1. Human wants are

A. limited
B. scarce
C. unlimited ✔
D. in grades

Explanation:
Human wants are unlimited because people always desire more goods and services.

2. The difference between money cost and real cost:

A. real cost is the alternative forgone while the money cost is the actual amount paid for buying the item ✔
B. the real cost is the opportunity cost, while the money cost is the marginal cost
C. money cost is the opportunity cost, while the real cost is the actual cost in monetary terms
D. money cost is always greater than the real cost

Explanation:
Real cost = opportunity cost (what you give up), Money cost = amount paid.

3. Production possibility curve (PPC) indicates:

A. less of the other goods is produced ✔
B. the same quantity of the other good is produced
C. more of the other good is produced
D. none of the other good is produced

Explanation:
PPC shows trade-off: producing more of one good reduces the other.

4. An arrangement of data in rows and columns is referred to as:

A. graph
B. bar chart
C. pie chart
D. table ✔

Explanation:
Tables organize data in rows and columns for easy reading.

5. A normal demand curve slopes:

A. downward from left to right ✔
B. upwards from right to left
C. downwards from right to left
D. upwards from left to right

Explanation:
As price rises, quantity demanded decreases → downward slope.

6. Coefficient of income elasticity of demand for inferior goods:

A. positive
B. equal to one
C. less than one
D. negative ✔

Explanation:
For inferior goods, demand decreases as income rises → negative elasticity.

7. Cross elasticity of demand:

Price of Whiskey rises 20%, quantity demanded of Schnapps rises 30%, $E_{xy} = \frac{\%ΔQ_y}{\%ΔP_x} = \frac{30}{20} = 1.5$ ✔

A. 3.0
B. 2.5
C. 2.3
D. 1.5

Explanation:
$E_{xy} = \frac{30\%}{20\%} = 1.5$ → substitutes.

8. Palm oil and palm kernel have:

A. competitive supply
B. excess supply
C. joint supply ✔
D. composite supply

Explanation:
Both are obtained from same source → joint supply.

9. A vertical supply curve elasticity:

A. 0.0 ✔
B. 0.5
C. 1.5
D. 2

Explanation:
Vertical supply → quantity supplied does not change with price → perfectly inelastic.

10. Current apple price twice last year → value of money is:

A. stable
B. falling ✔
C. rising
D. getting stronger

Explanation:
Higher prices mean money buys less → value of money falls.

11. Price fixed above equilibrium:

A. protect agricultural producers ✔
B. discourage producers
C. lower price for producers
D. favour consumers

Explanation:
Price floor → ensures minimum price for farmers.

12. Consumer maximizes satisfaction:

A. $P_x = MU_x$ ✔
B. $P_x \ge MU_x$
C. $P_x > MU_x$
D. $P_x < MU_x$

Explanation:
Utility maximization rule: price equals marginal utility.

13. Total utility constant → marginal utility is:

A. increasing
B. zero ✔
C. decreasing
D. one

Explanation:
No change in total utility → marginal utility = 0.

14. Rational consumer:

A. spends income to maximize satisfaction ✔
B. not influenced by ads
C. behaves same all the time
D. buys cheapest goods

Explanation:
Rational consumer seeks maximum satisfaction with limited income.

15. Which is not true about land:

A. supply is fixed
B. land is mobile ✔
C. subject to diminishing returns
D. land is heterogeneous

Explanation:
Land is immobile → statement B is false.

16. Production involving natural resources:

A. primary production ✔
B. secondary production
C. tertiary production
D. industrial production

Explanation:
Primary production → extracting and using natural resources.

17. Which does not change in short run:

A. variable cost
B. marginal cost
C. total cost
D. fixed cost ✔

Explanation:
Fixed cost remains constant in short run.

18. Resources used in production are called:

A. variable inputs
B. factors of production ✔
C. capital for production
D. fixed inputs

Explanation:
Land, labour, capital, entrepreneurship → factors of production.

19. Firm will shut down in long run if earnings:

A. less than normal profit ✔
B. greater than normal profit
C. equal to super normal profit
D. less than super normal profit

Explanation:
Cannot cover opportunity cost → shut down.

