MCQ Bank

Adam Smith provided early utilitarian arguments for capitalism by demonstrating how the invisible hand of the free market promotes the greatest good and overall wealth for society. His economic principles laid foundational groundwork for later formal utilitarian ethical theories.

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Q81

Who has stated the principle of comparative advantage?

A) Eli Heckscher
B) Bertil Ohlin
C) Adam Smith
D) David Ricardo

AI Explanation

David Ricardo formally proposed and developed the principle of comparative advantage in his 1817 book 'Principles of Political Economy and Taxation'. He demonstrated that nations can mutually benefit from international trade even if one has an absolute disadvantage in producing all goods.

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Q82

Which of the following refers to the ability of a person or a country to produce a particular good at a lower opportunity cost than another country?

A) Resource efficiency
B) Absolute advantage
C) Comparative advantage
D) Natural advantage

AI Explanation

Comparative advantage is defined as the economic ability of a person or country to produce a specific good at a lower opportunity cost compared to competitors. It forms the core theoretical basis for gains from international trade.

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Q83

Companies can decide what to produce and which markets to compete in. This refers to which of the following feature of market economy?

A) Price flexibility
B) Free enterprise
C) Price discrimination
D) Free choice

AI Explanation

Free enterprise is the market feature that allows private businesses the freedom to decide what products or services to produce and which markets to compete in without excessive government control.

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Q84

Which of the following is not a feature of market economy?

A) Free capital
B) Price flexibility
C) Free enterprise
D) Free choice

AI Explanation

Price flexibility, free enterprise, and free choice are the recognized core features of a market economy. 'Free capital' is not listed among the standard defining features of a market economy in this context.

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Q85

In which Year Township and village enterprises (TVEs) legalized?

A) 1994
B) 2004
C) 1984
D) 1974

AI Explanation

Township and village enterprises (TVEs) in China were officially legalized in 1984, which allowed them to leverage market forces and private distribution channels to spur economic expansion.

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Q86

Maldem Mill’s decision to remain in the community and help for his workers by continuing to pay them after the fire is an example of which ethical theory?

A) Distributive justice
B) The ethics of care
C) Compensatory justice
D) Communitarian ethics

AI Explanation

The ethics of care highlights the importance of maintaining relational ties, showing compassion, and supporting individuals with whom we share close connections, such as workers during a crisis. Malden Mills' decision to keep paying employees after the fire exemplifies this duty of care.

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Q87

Economic system in which land, factories, and other economic resources are more equally split between private and government ownership is known as?

A) Mixed Economy
B) Free Economy
C) Liberal economy
D) None of the above

AI Explanation

A mixed economy balances private enterprise with government ownership and intervention, splitting economic resources between private and public sectors.

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Q88

In a command economy, all decisions are taken by the:

A) Voters
B) Workers
C) People
D) Government

AI Explanation

In a command economy, central planning authorities or the government make all major decisions regarding production, distribution, and allocation of resources.

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Q89

John Maynard Keynes arguments were the most influential in economics, when they become less convincing?

A) 1990
B) 1960
C) 1970
D) 1980

AI Explanation

Keynesian economic policies lost their dominance and became less convincing during the stagflation crisis of the 1970s, characterized by simultaneous high inflation and high unemployment.

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Q90

In the recent times, Korea has developed the vehicle manufacturing capability that is best in the world. What type of country specific advantage it is as classified by Adam Smith?

A) Absolute advantage
B) None of the given options
C) Acquired advantage
D) Natural advantage

AI Explanation

Adam Smith classified country advantages as either natural or acquired. Since vehicle manufacturing capability is an acquired advantage and that specific term is absent from the correct positioning or options, none of the given choices properly matches.

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Q91

Which of the following is/are classification of countries with respect to economy?

A) All of the given options
B) Mostly unfree
C) Free
D) Mostly free

AI Explanation

Economic freedom indexes classify countries into multiple categories such as Free, Mostly Free, and Mostly Unfree. Thus, all listed choices represent valid economic status classifications.

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Q92

Which one of the following is not considered as a moral standard?

A) Undistribute benefits and burdens
B) Respect moral rights
C) Exercise caring
D) Maximize social utility

AI Explanation

Moral standards focus on the fair distribution of benefits and burdens, whereas 'undistribute' denotes a failure to distribute them. Standard moral frameworks encompass respecting moral rights, maximizing utility, and exercising caring.

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Q93

Survival of the best is school of thought known as?

A) None of the above
B) Social equity
C) Social Darwinism
D) Social Justice

AI Explanation

Social Darwinism is the ideological perspective that applies evolutionary concepts like 'survival of the fittest' to human societies and economic competition. It erroneously frames natural selection as a measure of human societal worth.

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Q94

Which of the following is/are determining factors of economy?

A) Wage and price levels
B) Banking and financial activities
C) All of the given options
D) Property rights

AI Explanation

Macroeconomic systems are evaluated using various determining factors, including wage and price levels, banking and financial activities, and property rights. Together, these indicators shape the overall economic framework and health of a nation.

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Q95

India requires 50 labor hours to produce textile and 100 hours to produce books. Nepal requires 200 labor hours to produce textile and 200 hours to produce books. Which of the following statements is true?

A) Nepal has an absolute advantage in the production of books
B) India has a comparative advantage in the production of textile
C) India should not produce books
D) Nepal has an absolute advantage in the production of both textile and books

AI Explanation

India's opportunity cost for producing textile is 0.5 books (50/100), whereas Nepal's is 1.0 book (200/200). Because India has a lower opportunity cost for textile, it holds a comparative advantage in its production.

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Q96

Survival of the fittest means:

A) Survival of the nature
B) Human progress
C) Survival of the best
D) Settlement of conflict

AI Explanation

In social Darwinism, the phrase 'survival of the fittest' is often misinterpreted as 'survival of the best,' assuming that whatever emerges naturally through competition is morally superior.

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Q97

Who is called the father of modern economics?

A) John Locke
B) Adam Smith
C) Karl Marx
D) John Maynard Keynes

AI Explanation

Adam Smith is widely recognized as the father of modern economics due to his seminal 1776 work 'The Wealth of Nations'. He established foundational principles such as the division of labor and the invisible hand.

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Q98

Accesses to particular resources, the availability of labor are indicators of?

A) None of the above
B) Technological advantage
C) Natural advantage
D) Acquired advantage

AI Explanation

Access to particular natural resources and geographical factors are indicators of natural advantages, while labor availability and skills are often classified as acquired or factor endowments. Since natural advantage is not correctly captured by the available choices or fits under natural resources, none of the given options is accurate.

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Q99

One country can produce a good more cheaply than another and it is then said to have an "absolute advantage" in producing that good. The cost differences may be based on differences of which of the following?

A) All of the given options
B) Climate
C) Labor cost
D) Skills

AI Explanation

Absolute cost differences between nations can stem from a wide range of factors, including climate, labor costs, skills, equipment, and natural resources. All these elements contribute to how efficiently a country can produce specific goods.