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General-Studies Quiz For FCI Phase I 2022- 21st September

Q1 “Residex Index” is associated with which of these?
(a) Share Prices
(b) Mutual Fund Prices
(c) Price Inflation Index
(d) Housing Prices

Q2. For internal financing of Five Year Plans, the Government depends on ___________.
(a) taxation and public borrowing
(b) taxation, public borrowing and deficit financing
(c) Only taxation
(d) none of these

Q3.The average variable cost curve is ____ shaped.
(a) U
(b) V
(c) X
(d) W

Q4.If a consumer’s demand for a good moves in the same direction as the consumer’s income, the consumer’s demand for that good must be inversely related to the price of the good is called __________.
(a) Law of demand
(b) Law of supply
(c) Law of substitution
(d) Law of optimal choice

Q5. Irfaan loves black coffee. A roadside stall selling a cup of black coffee at Rs. 120, offered 25% discount to Irfaan. If Irfaan was willing to pay even Rs. 200 for this cup of black coffee, Irfaan’s consumer surplus is –
(a) 90
(b) 80
(c) 30
(d) 110

Q6. Which among the following does not count in the development expenditure of government?
(a) Expenditure on economic services
(b) Expenditure on social services
(c) Grant to states
(d) Defence expenditure

Q7. If demand curve for a fishing rod is D = 37000 – 11P and supply curve is S = 12000 + 9P, find the equilibrium quantity?
(a) 1250 units
(b) 23250 units
(c) 52350 units
(d) 2500 units

Q8. The minimum price at which I was willing to sell my old TV was Rs. 7,000. I quoted Rs. 12,000 while selling it, but it sold for Rs. 10,500. This transaction generated –
(a) Rs. 3,500 worth of consumer surplus
(b) Rs. 5000 worth of consumer surplus
(c) Rs. 5000 worth of producer surplus
(d) Rs. 3,500 worth of producer surplus

Q9. If the fixed costs of a factory producing candles is Rs 20,000, selling price is Rs 30 per dozen candles and variable cost is Rs 1.5 per candle, what is the break-even quantity?
(a) 20000
(b) 10000
(c) 15000
(d) 12000

Q10. Calculate the economic profit for a firm if it’s total revenues are Rs. 35 crores, explicit costs are Rs. 7 crores, and implicit costs are Rs. 10 crores.
(a) Rs. 32 crores
(b) Rs. 52 crores
(c) Rs. 18 crores
(d) Rs. 38 crores

Solutions

S1.Ans.(d)
Sol. The RESIDEX was first launched in 2007 by the National Housing Bank (NHB) to provide an index of residential prices in India.

S2. Ans.(b)
Sol. For internal financing of Five Year Plans, the Government depends on taxation, public borrowing and deficit financing.

S3. Ans.(a)
Sol.The Average Variable Cost Curve is ‘U’ shaped.

S4.Ans.(a)
Sol.If a consumer’s demand for a good moves in the same direction as the consumer’s income, the consumer’s demand for that good must be inversely related to the price of the good is called Law of demand.

S5. Ans.(d)
Sol.Consumer surplus is defined as the difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay.
Irfan willing to pay =200
Irfan actual pay after discount=90
Consumption surplus=Irfan willing to pay – Irfan actual pay after discount
=200-90
=110

S6. Ans.(d)
Sol. Developmental expenditure refers to the expenditure of the government which helps in economic development by increasing production and real income of the country.It doesn’t include Defence expenditure.

S7. Ans.(b)
Sol. Demand= Supply ( at Equillibrium)
37000-11P=12000+9P
25000=20P
P=1250
(Equillibrium)D=37000-11*1250
=23250

S8. Ans.(d)
Sol.Transaction= 10500-7000
=3500
Thus, the transaction generated is Rs. 3,500 worth of producer surplus .

S9. Ans.(a)
Sol. B.E.Q=Fixed cost/(price per unit- variable cost)

Price per unit=30/12
=2.5
B.E.Q=20000/(2.5-1.5)
=20000.

S10. Ans.(c)
Sol. Economic profit =Revenue-(Implicit cost + explicit cost).
EP=35-(7=10)
= 35-17
=18 Cr.

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