Organisation c) Labour d) Land
40. Bank rate is raised during
a) deflation b) inflation c) stable prices d) unemployment

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41. Profits are the reward for
a) Land b) Capital c) Labour d) Organisation
42. Real cost is a) pain and sacrifice b) subjective concept c) efforts and forgoing leisure
d) all the above
43. Perfect competition is a market situation where we have a single seller
a) a single seller b) two sellers c) large number of sellers d) few sellers
44. The demand for labour is
a) effective demand b) direct demand c) derived demand d) elastic demand
45. The author of the concept of quasi rent is
a) Adam Smith b) Marshall c) Ricardo d) Samuelson
46. The Classical Theory assumed the existence of
a) Unemployment b) Disguised unemployment c) Full employment d) Under-employment
47. Public finance is concerned with the income and expenditure of
a) Private sector b) Agricultural sector c) Public authorities d) Industrial sector
48. The author of liquidity preference theory is
a) J.M. Keynes b) Marshall c) Samuelson d) Knight
49. The macro economic thinking was revolutionized by
a) David Ricardo b) J.M. Keynes c) Adam Smith d) Malthus
50. Tax revenue deals with the
a) Fees b) Kinds of taxes c) Revenue d) Non tax revenue
51. The federal form of government consists of
a) central, state and local government b) central and state government
c) state and local government d) above all
52. The compulsory charge levied by the government is
a) Licence b) Gifts and grants c) Loan d) Tax
53. The central problem in Macro Economics is
a) Income and employment b) Price and Output c) Interest and Money d) None
54. During inflation
a) businessmen gain b) wage earners gain c) salaried people gain d) Rentiers gain
55. A situation market by rising prices and stagnation in demand is known as
a) cost-push inflation b) demand-pull inflation c) stagflation d) wage-push inflation
56. Monetary policy is controlled by
a) central government b) state government c) central bank d) private sector
57. To explain the simple theory of income determination, Keynes used
a) Consumption and Investment b) Aggregate demand and aggregate supply
c) Production and Expenditure d) All the above
58. The marginal propensity to consume
a) S/Y b) C/y. P/Q c) P/Q d) C/Y
59. Currency with the public is known as
a) M1 b) M2 c) M3 d) M4
60. In ZBB every year is considered as a
a) base year b) financial year c) new year d) academic year.

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Economics
Std: XII
Key for objectives:
I. Choose:
1. Adam smith 31. zero
2. both 32. Labourer
3. both 33. all factors change
4. all the above 34. creation of utilities
5. Central Planning Authority 35. Interest
6. Lionel Robbins 36. Risks
7. Samuelson 37. MC = MR
8. Inefficiency of production 38. monopoly
9. classification of wants 39. Land
10. J.R. Hicks and R.G.D. Allen 40. Inflation
11. Subsistence Economy 41. Organisation
12. Profit motive 42. all of these
13. TFC/Q 43. Large number of sellers
14. Total Revenue 44. derived demand
15. Subjective/Psychological concept 45. Marshall
16. Implicit cost 46. Full Employment
17. all of these 47. Public Authorities
18. Law of Diminishing marginal utility 48. J.M. Keynes
19. S>D 49. J.M. Keynes
20. All the above 50. Kinds of Taxes
21. Inverse relationship between price 51. Central, State and Local Government
and quantity 52. Tax
22. Shift of Demand curve 53. Income and Employment
23. all the above 54. Businessman gain
24. Price elasticity of demand 55. Stagflation
25. horizontal 56. Central Bank
26. Advertisement 57. Aggregate demand & Aggregate
27. Potential price Actual price supply
28. Only when price change 58. c/y
29. all the above 59. M1
30. Alfred Marshall 60. New Year

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II. Fill up:

