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Two friends Komal and Ritika were discussing the Government budget.
"Through its budgetary policy the government of a country directs the allocation of resources in a manner such that there is a balance between the goals of profit maximisation and social welfare".
The above-mentioned statement was given by Komal, identify the objective of Government budget was she talking about?
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Assertion (A): GDP is the correct measure of the improvement of welfare of the people.
Reason (R): Many activities in an economy are not evaluated in monetary terms, they are not included in GDP due to non-availability of data.
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Identify the correct pair of items from the following Columns I and II:
| Columns I | Columns II |
| (1) Marginal Rate of Substitution (MRS) | (a) It states the real employment of the consumer from which he can purchase certain qualitative bundles of three goods at given price. |
| (2) Consumer's Bundle | (b) It refers to the number of units of good Y which the consumer is willing to gain for an additional unit of goodX. |
| (3) Budget set | (c) It is quantitative combination of those bundles which a consumer can purchase from his given income at prevailing market prices. |
| (4) Consumer Budget | (d) It is a qualitative combination of three goods which can be purchased by a consumer from his given expenses at given prices. |
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Under the condition of profit maximisation, MR must be equal to ______
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Identify the correctly matched statements from Column I to that of Column II:
| Column I | Column II |
| 1. Total revenue | (a) Sum of marginal revenues |
| 2. MC > ATC | (b) Stage III |
| 3. MP is negative. | (c) Qx = f(L, K) |
| 4. Production Function | (d) ATC must rise. |
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______ is Domestic Income.
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______ occurs when the currency exchange rate is officially lowered under a fixed exchange rate system.
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The managed floating system is a combination of ______
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______ is the difference between gross and net.
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______ is the difference between Domestic Income and National Income.
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If inflation is higher in country A than in Country B, and the exchange rate between the two countries is fixed, what is likely to happen to the trade balance between the two countries?
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A system that allows adjustment in the fixed exchange rate is referred to as ______
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______ system allows continuous and regular adjustments in the exchange rate.
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Condition for equilibrium in monopoly:
- MC is equal to MR.
- MC curve cuts the MR from below.
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The marginal revenue curve shows the relationship between ______ and ______.
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Assertion (A): When the Average Cost is constant, the AC curve is at its minimum point.
Reason (R): At this point, the MC curve cuts the AC curve, which implies MC = AC.
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Statement 1: Marginal revenue curve is parallel to the x-axis.
Statement 2: The slope of the marginal revenue curve is upward sloping.
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Aggregate Demand is not determined by which of the following.
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Read the following passage and answer the question that follows:
| The ordinal list revolution originates in the criticism of the psychological foundations of the theory of demand, namely, the principle of decreasing marginal utility as Alfred Marshall ([1890] 1898) used it. The rejection of hedonist hypotheses led Irving Fisher (1892) and Pareto (1896-97, 1900, 1909) to favour an objective or "positive" approach to economic concepts. The "ordinal list revolution" (Omarzabal 1995, 116) is grounded in a methodological transformation of economics that put the facts of objective experience as a foundation of economics and provided a research program for the ensuing years (Green and Moss 1993; Lewin 1996). Mathematically, ordinalism is entirely based upon the idea that one can dispense with the use of a specific utility function and that no meaning shall be attached to utility measurement, except as an ordinal principle. Clearly, the development of ordinalism must be separated from the introduction of the concept of the indifference curve. Ordinalism was first advocated in Fisher's "Mathematics Investigations" (1892) and Pareto's Sunto (1900) and Manual ([1909] 1971), while the indifference curve had appeared in F. Y. Edge Worth's Mathematical Psychics (1881). It was thus only through Fisher's and Pareto's recasting that the concept of the indifference curve became irreversibly associated with the promotion of ordinalism. Along the way, the recasting of the theory of choice along ordinal list lines raised a number of issues (about integrability, measurability, and complementarity) that would be progressively settled. The reasonable closing date for the ordinalist revolution is 1950, after Houthakker's (1950) and Samuelson's (1950) contributions. From the late 1920s, the Paretian school was progressively gaining a larger audience while the use of the concept of marginal utility and other derivative concepts was challenged. Consequently, demand theory was recast along with the principles of individual preferences and ordinal utility functions. Nevertheless, English authors proved very silent about the meaning of indifference curves. Most if not all of the reflections after 1920 about the nature of indifference curves took place in America, mainly under the impulse of Henry Schultz at Chicago. This is an American story. |
Consider the given statement:
Under the Cardinal Utility approach, utility is measured in utility.
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Read the following passage and answer the question that follows:
| The ordinal list revolution originates in the criticism of the psychological foundations of the theory of demand, namely, the principle of decreasing marginal utility as Alfred Marshall ([1890] 1898) used it. The rejection of hedonist hypotheses led Irving Fisher (1892) and Pareto (1896-97, 1900, 1909) to favour an objective or "positive" approach to economic concepts. The "ordinal list revolution" (Omarzabal 1995, 116) is grounded in a methodological transformation of economics that put the facts of objective experience as a foundation of economics and provided a research program for the ensuing years (Green and Moss 1993; Lewin 1996). Mathematically, ordinalism is entirely based upon the idea that one can dispense with the use of a specific utility function and that no meaning shall be attached to utility measurement, except as an ordinal principle. Clearly, the development of ordinalism must be separated from the introduction of the concept of the indifference curve. Ordinalism was first advocated in Fisher's "Mathematics Investigations" (1892) and Pareto's Sunto (1900) and Manual ([1909] 1971), while the indifference curve had appeared in F. Y. Edge Worth's Mathematical Psychics (1881). It was thus only through Fisher's and Pareto's recasting that the concept of the indifference curve became irreversibly associated with the promotion of ordinalism. Along the way, the recasting of the theory of choice along ordinal list lines raised a number of issues (about integrability, measurability, and complementarity) that would be progressively settled. The reasonable closing date for the ordinalist revolution is 1950, after Houthakker's (1950) and Samuelson's (1950) contributions. From the late 1920s, the Paretian school was progressively gaining a larger audience while the use of the concept of marginal utility and other derivative concepts was challenged. Consequently, demand theory was recast along with the principles of individual preferences and ordinal utility functions. Nevertheless, English authors proved very silent about the meaning of indifference curves. Most if not all of the reflections after 1920 about the nature of indifference curves took place in America, mainly under the impulse of Henry Schultz at Chicago. This is an American story. |
______ is a curve showing different combinations of two goods, each combination offering the same level of satisfaction to the consumer.
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