Railway/SSC JE 2019 Economics quiz for Phase I and other railways exams 13/02/2019

Railway/SSC JE 2019 Economics  quiz for Phase I

Railway/SSC JE Economics quiz for  (Phase I), RRB NTPC, SSC various exams and other competitive exams.

Q1.If demand curve for trekking boots is D = 67500 – 18P and supply curve is S = 22500 + 12P, find the equilibrium Price?

(a) 1500                               

(b) 750

(c) 2250                                                

(d) 500

Q2. As per the National Manufacturing Policy, the land area of a National Investment and Manufacturing Zone is to be minimum ____?

(a) 1000 Hectares

(b) 2000 Hectares

(c) 3000 Hectares

(d) 5000 Hectares

Q3.A hand made paper workshop can hire 8 craftsmen by paying them Rs 400 per person per day. The 9th craftsman demands Rs 450 per day. If this craftsman is hired then all other craftsmen must be paid Rs 450. The marginal resource (labour) cost of the 9th craftsman is –

(a) Rs 50                                              

(b) Rs 850

(c) Rs 800                                            

(d) Rs 100

Q4.Unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand is called

(a) Structural unemployment    

(b) Frictional unemployment

(c) Seasonal unemployment

(d) Cyclical unemployment

Q5.A manufacturer faces price elasticity of demand of a 1.25 for its product. If it lowers its price by 6.4%, the increase in quantity sold will be _____.

(a) 5.15 percent               

(b) 7.65 percent

(c) 8 percent                     

(d) 5.12 percent

Q6.Calculate the accounting profits for a firm, if its economic profits for the year are Rs 60 crores, total implicit costs are Rs 18.5 crores and total explicit costs are Rs 35 crores?

(a) Rs 113.5 crores                          

(b) Rs 43.5 crores

(c) Rs 76.5 crores                             

(d) Rs 78.5 crores

Q7.If tea companies start using mechanised tea leave pickers –

(a) more people would want to work as tea leave pickers

(b) unemployment of tea leave pickers will decrease

(c) more tea will be produced per acre

(d) then wages for manual tea leave pickers will fall

Q8.If for a perfectly competitive firm, price is Rs 7.2, output is 4500 units, average variable costs are Rs 1.2, and average total costs are Rs 4. The firm’s profits are equal to

(a) Rs 7200                          

(b) Rs 9000

(c) Rs 14400                        

(d) Rs 19800

Q9.A minimum wage _____.

(a) is the price floor below which workers may  sell their labor

(b) is set at a price below the equilibrium wage

(c) creates a price ceiling below which the wage cannot legally go

(d) decreases unemployment

Q10. If quantity of good X demanded increases from 4000 units to 5000 units when price of good Y increases from Rs 75 to Rs 90, find Arc Cross elasticity of demand?

(a) 0.55                                

(b) 1.66

(c) 0.25                                 

(d) 1.28

Solution

Ans.1.(a)

Exp. At Equilibrium, Demand=Supply

       Thus,   67500-18P=22500+12P

                       P=45000/30

       Equilibrium Price P =1500.

Ans.2.(d)

Exp.

Ans.3.(b)

Exp. Marginal cost is the change in the opportunity cost that arises when the quantity produced is incremented by one unit, that is, it is the cost of producing one more unit of a good.

Total amount paid to 8 craftsman before demand of 9th craftsman = 8 ×400

=3200

Total amount paid to 9 craftsman after demand of 9th craftsman    =9×450

=4050

Marginal cost=4050-3200

=850

Ans.4.(a)

Exp. Unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand is called Structural unemployment.

Ans.5.(c)

Exp. Elasticity =% Change in quantity/%Change in price

                 1.25 =X/6.4

                     X   = 6.4*1.25

                          =8%    

Ans.6.(d)

Exp. Economic Profit=Accounting Profit- Implicit Cost

               60= Accounting Profit – 18.5

    Accounting Profit = 78.5 Crores.

Ans.7.(d)

Exp.If tea companies start using mechanised tea leave pickers then wages for manual tea leave pickers will fall.

Ans.8.(c)

Exp.

Ans.9.(c)

Exp.A minimum wage is creates a price ceiling below which the wage cannot legally go.

Ans.10.(d)

Exp.The arc elasticity of demand can be calculated as:

Arc Elasticity = [(Qd2 – Qd1) / midpoint Qd] ÷ [(P2 – P1) / midpoint P]

Midpoint Qd = (Qd1 + Qd2)/2 = (4000 + 5000)/2 = 4500

Midpoint Price = (P1 + P2)/2 = (75 + 90)/2 = 82.5

% change in quantity demanded = (5000 – 4000)/4500 = 0.23

% change in price = (90-75)/82.5 = 0.18

Arc Elasticity of demand = 0.23/0.18 = 1.28.

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