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Introduction to Micro Economics Interview Questions & Answers - Learning Mode

Introduction to Micro Economics Interview Questions & Answers - Learning Mode

Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources.

Try Introduction to Micro Economics Interview Questions & Answers - Exam Mode

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Introduction to Micro Economics Interview Questions & Answers - Learning Mode
Try Introduction to Micro Economics Interview Questions & Answers - Exam Mode
Question: A free market economy's driving force is: a)Profit motive b)Welfare of the people c)Rising income and levels of living d)None of the above

Answer: a)Profit motive
Free market economy or capitalist economy is in which all the means of production are owned and controlled by private individuals for profit. Thus, profit motive is the driving force of a free market economy. Source:
Question: Which of these is an example of macro economics?
(a) overall conditions of economy.
(b) total production.
(c) economic behavior of large aggregates.
(d) All of above.

Answer: d)All of above
In macro economics we study the economic behavior of large aggregates such as overall conditions of economy, total production etc. Therefore, all these are a subject of macro economics. Source:
Question: Socialist economy is also known as: a) Mixed economy b) Planned economy c) Capitalist economy d) None of the above

Answer: d)None of the above
A mixed economy is a planned economy in which government has a clear and definite economy plan.
Socialist economy is also known as centrally planned economy because there is central authority to set and accomplish socio-economic goals. Source:
Question: In which type of economy do consumers and producers make their choices based on the market forces of demand and supply? a)Open Economy b)Controlled Economy c)Command Economy d)Market Economy

Answer: d)Market Economy
In a capitalistic economy, producers make their choices based on market forces of demand and supply. Capitalist economy works under price mechanism i.e. prices are determined by free interplay of demand and super forces. A capitalist economy is also known as "Market Economy". Source:
Question: In inductive method, logic proceeds from: a)General to particular b)Particular to general c)Both (a) and (b) d)None of these

Answer: b)Particular to general
Under inductive method, conclusions are drawn on the basis of collection and analysis of facts relevant to the inquiry. Here the logic proceeds from particular to general. This means generalizations are made based on facts collected. Source:
Question: The branch of economic theory that deals with the problem of optimum utilization of resources is called?
a)Micro Economics
a)International Business

Answer: a)Micro Economics
The study of micro economics deals with how a producer allocates his resources and fixes a price of his product for the optimum utilization of resources. Source:
Question: What will be the shape of PPC curve when marginal opportunity cost is constant? a)Concave b)Convex c)Backward bending d)Straight line

Answer: d)Straight line
The slope of PPC depends upon marginal opportunity cost. a constant opportunity cost indicates that given resources are equally suited for the production of two goods. So when opportunity cost is constant, PPC curve is a straight line. Source:
Question: Under a free economy ,prices are: a)Regulated b)Determined through free interplay of demand and supply c)Partly Regulated d)None of these

Answer: b)Determined through free interplay of demand and supply
Under free economy prices are determined by price or market mechanism i.e. there is no authority to determine prices but they are decided by forces of demand and supply. Source:
Question: Where does price mechanism exists? a)Capitalist economy b)Socialist economy c)Both type of economies d)None of the above

Answer: a)Capitalist economy
A capitalist economy has np central planning authority to decide what, how and for whom to produce. this economy uses the impersonal forces of the market demand and supply or price mechanism to solve its central problems. Source:
Question: Under inductive method logic proceeds from: a)General to particular b)Positive to normative c)Normative to positive d)Particular to general

Answer: d)Particular to general
Under inductive method conclusions are drawn on the basis of collection and analysis of facts relevant to the enquiry. the logic in this case proceeds from the particular to general. Source:
Question: Explain the process of calculating the planned activity output through Long term planning?

Answer: c)How society manages its scarce resources
Society has scarce resources and unlimited wants. Economics is the study of how to manage the scarce resources to fulfil the unlimited ends. Economics deals with how to make optimum utilization of scarce resources. Source:
Question: Economics is neutral between ends. The statement is given by: a)L. Robbins b)Mrs. Joan c)Alfred Marshall d)A.C. Pigeon

Answer: a)L. Robbins
According to Prof. Lionel Robbins economics is neutral between ends. Ends refer to wants. Human wants are unlimited. When want is satisfied, other wants crop up. Source:
Question: According Robbins, 'means' are: a)Scarce b)Unlimited c)Undefined d)All of these

Answer: a)Scarce
Robbins in his scarcity definition explains that there are unlimited ends and limited means. Resources are limited in nature and have alternative uses. Source:
Question: Economic problem arises when:-

a) When wants are unlimited
b) When resources are unlimited
c) When resources have alternative uses
d) All of the above