1. Small 31. Cardinal utility
2. Social 32. Alfred Marshall
3. Ocean 33. Elasticity of Supply
4. Price Mechanism 34. Price
5. Transformation curve/Production 35. Short period and Long Period
possibility frontier 36. Capital
6. maximum 37. Production function
7. Convex 38. Economic cost
8. Law of diminishing marginal utility 39. Short run
9. Market demand schedule 40. Legal monopoly
10. Sub system 41. mutual co-operation
11. equilibrium 42. General
12. Primary 43. Nominal wages
13. Adam Smith 44. Marginal propensity to save/ MPC
14. Total fixed cost + Total Variable 45. Multiplier
cost (TFC + TVC) 46. Barter
15. U shaped 47. falling
16. Hemogeneous product 48. Shifting of the Incidence
17. Super normal profit 49. Degressive
18. Perfect 50. Public and Private sector
19. Opportunity cost 51. Consumption
20. Fall in investment 52. Veblen effect
21. Liquidity preference 53. Vertical
22. Irving fishes 54. Division of Labour
23. Hyper-Inflation 55. Nominal Cost
24. Quid-pro-Quo 56. Price takers
25. Canons of Taxation 57. Entrepreneur
26. Utilities 58. Income and Consumption
27. Barter 59. Inflation
28. Customs and Traditions 60. Public revenue
29. Social or Collective Welfare
30. Competitive and Complementary

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III. Match:

1. Time Element 31. Cost per unit

2. Stock 32. TFC + TVC
3. Laissez faire economy 33. TR TC
4. Socialism 34. Diamond
5. Supply, demand and price 35. Planning curve
6. Flow 36. TCn TCn-1
7. Maximum benefit 37. Gold & Silver
8. Next alternative foregone 38. Perfect Competition
9. Marshall 39. Coco-cola
10. Tinbergen an Frisch 40. E.H Chamberlin
11. Advertisement 41. Neo-Classical Theory
12. Ordinal Ranking 42. Clark
13. Diamond, Jewels 43. Vertical Change /
14. Arc Horizontal Change
15. Inelastic demand 44. Liquidity preference
16. X and Y are not related 45. Hawley
17. Marshall 46. C + I + G + (X M)
18. Hicks and Dalton 47. Walker
19. Veblen effect 48. C + S
20. Substitutes Price and demand 49. Marshall
21. More elastic 50. 1 /1-MPC
22. Demand & Supply 51. Low rate of interest
23. Cobb Douglas 52. Adam Smith
24. Pair of Price & Quantity 53. Best Tax System
25. D > S 54. Rebate and Subsidies
26. Annual Sock Clearance 55. Moral suasion
27. Hawley 56. Creeping inflation
28. Marshall 57. Purchasing power of Money one
29. Schumpeter another
30. Adam Smith 58. Tax rate decreases
59. Revenue and expenditure are equal
60. Bank rate

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IV. One or Two words:

1. Political Economy 31. ep = Lower segment of demand curve/

2. Statistics, Mathematics & Economy Upper segment of demand curve
3. Profit motive 32. The degree of responsiveness of
4. Depression demand to change in Income.
5. It is a group of indifference curves 33. Income, taste, Price of Substitutes
for two commodities 34. Yes
6. Price ration line 35. MRTS xy = Px / Py
7. Other things being equal or / 36. Q = bLa Cb
Ceteris paribus condition 37. MR also remain constant / Coincide
8. During boom demand Increases with AR
During depression demand Decreases 38. Addition made to the total revenue
9. Alfred Marshall 39. State
10. Heavy Machine or Building 40. Legislation or / Taxation
11. Entrepreneur 41. Walker
12. From with in firm 42. Keynesian cross
13. It is the group of Short run cost 43. Central Bank / RBI
curve or/ Planning curve 44. During inflation
14. TC/Q or Total cost / Quantity 45. K = 1/1-MPC
15. Product Differentiation 46. Tax is a Compulsory contribution
16. 1969 47. Balanced and Unbalanced Budget
17. Yes 48. Deductive method
18. Bohm Bawerk 49. Yes
19. Great Depression 50. Locus of difference combinations
20. Supply creates in own demand of two commodities.
21. No 51. Yes
22. Germany 52. State of rest or / balance
23. VAT Value Added Tax 53. Iso Product curve
24. Uniform Tax rate 54. No-profit No-loss point
25. Air, Sunshine, Water 55. Group of Firms
26. Nominal Income 56. Innovation Theory of profit
27. China and Cuba 57. J.M. Keynes
28. Yes 58. Suppressed Inflation
29. Want satisfying power 59. Borrowing from the public
30. Gossens II Law 60. No.

