The unsustainable levels of government deficits in the late 80’s can be attributed to:

high levels of government expenditures
insufficient revenues
poor returns on government investments
all of the above

Which of the following statements is correct?

The public sector was given a dominant position in the newly Independent India
The foreign trade policy post Independence allowed free trade of all goods and services
Monetary policy post Independence was the responsibility of SBI
None of the above

A firm encounters its “shutdown point” when:

average total cost equals price at the profit-maximizing level of output
average variable cost equals price at the profit-maximizing level of output
average fixed cost equals price at the profit-maximizing level of output
marginal cost equals price at the profit-maximizing level of output

Price-taking firms, i.e., firms that operate in a perfectly competitive market, are said to be “small” relative to the market. Which of the following best describes this smallness?

The individual firm must have fewer than 10 employees
The individual firm faces a downward-sloping demand curve
The individual firm has assets of less than Rs.20 lakh
The individual firm is unable to affect market price through its output decisions

In describing a given production technology, the short run is best described as lasting

up to six months from now
up to five years from now
as long as all inputs are fixed
as long as at least one input is fixed

In the production of wheat, all of the following are variable factors that are used by the farmer except:

the seed and fertilizer used when the crop is planted
the field that has been cleared of trees and in which the crop is planted
the tractor used by the farmer in planting and cultivating not only wheat but also corn and barley
the number of hours that the farmer spends cultivating the wheat fields

The consumer is in equilibrium when the following condition is satisfied:

\(\frac{MU_{x}}{MU_{y}} > \frac{P_{x}}{P_{y}}\)
\(\frac{MU_{x}}{MU_{y}}\) < \(\frac{P_{x}}{P_{y}}\)
\(\frac{MU_{x}}{MU_{y}} = \frac{P_{x}}{P_{y}}\)
None of the above

Which of the following pairs of goods is an example of substitutes?

Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers

Who expressed the view that “Economics should be neutral between ends”?

Robbins
Marshall
Pigou
Adam Smith

What implication does resource scarcity have for the satisfaction of wants?

Not all wants can be satisfied
We will never be faced with the need to make choices
We must develop ways to decrease our individual wants
The discovery of new natural resources is necessary to increase our ability to satisfy wants

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