20. Market structure: MR = MC = P →

A. perfect competition ✔
B. monopoly
C. oligopoly
D. imperfect competition

Explanation:
Perfect competition maximizes profit where MR = MC = P.

21. Firm can earn supernormal profit short & long run:

A. Monopoly ✔
B. Duopoly
C. Oligopoly
D. Monopsony

Explanation:
Monopoly → barriers prevent entry → long-run supernormal profit.

22. No barriers to market entry:

A. anyone can become a buyer or seller ✔
B. unwanted goods enter
C. market dumping ground
D. goods not inspected

Explanation:
Free entry/exit → open competition.

23. Firm's main aim:

A. survive
B. maximize profits ✔
C. increase market share
D. satisfy managers

Explanation:
Economic theory: firms aim to maximize profit.

24. Reason to eliminate middlemen:

A. cause increase in price ✔
B. help in price stability
C. grade and blend goods
D. too many

Explanation:
Middlemen increase cost → higher prices.

25. Increase in population growth in cities:

A. settlement
B. migration
C. industrialization
D. urbanization ✔

Explanation:
Urbanization = growth of cities due to population influx.

26. Reduce frictional unemployment:

A. encouraging retaining schemes
B. removing barriers to labour mobility ✔
C. restrict technology
D. lower youth wages

Explanation:
Labour mobility → easier matching of jobs.

27. Labour force 2.5 million, employed 2 million. Unemployment rate:

$UR = \frac{2.5-2}{2.5} × 100\% = \frac{0.5}{2.5} ×100 = 20\%$ ✔

Explanation:
$UR = \frac{unemployed}{labour~force} ×100\%$.

28. Population grouping by economic activity:

A. age distribution
B. sex distribution
C. geographical distribution
D. occupational distribution ✔

Explanation:
Occupational distribution = grouping by type of work.

29. Natural growth rate of population:

A. difference between birth rate and death rate ✔
B. number of births
C. increase in population
D. difference between total population and death rate

Explanation:
NGR = birth rate − death rate.

30. Not a consequence of unemployment:

A. fall in tax revenue
B. reduction in trade union influence
C. fall in death rate ✔
D. increase in labour force

Explanation:
Unemployment usually increases death rate → C is false.

31. Features of subsistence agriculture except:

A. little capital
B. processing of raw materials ✔
C. small land allotments
D. use of crude tools

Explanation:
Subsistence agriculture → raw output consumed, minimal processing.

32. Not true of small companies:

A. cannot benefit from economies of scale
B. good source of new jobs
C. satisfy specialist markets
D. have good technical innovation record ✔

Explanation:
Small companies usually **innovative** → statement D is correct? Actually D is true → careful → A is the correct answer ✔ ✅

33. Effect of privatization:

A. ensures efficiency ✔
B. discourages efficiency
C. decrease output
D. leads to liquidation

Explanation:
Privatization → market forces → efficiency.

34. Production strategy for over-populated country:

A. import substitution
B. capital intensive
C. labour intensive ✔
D. first come first served

Explanation:
Labour abundant → labour-intensive production.

35. National income measures:

A. population
B. economic growth ✔
C. human development
D. flow of imports

Explanation:
National income measures economic growth of a country.

36. Regressive tax:

A. rate constant
B. rate decreases as income increases ✔
C. rate increases as income increases
D. direct tax

Explanation:
Regressive → poor pay higher % of income.

37. Net income from abroad added →

A. GDP
B. NNP
C. GNP ✔
D. NDP

Explanation:
GNP = GDP + net income from abroad.

38. Fall in national output will necessitate:

A. rise in imports
B. rise in savings
C. increase in consumption expenditure ✔
D. rise in standard of living

Explanation:
Lower output → stimulate demand via consumption.

39. Demand for money to take advantage of bond prices:

A. unforeseen motive
B. transaction motive
C. speculative motive ✔
D. precautionary motive

Explanation:
Speculative motive = hold money to buy assets when prices fall.

40. Cost-push inflation is caused by:

A. rise in cost of production ✔
B. decrease in transportation cost
C. rise in demand
D. decrease in production cost

Explanation:
Higher production costs → firms raise prices → cost-push inflation.