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Economics Interview Questions & Answers - Learning Mode

Economics Interview Questions & Answers - Learning Mode

Economics is the scientific study of the ownership, use, and exchange of scarce resources - often shortened to the science of scarcity. Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the behaviour of individuals, groups and organizations. It?s the study of scarcity, the study of how people use resources, or the study of decision-making. Economics often involves topics like wealth, finance, recessions, and banking, leading to the misconception that economics is all about money and the stock market. Actually, it?s a much broader discipline that helps us understand historical trends, interpret today?s headlines, and make predictions for coming decades.

Try Economics Interview Questions & Answers - Exam Mode

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Economics Interview Questions & Answers - Learning Mode
Try Economics Interview Questions & Answers - Exam Mode
Question: What is Ramsay pricing?

Answer: It assigns costs based on the price elasticity of demand. Yet higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products. Source:
Question: What is the impact on the economy if price ceiling or price floor were removed?

Answer: Price ceiling is government rules or laws setting price floors or ceilings that forbid the adjustment of price to clear markets. Price ceilings make it illegal for sellers to charge more than a specific maximum price. Ceilings may be introduced when a shortage of a commodity threatens to raise its price a lot. Source:
Question: What is the difference between project proposal and project feasibility study?

Answer: Project feasibility study is required to make a decision whether the project proposal is technically and economically feasible. After finalization of the project feasibility report by the experts (technical & economical), the decision for going ahead for preparation of Detailed Project Report (DPR) for the project proposal. Source:
Question: Why does an indifference curve never meet?

Answer: No indifference curve can intersect because all points on indifference curve are ranked equally preferred and ranked or less more preferred than every other point on the curve. Source:
Question: How does the current situation in the Middle East affect the US economy?

Answer: An interruption in supply and demand and economic warfare, coupled with unfair business practices in the US causes the price of fuel to rise. During the original invasion of Iraq, tanker traffic in the Persian Gulf was drastically cut for fear of losing ships and cargo. This caused a minor shortage of crude oil. OPEC only sales crude, it is refined (distilled) locally. In capitalist free markets, suppliers are allowed to raise prices during shortages, so that they can outbid other consumers when Source:
Question: Who are Canadas top three trading partners?

Answer: 1 U.S

2 Japan

3 United Kingdom Source:
Question: What is the importance of microeconomics in study of managerial economics?

Answer: It?s a economics for decision making where we have to be very optimize and implement those situation which will be helpful in profit maximization in our business effectively and efficiently

Since the microeconomics explains the concepts like demand, production, supply analysis, so that it maximizes the profit. Source:
Question: Who decides what goods services will be produced and sold in the US?

Answer: It is mostly the American consumer. The US government also plays a large role in the nation's economy, constituting roughly 36% of GDP - making it the largest and thus most influential economic institution and consumer. Manufacturers or those controlling supply may also manipulate demand through advertising and popular media. Source:
Question: What are the advantages of capitalism?

Answer: The advantages of capitalism are that the governments have limited control over other business, which lets business compete. Source:
Question: What kind of market structure is the automotive industry?

Answer: There are many ways to describe the market structure of the automotive industry. Here are two:

One of heterogeneous buyers makes up the population and nearly homogeneous sellers. This means that everyone (the population) needs a car (because a car is not a luxury item), but everyone has different needs (i.e.: compare a mother of 4 to a construction worker). Thus, buyers are everyone in the population, and they are heterogeneous (different). However, sellers are practically the same. GM, F Source:
Question: What are financial centers?

Answer: Banks and brokerage firms are considered financial centers Source:
Question: Why do some people believe that a mixed economic system solves basic economic problems?

Answer: It is because both the private sector and public sector have a say in answering the basic economic questions, thus, there will be a degree of high efficiency (due to the private sector involvement) and social welfare too (due to the public sector involvement).

It allows the Government to intervene when the economy faces market failure. The mixed economic system allows markets to operate freely until it fails to allocate resources efficiently, after this, the government agencies, such as t Source:
Question: What is the difference between service industry and industry in economy?

Answer: Industry is a generic term, but is most commonly used as a substitute term for a manufacturer of goods such as Pepsi or Ford. The term industry can also be used to refer to a very specific group of companies.

The service industry is essentially non-good producing industries such as retail trade, wholesale trade, and the service industries. According to the U.S. Census Bureau, these companies make up 70% of the total economic activity in the United States. Good examples of the service indu Source:
Question: Is there a rule of thumb for office rent or lease per gross income?

Answer: There is a GRM (Gross Rent Multiplier) that compares the total rental/lease income to the value or price of the property.

The price can run 8 to 10 times the gross income, but that can vary based on market conditions, interest rates, management, building type, quality.

Capitalization Rate (cap rate) is a more comprehensive way of evaluation, but if the GRM is known for a building type and location, you can quickly determine a ballpark value. Source:
Question: What are the functions of price mechanism in a free market economy?

Answer: Price Mechanism

Price mechanism is the point, which equilibrates supply and demand within a market. It is a mechanism of pricing. The price mechanism is one, which allows the prices of good and services to be decided by the interplay between supply and demand. There is no centralized price fixing.

The price mechanism is the concept that the free market, when left to its own devices, will formulate fair prices of the goods or services on its own by the natural laws of supply and dem Source:
Question: What is BOP?

Answer: It is called as Balance of payments - an economic term. (BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time, usually a year. The BOP is determined by the country's exports and imports of goods, services, and financial capital, as well as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obliga Source:
Question: What are the advantages of free market economy?

Answer: There are many advantages to a free market economy. They range from the moral issues to the practical issues. We will deal mainly with the practical ones.

Unprecedented innovation - Free markets are wrought with inventions and the capital to research them. Countries classified as having a free market have been responsible for the vast majority of inventions since the 19th century.

Very high-income mobility - This means that under a free market system it is easier to move around inc Source:
Question: How do tax cuts affect the economy?

Answer: Tax cuts improve the economy by giving the people more spending power and higher consumer confidence, which leads to them spending more of all of their income which leads to more jobs, more business investment in more efficient technologies, and ultimately higher GDP growth. Source:
Question: What is profitability analysis?

Answer: This is an analysis of costs and revenue to determine whether a venture will make a profit. This is important information in deciding on whether to make an investment. The length of time required to repay the initial investment can be a critical factor. Source:
Question: What kind of market demand and supply information would be useful to you in deciding upon a business strategy?

Answer: Market Demand and Supply Information

A customer-filled form of the following fields will be of great use. 1) Do you need product urgently?

2) How many times have you visited our store?

3) Was the proper information provided to you?

4) Were you attended properly?

5) Can you afford to pay more for a quick delivery?

6) Have you ever used our product?

7) How do you know about our product? 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
An offer is made with an intention to have negotiation from other party. This type of offer is: (a) Invitation to offer (b) Valid offer (c) Voidable (d) None of the above
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
An agreement toput a fire on a person's car is a ______: (a) Legal (b) Voidable (c) Valid (d) Illegal
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