Answer: d)All of the above
Economic problem arises when wants are unlimited, resources are unlimited and resources have alternative uses. These reasons give rise to basic economic problems of "what to produce", "how to produce" and "for whom to produce". Source:
Question: Micro economics is concerned with: a)Consumer behaviour b)Product pricing c)Factor pricing d)All of the above

Answer: d)All of the above
Micro economics is concerned with:
1)Product pricing
2)Consumer behaviour
3)Factor pricing
4)Study of firms
5)Location of an industry Source:
Question: The term "Mixed Economy" denotes:-

a) Private Sector.
b) Co-existence of both Private and Public Sectors in the economy.
c) Public Sector.
d) None of the Above.

Answer: b)Co-existence of both private and public sectors in the economy.
In a mixed economy, there are three sectors of industries:
1)Private sector
2)Public sector
3)Combined sector Source:
Question: Which one in the following is not correct? a)There are limited wants b)Means are scarce c)Resources have alternative uses d)Economics is science

Answer: a)There are limited wants
According to two fundamental facts, human beings have unlimited wants and the means of satisfying the wants are scarce. Source:
Question: What is the clearing basis for check deposit?

Answer: c)Alfred Marshall
Economics is the study of mankind in the ordinary business of life was given by Alfred Marshall. Source:
Question: A study of how increase in the corporate income tax rate will affect the natural unemployment rate is an example of: a)Macro Economics b)Descriptive Economics b)Micro Economics d)Normative Economics

Answer: a)Macro Economics
Macro economics study the economy as a whole. Therefore,increase in corporate income tax rate and its effect on unemployment is at macro level. Source:
Question: Who has defined economics as "Science which deals with Wealth"

a)Adam Smith b)Canon c)J.B. Say d) Ford

Answer: c)J.B. Say
Many classical economists defined economics in terms of wealth. J.B. Say is one of them. He said Economics is a " Science which deals with wealth". Source:

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Latest 20 Questions
Payment of time- barred debt is: (a) Valid (b) Void (c) Illegal (d) Voidable
Consideration is defined in the Indian Contract Act,1872 in: (a) Section 2(f) (b) Section 2(e) (c) Section 2(g) (d) Section 2(d)
Which of the following is not an exception to the rule, "No consideration, No contract": (a) Natural love and affection (b) Compensation for involuntary services (c) Completed gift (d) Agency
Consideration must move at the desire of: (a) The promisor (b) The promisee (c) The promisor or any other party (d) Both the promisor and the promisee
An offer which is open for acceptance over a period of time is: (a) Cross Offer (b) Counter Offer (c) Standing Offer (d) Implied Offer
Specific offer can be communicated to__________ (a) All the parties of contract (b) General public in universe (c) Specific person (d) None of the above
_________ amounts to rejection of the original offer. (a) Cross offer (b) Special offer (c) Standing offer (d) Counter offer
A advertises to sell his old car by advertising in a newspaper. This offer is caleed: (a) General Offer (b) Special Offer (c) Continuing Offer (d) None of the above
In case a counter offer is made, the original offer stands: (a) Rejected (b) Accepted automatically (c) Accepted subject to certain modifications and variations (d) None of the above
In case of unenforceable contract having some technical defect, parties (a) Can sue upon it (b) Cannot sue upon it (c) Should consider it to be illegal (d) None of the above
If entire specified goods is perished before entering into contract of sale, the contract is (a) Valid (b) Void (c) Voidable (d) Cancelled
______________ contracts are also caled contracts with executed consideration. (a) Unilateral (b) Completed (c) Bilateral (d) Executory
A offers B to supply books @ Rs 100 each but B accepts the same with condition of 10% discount. This is a case of (a) Counter Offer (b) Cross Offer (c) Specific Offer (d) General Offer
_____________ is a game of chance. (a) Conditional Contract (b) Contingent Contract (c) Wagering Contract (d) Quasi Contract
There is no binding contract in case of _______ as one's offer cannot be constructed as acceptance (a) Cross Offer (b) Standing Offer (c) Counter Offer (d) Special Offer
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When an offer is made to the world at large, it is ____________ offer. (a) Counter (b) Special (c) General (d) None of the above
Implied contract even if not in writing or express words is perfectly _______________ if all the conditions are satisfied:- (a) Void (b) Voidable (c) Valid (d) Illegal
A specific offer can be accepted by ___________. (a) Any person (b) Any friend to offeror (c) The person to whom it is made (d) Any friend of offeree
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