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4

The study of economic theory for the sake of certain objective is called:

A. Positive Economics

B. Normative Economics

C. Micro Economics

D. Development Economics

Correct Answer :

B. Normative Economics


Normative Economics? Normative economics is that part of economics that expresses value judgments (normative judgements) about economic fairness or what the economy ought to be like or what goals of public policy ought to be. It is common to distinguish normative economics (what ought to be in economic matters) from positive economics (what is).

Related Questions

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The game theory takes into consideration:

A. Reaction of rival firms

B. Reactions of people

C. No reaction of rival firms

D. None of the above

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4

In case of monopoly:

A. MR

B. MR>AR

C. MR=AR

D. AR=0

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4

If X and Y are close substitutes, a rise in the price of X will lead to:

A. Increase in demand for Y

B. Decrease in demand for Y

C. Decrease in demand for both X and Y

D. No change in demand for Y

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4

With the expansion of output, the short run average cost curve, beyond a point, starts rising because:

A. Average fixed cost increases sharply

B. More production yields lower per unit price

C. The law of variable proportions applies to short run production

D. Sales expenses become much larger

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4

The Law of Proportionality is another name of:

A. The law of diminishing marginal utility

B. The law of demand

C. The Law of Diminishing Returns

D. The law of supply

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4

All the firms with identical costs under perfect competition well, in the long-run, earn only:

A. Normal profits

B. Abnormal profits

C. Differential profits

D. No profits

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4

A price is a ratio of exchange between:

A. Money and exchange

B. Quantity and production

C. Production and consumption

D. Money and quantity

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4

Of the following, which one is a characteristic of monopolistic competition?

A. Standardized product

B. Differentiate product

C. Two firms

D. No entry

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4

In case of complementary factors, the isoquants are:

A. L-shaped

B. J-shaped

C. M-shaped

D. V-shaped

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4

In the perfect competition, there is a process of:

A. Restricted entry and exit of the firms

B. Semi free exit but absolute free entry

C. Free entry but restricted exit of the firms

D. Free entry and free exit of the firms

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4

In monopolistic competition, the individual demand curve is also known as:

A. Planned products curve

B. Planned material curve

C. Planned costs curve

D. Planned sales curve

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4

Demand is elastic when the coefficient of elasticity is:

A. greater than zero

B. less than one

C. greater than one

D. less than one

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4

MC curve is:

A. L-shaped

B. U-shaped

C. V-shaped

D. Both a and b depending on situation

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4

Marginal Productivity Theory deals with the theory of:

A. Distribution

B. Exchange

C. Market structure

D. Consumer behaviour

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4

Who is the founder of classical school of thought?

A. David Ricardo

B. Adam Smith

C. T.R.Malthus

D. J.S.Mill

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4

Microeconomics is also known as:

A. Price theory

B. Demand theory

C. Supply theory

D. Income theory

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4

Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:

A. Become equal

B. Decrease

C. Become constant

D. Increase

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4

Perfect competition implies:

A. Differentiated goods

B. Homogeneous goods

C. Advertised goods

D. Distress sale of goods

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4

Which industries spend a relatively large share of their revenue on research and development in order to keep up with their competitors?

A. Grocery stores

B. High-Tech industries

C. Automobiles

D. Construction

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4

Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin) implying:

A. Consumers prefer to have less satisfaction than more of both commodities

B. As more and more of one commodity is obtained, less and less of the other must be given up to keep satisfaction constant

C. The total satisfaction obtained along an indifference curve decreases at an increasing rate

D. None of the above

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An indifference curve shows the bundles of two goods among which a consumer remains:

A. Indifferent

B. Different

C. In equilibrium

D. Dominant

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4

According to Cobb-Douglas, in production function the marginal product of labor is:

A.

B.

C.

D.

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4

After reaching the saturation point consumption of additional units of the commodity cause:

A. Total utility to fall and marginal utility to increase

B. Total utility and marginal utility both to increase

C. Total utility to fall and marginal utility to become negative

D. Total utility to become negative and marginal utility to fall

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4

The longer the period of time, the elasticity of supply will be:

A. Constant

B. Less elastic

C. More elastic

D. Perfectly elastic

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4

If Cobb-Douglas production function is homogeneous of degree greater than one (n>1), then it shows:

A. Constant returns to scale

B. Increasing returns to scale

C. Decreasing returns to scale

D. None of the above

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4

The basic subject matter of economics is:

A. Money

B. Capital resources

C. Scarcity

D. Inflation

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4

Contraction in demand occurs when:

A. Price increases and demand decreases

B. Price increases but demand also increases

C. Price remains constant but demand falls down

D. Price falls down but demand remains constant

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4

According to Saint Thomas Aquinas value is determined by God, but prices by:

A. Consumers

B. Employees

C. People

D. Labor

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4

The equilibrium of a firm is determined by the equality of MC and MR in only:

A. Under perfect competition

B. Under monopoly

C. Under imperfect competition

D. Under all the above market forms

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4

The Cambridge School of Thought refers to the group of English economists who came under the influence of:

A. Alfred Marshal

B. J.M.Keynes

C. Paul A.Samuelson

D. A.C.Pigou