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Fill Ups:-
Economics
Std: XII
I. Fill in the blanks: (60 X 1 = 60) Time 20 Min.
1. The term micro means ________.
2. Economics is a ________ Science.
3. An example of cosmopolitan wealth is ______.
4. Most of the economic activities of capitalism are centered on _____.
5. Production possibility curve is also known as _______.
6. Marginal utility falls to zero, when the total utility is ______.
7. An indifference curves is _______ to the origin.
8. The demand curve slopes downwards due to_________.
9. Adding up of individual consumers schedule is ________.
10. Agriculture, industry, growth and distribution are the ____ of the economy.
11. At _______ price, there is no tendency to change the price or quantity.
12. Land and labour are called ______ factors.
13. An enquiry into the nature and causes of wealth of nations was written by ____.
14. Total cost is the sum _______.
15. The marginal cost curves is ______ shaped.
16. Under Perfect competition, the firms are producing _____ product.
17. When the Average revenue of f the firm is greater than its average cost, the firm is
earning _____.
18. Marginal productivity theory is based on the assumption of ____ competition.
19. Transfer earnings refer to _______ cost.
20. The worldwide depression of 1930s was also caused by _______.
21. ______ refers to the cash holdings of the people.
22. The equation of exchange (MV=PT) was given by______.
23. Galloping inflation is known as _________.
24. The absence of direct and proportional benefit is _______.
25. _______ are considered as fundamental principles of taxation.
26. Strictly speaking production refers to the creation of _______.
27. Exchange of good for goods is known as ____.
28. In a traditional economy, basic problems are solved by ____ and ______.
29. The prime motive of socialist economy is ________
30. Wants may be both ______ and ______.

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31. Marshillian utility approach is _______ analysis.
32. The concept of elasticity of demand was introduced by _________.

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33. The rate of change of supply to a change is price is________.

34. _____ is the major determinant of supply.
35. Modern economists divide time periods into ______and ______.
36. ______ is man-made physical goods used to produce other goods.
37. The functional relationship between inputs and output is known as ____.
38. Economic profit is the difference between total revenue and _________.
39. The distinction between the fixed and variable factors is possible only in _____.
40. Monopoly power achieved through patent right is called _____.
41. Firms realize the importance of ________under oligopoly.
42. Marginal productivity theory is the ______ theory of distribution.
43. Money wages are also known as _______ wages.
44. ______ is the ratio of charge in saving to a change in income.
45. The magnified effect of initial investment on income is called_____ effect
46. The direct exchange of goods for goods is known as _______.
47. Deflation is a period marked by ______ prices.
48. The classification of direct and indirect taxes is based on criterion of _____ tax.
49. Tax is a blend of _________ and proportional tax.
50. Under mixed economy, the economic control is exercised by _____ and ____ sectors.
51. _____means using up of goods and services.
52. Goods that are demanded for their social prestige come under ______ effect.
53. The supply curve in the market period is a _______line.
54. ______ is limited by the extent of market.
55. Money cost is also called ______.
56. The perfect competitive firms are _______.
57. Organization is done by the _______.
58. The term consumption function explains the relationship between ____ and _____.
59. Monetary policy is usually effective in controlling________.
60. _______ means different sources of government income.
_____________________________________

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Match:-
Economics
Std: XII
I. Match the following: (60 X 1 = 60) Time 20 Min.

Dynamic approach - Marshall

Wealth - Time Element
Private property - supply, demand and price
Bureaucratic expansion - maximum benefit
Market forces - Laissez faire economy
Income - Tinbergen and Frisch
Minimum cost - next alternative forgone
Opportunity cost - socialism
Principles of Economics - Stock
First Noble prize - Flow

Wants - Marshall
Indifference curve - Advertisements
Luxuries - Ordinal Ranking
Segment between two points - X and Y are not related
Ed>1 - Veblen effect
Cross-elasticity is zero - Arc
Principles of Economics - Hicks and Dalton
Maximum social advantage - Diamond, Jewels
Positive relationship of - substitutes price and demand
Tea and coffee - inelastic demand

