231. Micro economics deals with –

1. the circular flow of income
2. the decision making of a single economic variable like demand
3. understanding unemployment
4. economic growth

Option “B” is correct
Micro economics deals with the decision making of a single economic variable like demand.
232. “Residex Index” is associated with which of these?

1. Share Prices
2. Mutual Fund Prices
3. Price Inflation Index
4. Housing Prices

Option “D” is correct
The RESIDEX was first launched in 2007 by the National Housing Bank (NHB) to provide an index of residential prices in India.
233. For internal financing of Five Year Plans, the Government depends on ___________.

1. taxation and public borrowing
2. taxation, public borrowing and deficit financing
3. Only taxation
4. none of these

Option “B” is correct
For internal financing of Five Year Plans, the Government depends on taxation, public borrowing and deficit financing.
234. The average variable cost curve is ____ shaped.

1. U
2. V
3. X
4. W

Option “A” is correct
The Average Variable Cost Curve is ‘U’ shaped
235. 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 __________.

1. Law of demand
2. Law of supply
3. Law of substitution
4. Law of optimal choice

Option “A” is correct
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.
236. 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 –

1. 90
2. 80
3. 30
4. 110

Option “D” is correct
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
237. Which among the following does not count in the development expenditure of government?

1. Expenditure on economic services
2. Expenditure on social services
3. Grant to states
4. Defence expenditure

Option “D” is correct
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.
238. The minimum price at which I was willing to sell my old TV was Rs 37,000. I quoted Rs 50,000 while selling it, but it sold for Rs 42,000. This transaction generated _____.

1. Rs 5000 worth of consumer surplus
2. Rs 8000 worth of consumer surplus
3. Rs 5000 worth of producer surplus
4. Rs 8000 worth of producer surplus

Option “C” is correct
Transaction generated=(Selling price)-(price at which willing to sell)
=42000-37000
= Rs. 5000.
239. Suppose the equilibrium price for sugar is Rs. 50/kg. If the government sets a price floor of R s. 70/kg then __________.

1. quantity of sugar demanded will be greater than the quantity demanded at equilibrium price
2. there will be a shortage of sugar in the market
3. there will be a surplus of sugar in the market.
4. quantity of sugar supplied will be less than what was supplied at the equilibrium price

Option “C” is correct
Price floor is a situation when the price charged is more than or less than the equilibrium price determined by market forces of demand and supply,so there will be surplus of sugar in the market.
240. If for the year a country’s GDP was $990 million, consumer spending was $630 million, investment by businesses was $110 million, exports were $55 million and imports were $45 million, calculate government spending?

1. $260 million
2. $240 million
3. $480 million
4. $460 million

Option “B” is correct
GDP= Consumer Spending+Government Spending+Investment by Business+(Export-Import)
990=630+Government Spending+110+(55-45)
Government Spending=$240.
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