P-values are commonly used in science but some people find this concept intimidating. In this article, we are going to make this concept easy for everyone. We are not only going to define p-values but also **teach you how to interpret the results quickly**. Further, we have created the p-value calculator to make calculations easy for you.

If the H_{0} (null hypothesis) of a study question is valid, the P-value is the probability of finding the observed, or more extreme, results. The term ‘extreme’ and its concept depend on how the null hypothesis is being evaluated. When the P value is true, it is also defined in terms of rejecting H_{0}, but not a direct likelihood of this state.

What “extreme” actually means determines by the alternative hypothesis, it means the p-value will rely on the alternative hypothesis, which we stated as two-tailed, right-tailed, or left-tailed. In the below-mentioned formulae S represents test statistic (Z-Stat, t-Stat, Chi-Squared Stat, F-Stat), x represents the outcome value of test statistic, Pr (H_{0}) represents the probability of occurrence of an event, by assuming true H_{0}.

In two-tailed test, the p-value can be calculated by this equation

p-value = 2 * Pr(S ≤ -|x| | H_{0})

In right-tailed test, the p-value can be calculated by this equation

p-value = Pr(S ≥ x | H_{0})

In left-tailed test, the p-value can be calculated by this equation

p-value = Pr(S ≤ x | H_{0})

Let us explain these meanings since a picture is worth a thousand words. Here we use the fact that the likelihood for a given distribution can be conveniently expressed as the region under the density curve. Two different pictures are hereunder:

- For symmetric distribution (Normal)
- For skewed distribution (not symmetric)

*Figure 1: Symmetric Case (normal distribution)*

*Figure 2: Skewed Distribution (not symmetric)*

In figure 2, the area left or not covered by left-tailed skewed distribution the p-value is equal to the area covered by the right-tailed p-value.

If you want to calculate the p-value from any test statistic, **it must be known to you which distribution is followed by the test statistic keeping the assumption that H _{0} is true. **Then

In two-tailed test the p-value can be found by this equation

p-value = 2 * min{cdf(x) , 1 – cdf(x)}

In right-tailed test the p-value can be found by this equation

p-value = 1 – cdf(x)

In left-tailed test the p-value can be found by this equation

p-value = cdf(x)

It is not possible to find the p-value manually because the CDF formulae of probability distributions, commonly used to test the hypothesis, are complicated. So, we need a computer or statistical table to find out the p-value of our test statistic.

Well, now you know how p-value can be measured, however… Why in the first place, do you need to quantify this number? We have two approaches to measure the stat statistic in hypothesis testing; one is the critical value approach while the other is the p-value approach. Both are alternatives to each other. Keep in mind that in later one, researchers pre-set α (level of significance) which shows the probability for rejection of H0 when it is true referred to as type 1 error.

Without having the p-value we are unable to decide either to reject the H0 or not. But when you have it you just need to compare it with each given α. For understanding must read the below section “how to interpret p-value.”

By using p-value, you will have two choices:

- A small p-value (provide proof against the rejection of the null hypothesis), tells us that data is not compatible with the null hypothesis.
- A high p-value (provide proof in favor of null hypothesis), tells us means that that data is compatible with the null hypothesis.

Your sample may lead to making a wrong decision concerning the null hypothesis because of its unusualness. For example, you have studied the effect of the COVID-19 vaccine and get the p-value as 0.07. It means random chance is still able to produce the test statistic, we received, or a value much more extreme, in 7 percent of related trials, even though the drug did not affect at all.

The shortest and best possible answer to the query **“what is p-value”** is answered as **“the smallest level of significance at which the null hypothesis would be rejected.”** If you want to take a decision against H0, you have to compare the p-value with α.

- If p-value ≥ α, then you have to accept the H
_{0}which means you**have lack of evidence to reject**the H_{0}. - If p-value ≤ α, then you
**reject**the H_{0}and accept the H_{1}.

Keep in mind that you have some expertise in the subject area and are well known to the reasons why you are going to apply any statistical technique. Otherwise, you will easily land with a statistically significant but wrong decision.

The p-value is defined in the bracket of 0 and 1. The smaller p-value provides strong evidence to reject the null hypothesis while the higher p-value provides the base to accept the alternative hypothesis.

- A p-value less than 0.05 or 5 % (commonly ≤ 0.05) is considered enough for statistical significance. It provides strong evidence to reject the null hypothesis as there are less than 5 % chances that the alternative hypothesis is correct. So when it is less than 0.05 we reject the null hypothesis and accept the alternative hypothesis. However, in this case, 95% probability is in favor of acceptance of alternative hypothesis but keep in mind it does not decide whether the research is true or false but it has an only concern with the hypothesis which you are testing.
- A p-value less than 0.05 or 5 % (commonly > 0.05) considered as not enough for statistical significance. It provides strong evidence to accept the null hypothesis as there are more than 5 % chances that the null hypothesis is correct. So when it is greater than 0.05 we reject the alternative hypothesis and accept the null hypothesis.

