QUESTION 5 The economizing problem is essentially one of dec

QUESTION 5 The economizing problem is essentially one of deciding how to make the best use of O A limited resources to satisfy limited wants O B. unlimited resources to satisfy limited wants. ° C. limited resources to satisfy virtually unlimited wants. D.virtually unlimited resources to satisfy virtually unlimited wants QUESTION6 The production possibities (or transformation) curve illustrates the basic principle that O A an economy\'s capacity to produce increases in propertion to its population size O B if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced O C an economy will automatically seek that level of output at which all of its resources are employed OD the production of more of one good can be done over one week if we make sacrifices of other goods QUESTION 7 The concept of economic efficiency is primanly concemed with O A the different institutions fostered by the various \"isms B the conservation of irreplaceable natural resources C obtaining the maximum output from available resources D considerations of equity in the distribution of wealth O E the limited wants-unlimited resources dilemma QUESTION 8 When the economist says that material wants are insatiable, he means that O A the structure of consumer wants is highly unpredictable B the structure of consumer demand varies from time to time and from country to country O C these wants are virtually unlimited and therefore incapable of complete satisfaction OD economic resources-land, labor, capital, and entrepreneurial abilityare scarce E economic resources are valuable only because they can be used to produce consumer goods. QUESTIONS The money payments made to owners of land, labor, captal and entrepreneurial ability are OA rent, wages, profit, and interest respectively B. rent, wages, interest, and profits respectively C rent, profits, wages, and interest \'espectively D rent, wages, dividends, and interest respectively E interest, wages. rent and profits respectively

Solution

Q5 A. if we had limited wants then limited resources have done well. So there would not be any problem of economizing and deciding how to make best use of resources.So, this optin is wrong.

B. This option says unlimited resources are required to satisfy limited wants. Again if our wants had had been limited and resources unlimited then there will not be any problem of economizing. So, this option is also incorrect.

C.This option says limited resources to satisfy virtually unlimited wants. This is true, as the problem of deciding what to produce or use arises only when the resources are limited and wants are unlimited.This causes the probem of choosing best out of everything. This option is correct.

D. This option says virtually unlimited resources to satisfy virually unlimited wants. If wants and resources both are unlimited then there is no problem of choice and decision. So his option is also inncorrect.

Q6 A. This option says that economy\'s capacity to produce increases in proportion to population size. This option is incorrect. As when population increases, labour force increases. But this does not guarantees increase in production,as some of labour may not be efficient, some may not get employed and some may not be productive.

B This option says that if resources of the economy are in use, more of one good can be produced only if less of another good is produced. the basic principle of PPC is based on the scarcity. So this option fits in the scarcity principle that all goods cannot be produced by using all resources which are limited for either of one product.

C.This option says that an economy will seek that level of output at which all of its reources are employed automatically. But this is also not true as resources will fully employed or not is the sole wish of the producer. Economy can\'t get to fully employed economy by its own.

D. This option says that the production of more of one good can be done over one week if we sacrifice the other good. This is true that as more and more of one good we sacrifice to increase the production of another good then its productivity decreases. But we can\'t assign a time period for this activity. So this statement is also false.

Q7 A. This option says that economic efficiency is concerned with the differnt institutions fostered by various items. But efficincy simply means taking maximum out of the available things. so if too many items are produced then this does not show efficiency as many items may not be useful for people. So this is incorrect.

B. This option says that economic efficiency is concerned with the conservation of irreplaceable natural resources. But this simply means environment protection whicch is a differnet subject. So this is also incorrect.

C. This options says that economic efficiency is concerned with obtaining maximum output from available resources. As we have discussed earlier that efficieny means taking maximum benefit out of acailable resources. So this is correct option.

D. This option says considerations of equity in distribution of wealth. This deals with economic equality not with economic efficiency. This option is also incorrect.

E.This option discusses limited wants and unlimited resources dilemma. which is the wrong dilemma as the correct one is Limited resources and unlimited wants.So this option is wrong.

Q8. A. This point says that structure of consumer wants are unpredictable. This is true but this does not mean the wants are insatiable, as once the structure is predicted the demand can be fulfilled.So this is also incorrect.

B. This option says that structure of wants varies form time to time and country to country, this repeats the previous option in different way, So this is also incorrect.

C. This option says that wants are virtually unlimited and are impossible for complete satisfaction. This is correct as wants are unlimited that is the reason economist call them insatiable.

D.This option says that economic resources are scarce. This is also true as if resources were unlimited then we would not have to make choice and all our wants could be satisfied.

E. This options says that economic resources are valuable only when they produce consumer goods. But this is not true as economic resources are equally valuable when they produce security goods, producer goods,etc.So this option is also incorrect.

Q9 Here, Land owners (Building Owners) will receive rent

Labour receives wages

Capital(Loan from bank) receives interest

Enterpreneur( Shareholders) receives Profit

So only option B is correct and all other options are incorrect.

Hope This Helps.

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