Micro Economics MCQ (GK Set-1) with Answers

Whether to buy a new loom during the next three months

How much labour to hire over the next three months

How much wool to buy over the next three months

Whether to hire an extra warehouse for the next three months

The whole income of these people is economic rent because land as a whole is in perfectly inelastic supply

The whole income of these people is transfer earnings, because if the rent was any lower they would not bother to rent out their land

The income of these people is divided between economic rent and transfer earnings, and some people have higher transfer earnings and lower economic rent than others.

The income of these people is divided between economic rent and transfer earnings, and the proportion of this income which is economic rent is the same for all of them

The future value of Rs.1,000 in three years’ time is Rs.1,300

The present value of Rs.1,300 in three years’ time is Rs.1,000

The future value of Rs.1,331 in three years’ time is Rs.1,000

The present value of Rs.1,331 in three years’ time is Rs.1,000

The future returns are the extra revenue the firm will get from owning the machine.

The net present value of the machine is Rs.500

The firm might not buy the machine now simply because of the risk involved

If the firm does not buy the machine now, but redoes the calculations in three months, it might find the net present value has increased

If prices rise at a rate faster than the nominal interest rate, then real interest is negative

If the risk-free interest rate rises, the projects whose net present values are most affected are those with short lives

The internal rate of return on a project is the discount rate which would make its net present value zero

The internal rate of return on a project is a percentage measure of its expected returns