Long period supply curve - D>S

Short period price - Demand and supply
Production function - Schumpeter
Equilibrium - Annual stock clearance
Excess demand - More elastic
Price discount - Pair of price and quantity
Bundle of risks - Marshall
Exertion of body or mind - Adam Smith
Entrepreneur, in innovator - Cobb Douglas
Division of labour - Hawley

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Average cost - Planning curve
TC - TCn-TCn-1
Profit - TFC + TVC
South Africa - Gold and Silver
The long run average cost curve - TR - TC
MCn - cost per unit
Global market - E.H. Chamberlin
Consumer sovereignty - Coco Cola
Technical monopoly - perfect competition
Monopolistic competition - diamond

Loanable funds Theory - Hawley

Dynamic Theory of Profit - Neo-classical theory
Slope - C+S
Keynes - 1 / 1-MPC
Risk-bearing theory of Profit - Clark
Aggregate Demand - Vertical Change / Horizontal Change
Residual claimant theory - Marshall
Y - Liquidity Preference
Waiting theory of Interest - Walker
K - C + I + G + (X-M)

Cheap money policy - Moral Suasion

Canons of Taxation - Rebate and subsidies
Progressive tax - Adam Smith
Fiscal policy - Tax rate decreases
Selective credit control - Bank rate
Wages and prices push - Purchasing power of money one other
Value of money - Creeping inflation
Regressive tax - Revenue and expenditure are equal
Balanced budget - Best tax system
Quantitative credit control - Low rate of interest

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One or Two Words-

Economics
Std: XII
IV. Answer in One or Two word: (60 X 1 = 60) Time 20 Min.

1. What is the other name for Economics?

2. What are the subjects that econometrics make use of?
3. What is the basic force that drives a capitalist economy?
4. What is the result of over-production?
5. What is Indifference map?
6. What is the other name for budget line?
7. What is the basic assumption of economic theory?
8. How does the demand change during boom and depression?
9. Who has introduced the time element?
10. Give an example for fixed input?
11. Who is the changing agent of the society?
12. How do internal economies arise?
13. What is an envelope curve?
14. How will you calculate AC?
15. What is the essential feature of monopolistic competition?
16. In which year the MRTP Act was passed?
17. Even if all lands are equally fertile, can rent arise?
18. Who is the author of Agio theory of interest?
19. What crippled the free enterprise economies of US and UK?
20. State J.B. Says Law of Market.
21. Is wage cut remedy for depression?
22. Give the example of a country that experienced hyperinflation.
23. Give the expansion for VAT
24. What is the meaning of proportional tax?
25. Give one or two examples of free goods.
26. What is the other name for money income?
27. Name any two successful socialist economies.
28. Is there planning under mixed economy?
29. Define Utility?
30. What is the other name for the law of Equi-Marginal Utility?

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31.Give the formula for point method.
32.What is income elasticity of demand?
33.What are the determinants of shift in demand curve?
34.Is supply fixed in the market period?
35.Give the condition for producers equilibrium?
36.State the Cobb-Douglas production function?
37.When average revenue remains constant what will be M.R.?
38.What is Marginal Revenue?
39.Who undertakes the public utilities?
40.How does the government control monopoly?
41.Who is the author of the rent theory of profits?
42.Name the point of intersection of Aggregate Demand and Aggregate Supply?
43.Name the blank which controls money supply in a country.
44.When is dear money policy followed?
45.Give the formula for Multiplier.
46.What is Tax?
47.What are the kinds of budget?
48.What is the method that Ricardo made us of?
49.Is traditional economy a subsistence economy?
50.What is Indifference curve?
51.When the demand for labour is inelastic, can a trade union raise wages?
52.What is equilibrium in general?
53.What is other name for isoquant?
54.What is Break-even point?
55.What is an industry?
56.What is the name of Schumpeters theory of profits?
57.Who is the author of the General Theory of Employment, Interest and Money?
58.What is the name of inflation without a rise in price level?
59.What is public debt?
60. According to Ricardio. All lands gets rent?

Prepared by
M KARTHIK, M.Com., B.Ed.,
P.G Teacher
Govt Hr Sec School,
Thirumudivakkam, Chennai-44
Kancheepuram Dist.,

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