EXERCISE Competency Based Learning: Objective Questions I. Multiple Choice Questions: Choose the Correct Answer 1, Which of the following is not concerned with the problem of choice? (a) Excessive income (b) Alternative use of resources (c) Unlimited wants (d) Limited (scarce) resources 2, Principal characteristics of resources are: (a) they are scarce in relation to our needs _(b) they have alternative us (c) both (a) and (b) (d) none of these 3. In which of the following situations, does scarcity arise? (a) Supply of resources > Demand for resources (b) Supply of resources < Demand (€) Supply of resources = Demand for resources (d) None of these 4, Economic problem arises due to the fact that: {a) resources are scarce (b) human wants are unlimited (c) resources have alternative uses (d) all of these 5. The resources for satisfying human wants are: (a) limited (b) unlimited (c) available at zero prices (d) none of these 6. Scarcity of resources exists: (a) at the micro level (b) at the macro level (©) micro as well as macro level (d) none of these 7. Positive economics involves statements which are: (a) verifiable (b) not verifiable (c) may or may not be verifiable (d) none of these 8. A statement which does not offer any suggestion is known as: (a) positive statement (c) both (a) and (b) 9. Normative economics deals with: (a) facts (c) both (a) and (b) 10. Which of the followin, (a) Production (©) Exchange 1, Who controls economic a (a) Industrialists (b) normative statement (d) none of these (b) opinions (d) none of these g is the example of economic activity? (b) Consumption (d) All of thes tivities under centrally planned economies? (b) Private firms (©) Government 12, The government does no: {a) market economy (©) mixed economy (d) Consumers t interfere in the process of decision-making under: (b) centrally planned economy (4) all of these(b) free economy (d) both (b) and (c) 2 30) 41 50 6 7.6) 8) 90) 10.) 12.(a) 13d) [1, Choose appropriate word and fill in the blank “1, Choice isthe outcome of (scarcity/decision-making) dy of economy as a whole is called economics. (macro/micro) "3, Microeconomics studies the economic activites of units, (individual/non-economic) _ economics relates to the study of economic issues which are subject to verification. (Positive/Normative) __ is a system by which people of an area earn their living, __(Economy/Economics) economy, private sector dominates the economic activity, _(market/mixed) (government/market forces) In free economy, economic activities are controlled by the. 2, macro 3.individual 4. Positive 5.Economy 6. market ‘rue-False Alternatives he following questions (1-2), two statements are given. Read the statements carefully and chose the correct ‘among those given below: | Both the statements are false ‘Statement | is true and Statement 2 is false ent 2 is true and Statement 1 is false + Positive statements are verifiable for truth. + Normative statements lead to controversies and debates, + Ina free economy, the consumer buys goods according to his choice. + Ina mixed economy, the consumer is not sovereign. Identify the Correct Sequence of Alternatives of Statements/ Jand Column II, choose the correct pair of statements: (j) Deals with the aggregates atthe level of the economy asa whole (ji) Process of selection from available limited alternatives (iii) Involves value judgment {iy) Statements as based on facts and figures related to past, present or futureColumn It (i) Unlimited (ii) Economics of ‘what ought to be’ (iti) A system by which people of an area earn + (iv) Studies the problem of choice atthe level of i), C—Civ), D—(ii (d) A—Giii), B—(), C—(ii), D—(iv ut of Assertion (A) is followed by a statement of Reason |& (R) are true and Reason (R) is the correct explanation (R) are true and Reason (R) is not the correct explanation o' son (R) is true is the process of selection from available limited alternatives. are scarce and have alternative uses. jomics deals with economic issues (or economic behaviour) rel ces are not related to each other. of scarcity of resources, Hence, the two are related f° ilable at zero price.A s : ree commodity. available at zero price, yet it is a scarce commodity. Because, it involv ; es k of scarcity definitely implies lack of economic :no choices in resource allocation, economics would not have existed Hwere no alternative choices in resource allocation, there would be no economic problem sources are not equally scarce all the time. [tis possible that some resources are more scarce than the other Jabour is certainly less scarce than capital. 4 point of time. In India, for m of resource allocation would not arise if resources had no alternative uses. Problem of resource allocation arises because resources have alternative uses. Where is the if piece of land can only be used for the production of rice? Grow rice and relax! ‘statements are the statements of truth. isa positive statement that Virat Kohli is a good batsman as he has scored highest number of aturies in test cricket. Ttis a positive statement, as it can be verified. Based Learning: Data/Picture Based & Case-Study Based Questions Based Questions Public sector ‘dominates the ‘economic ‘activity, The consumer Is not sovereign of the above chart answer the following question: in given blank. ectalternative robe iledingiven NE ay (qd) Free economy(b) Macroeconomics (d) None of these Higher education should be free. Should alternative fuels be subsidized? We must try to boost disposable income, has declined by 15% he past four years. ‘Incomes fall the demand Basic healthcare to all citizens should be free Unemployment is more harmful than inflation. ‘The minimum wage should be raised by 20%, ‘Market mechanisms should be allowed to work freely inorder to make sure resources are best allocated, Alcohol consumption should be controlled by enforcing minimum prices for alcoholic bevetags sold in supermarkets 1s belonging to ‘positive economics’ and ‘normative economics ‘the statements mentioned in each image. Also differentiate mples, e WO concepts is as follows: Hof economics which deals with such issues which are verifiable & India is below poverty line. On the other hand, normative eames which deals with such issues which involve value ple: Farmers should always be granted subsidies to ensu® >to ‘what ‘was’, ‘what is’ and ‘what would be’. On the other mics relate to'what ought to be’ Hh ss ‘questions 1-6 on the basis of the same: which an economy can run and make decisions about ‘to produce and exchange them, how should the income froet mechanism and re and that betw : gulatio lon certain principles, like provision of private Property rights, agents (consumers and producers) to pursue private motives Be tO In an open economy and free trade envir as Fey a ch they have comparative advantage Ore tifa country ean produce a particular good at east opportuni Id then the country has comparative advantage in Producing 1 Shaikh, Comparative Economic Systems—A Brief Re . Capitalism is an free market economy and self-interest with ‘onment, countries Parative advantage 'Y Cost comparatively than that good view, 2012 +the degree of consumer sovereignty is highest (Fill up the blank with correct alte (b) centrally planned economy (4) both (a) and (e) ally planned economy? (Choose t trol of central authority ynership of resources by government sumer sovereignty lance over economic activity by public sector Heh among the following countries is not capitalistic or market driven in nature? (Choose the ¢ (b) Ireland (d) Canada economy is an economy in which the degree of interdependence and exchange is of a erate degree, (Fill up the blank with correc (b) Complex (4) None of these Hthe following statements carefully and choose the correct alternative among those given below: + Ina simple economy, income level of the people is low. + Ina complex economy, wants are multiple as well as enormous. the statements are true the statements are false a wctivity, True or False) ‘economy, both public and private sectors dominate the economic activity, ( {thority plans all the important activities in Peecmibaeaveramet ae allocation of resources and a consequent authority may try to achieve © Pat which is thought to be desirable for society as a ee i very impart for the prosperity and ifitis found that Peete “adequate amount by the individuals on their own, ay as a whole is not pro yea whe 9