Q.401. Insider trading is related to
(a) Trade sector
(b) Share market
(c) Credit market
(d) Horse racing
Ans: (B)
Notes: Insider trading is the trading of a public company’s stock or other securities by individuals with access to non-public information about the company. It is related to share markets. Insider trading is an unfair practice, wherein the other stock holders are at a great disadvantage due to lack of important insider nonpublic information.
Q.402. An indifference curve measures ______________ level of satisfaction derived from different combinations of commodity X and Y.
(c) same
(b) higher
(c) lower
(d) minimum
Ans: (A)
Notes: An indifference curve may be defined as the locus of points, each representing a different combination of two substitute goods, which yield the same utility or level of satisfaction to the consumer. Therefore, he is indifferent between any two combinations of goods when it comes to making a choice between them. So if, for example, a consumer makes five combinations a, b, c, d and e of two substitute commodities, X and Y, all these combinations yield the same level of satisfaction indicated by U.
Q.403. A motion that seeks to reduce the amount of demand presented by government to Re. 1/is known as
(a) Disapproval of policy Cut
(b) Token cut
(c) Economy cut
(d) Vote on account
Ans: (A)
Notes: Disapproval of Policy Cut seeks to reduce the amount of the demand be reduced to Re.1/-’ representing disapproval of the policy underlying the demand. A member giving notice of such a motion shall indicate in precise terms the particulars of the policy which he proposes to discuss. The discussion shall be confined to the specific point or points mentioned in the notice and it shall be open to members to advocate an alternative policy.
Q.404. What is included in the Tetiary sector ?
(a) Banking
(b) Manufacturing
(c) Forestry
(d) Mining
Ans: (A)
Notes: The tertiary industry is the segment of the economy that provides services to its consumers. It includes a wide range of activities that service based and give non-tangible value to customers such as provision of trading, insurance, banking, etc. The other sectors are the secondary sector (manufacturing), and the primary sector (agriculture and allied activities).
Q.405. According to Malthusian theory of population
(a) Population increases in geometric ratio, food supply increases in arithmetic ratio
(b) Population increases in arithmetic ratio, food supply increases in geometric ratio
(c) Population increases in a harmonic mean, food supply increases in geometric ratio
(d) Population increases in a harmonic ratio, food supply increases in a arithmetic ratio
Ans: (A)
Notes: In his 1798 work, An Essay on the Principle of Population, Malthus examined the relationship between population growth and resources and developed the Malthusian theory of population growth. He proposed that human populations grow exponentially (i.e., doubling with each cycle) while food production grows at an arithmetic rate (i.e. by the repeated addition of a uniform increment in each uniform interval of time).
Q.406. The innovation theory of profit was proposed by
(a) Marshall
(b) Clark
(c) Schumpeter
(d) Joan Robbinson
Ans: (C)
Notes: The Innovation Theory of Profit was proposed by Joseph. A. Schumpeter, who believed that an entrepreneur can earn economic profits by introducing successful innovations. In other words, innovation theory of profit posits that the main function of an entrepreneur is to introduce innovations and the profit in the form of reward is given for his performance.
Q.407. An economy in which there are no flows of labour, goods or money to and from other nations is a/an
(a) slow economy
(b) mixed economy
(c) closed economy
(d) open economy
Ans: (C)
Notes: An economy that does not interact with the economy of any other country is known as closed economy. A closed economy is self-sufficient, meaning no imports are brought in and no exports are sent out. It is the opposite of an open economy, in which a country conducts trade with outside regions.
Q.408. Elasticity of demand is the degree of responsiveness of demand of a commodity to a
(a) change in consumers’ wealth
(b) change in the price of substitutes
(c) change in consumers’ tastes
(d) change in its price
Ans: (D)
Notes: The elasticity of demand, also known as price elasticity of demand, is the degree of responsiveness of demand to change in price. Its measure depends upon comparing the percentage change in the price with the resultant percentage change in the quantity demanded. Thus, elasticity of demand is the ratio of percentage change in amount demanded to a percentage change in price.
Q.409. The price of a commodity is the same as
(a) Average revenue
(b) Total cost
(c) Average cost
(d) Total revenue
Ans: (A)
Notes: Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold. Thus, Average Revenue (AR) = Total Revenue (TR)/Quantity sold (Q)
410. Which one of the following is not a feature of monopoly ?
(a) Single seller of the product
(b) Heavy selling costs
(c) Barriers to entry of new firms
(d) Price discriminations
Ans: (B)
Notes: Heavy selling cost is one of the defining features of an oligopoly. Firms resort to heavy selling cost to attract customers. Under this market form, the firms have to compete to promote their sale by largely homogenous products, differentiated mainly by heavy advertising and promotional expenditure that ultimately adds to the total selling cost.