Economics

✅ The correct answer is D.
The various combination of goods that can be produced in any economy when it uses its available resources and technology efficiency are depicted by Production possibility curve. A production possibility frontier (PPF) shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed.

✅ The correct answer is B.
Marshall described economics as a science of material welfare. Marshall’s view is that economics studies all the actions that people take in order to achieve economic welfare. In the words of Marshall, “man earns money to get material welfare.”

✅ The correct answer is B.
For inferior commodities, income effect is Negative. When price of an inferior good falls, its negative income effect will tend to reduce the quantity purchased, while the substitution effect will tend to increase the quantity purchased.

✅ The correct answer is B.
Law of substitution is another name for law of Law of Equi-MU. The Law of equimarginal Utility is another fundamental principle of Econo­mics. This law is also known as the Law of substitution or the Law of Maxi­mum Satisfaction.

✅ The correct answer is D.
Utility is more closely related to the term Satisfaction. The term was introduced initially as a measure of pleasure or satisfaction within the theory of utilitarianism by moral philosophers such as Jeremy Bentham and John Stuart Mill.

✅ The correct answer is A.
Total costs in the short-term are classified into fixed costs and variable costs. Cost of raw material is a variable cost. Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output.

✅ The correct answer is D.
Price of product is not a cause of shift in cost curves of a firm. Cost curves shift in response to changes in two factors: If a technological change results in the firm using more capital, the average fixed cost curve shifts upward and at low levels of output, the average total cost curve may shift upward. At large output levels, average total cost decreases.

✅ The correct answer is C.
Demand for final consumption arises in both household and government sector. In the basic two- sector circular flow of income model, the economy consists of two sectors: (1) households and (2) firms.

✅ The correct answer is A.
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as Explicit cost. An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, where no actual payment is made.

✅ The correct answer is B.
When price elasticity of demand for normal goods is calculated, the value is always Negative. The PED is the percentage change in quantity demanded in response to a one percent change in price. The PED coefficient is usually negative, although economists often ignore the sign. Demand for a good is relatively inelastic if the PED coefficient is less than one (in absolute value).