You need not worry about how to estimate the p-value from any test statistics, our calculator is made to give you a p-value against any test statistic and to avoid any complicated calculations. Follow the following steps to get the desired results.

- Select the right-tailed, left-tailed, or two-tailed option from the “what do you want” tab. It is dependent on your alternative hypothesis.
- Select the test statistic distribution (normal distribution, t-Student, chi-squared, or F-stat) from the “what do you have” tab. If you are not sure about the distribution of test statistics read the remaining part of this article as we explained it.
- Select the degree of freedom in case of other distributions except for normal distribution.
- Put the already calculated test statistic from your data.
- By default we set the calculator at a 0.05 level of significance you can change it as per your requirements.
- Our calculator gives you results against your information inserted into it.
- If you want to increase the precision use the advanced mode of the p-value calculator.

In the below sections we are going to solve this problem and briefly explain how to find the **p-value from z-score, p-value from t-score, p-value from the chi-squared score, and p-value from f-score.**

p-value Calculator

If your test score follows the N (0,1), standard normal distribution, you should have to select the z-score option. If your sample size is more than 50 consider that your data is following a normal distribution.

You can find the p-value from Z-score by using CDF (cumulative distribution function) which is commonly denoted by Φ by undernoted formulae.

T-score option can choose if the test statistic follows the t-student distribution. The t-student distribution has almost the same shape as the normal distribution but it has heavier tails that are dependent upon the degree of freedom. It is practically indifferent between a normal distribution and t-student distribution when the sample size increased from 30.

P-value from t-score can be found by using the under mentioned formulae where represents the cumulative distribution function for t-student distribution and d represents the degree of freedom.

The t-score is mostly used to **test paired samples (before-after scenario), the difference between two population means, and for population means (in both cases of unknown and known population standard deviation). **

When test statistic follows the **χ²-distribution **then chooses **χ²-sco**re option in the calculator. When the sum of the square of variables follows the normal distribution then this distribution arises. Do not forget to insert the degree of freedom of χ²-distribution.

You can find the p-value from the chi-square score by using undernoted formulae wherein the represents the CDF of χ²-distribution and d denotes the degree of freedom.

The χ²-score used in the popular tests of goodness of fit (right-tailed test) having the degree of freedom k-1, the variance of data following normal distribution (one or two-tailed test) having a degree of freedom n-1, and independence test. (Right tailed test) having a degree of freedom (r-1) (c-1).

When the test statistic follows **F-distribution** then you should F-score option of our calculator. The shape of F-distribution is dependent upon **two degrees of freedom.**

The degree of freedom of F-distribution is a ratio of two degrees of freedom as f-score is the ratio of two independent variables following chi-square distribution with two degrees of freedom (one for each) termed as d_{1}, d_{2}.

We can measure the p-value from F-score by using the under mentioned formulae where represent the cumulative distribution function of F-distribution and (d1, d2) represents the degree of freedom.

The f-score used in the popular tests of overall significance of regression analysis and ANOVA with (k-1, n-k) degree of freedom, equality of variances in two N(0,1) populations with ( ) degree of freedom and comparison of two nested regression models with degrees of freedom. It is worth noted that all of these tests are right-tailed.

The f-score used in the popular tests of the overall significance of regression analysis and ANOVA with degree of freedom, equality of variances in two N(0,1) populations with ( ) degree of freedom and comparison of two nested regression models with degrees of freedom. It is worth noted that all of these tests are right-tailed.

]]>There are two ways to assess in hypothesis testing whether there is enough data from the study to reject H_{0} or to accept H_{0}. Comparing the p-value with a pre-specified value of alpha (α) is the most common way, where alpha (α) is the probability/likelihood of rejecting H_{0} when H_{0} is valid/true. However, the estimated value of a test statistic can also be contrasted with the critical value. In this article, we are going to discuss the way of critical value.

A critical value is a representative line against some mathematical value on a chart that separates the chart into sections. The “rejection region” is one or two of the sections; if the value of any test falls within that region so we reject the null hypothesis.

A critical value shows a point on any test distribution against test statistics on the basis of we decide whether to reject or accept the null hypothesis. You can assert statistical significance and deny the null hypothesis if the absolute value of our test statistics is higher than the critical value.

The approach to critical value consists of testing whether the value of the test statistics produced by our sample belongs to the so-called rejection region or a critical region, which is the region where it is highly unlikely that the test statistics will lie. A critical value is a cut-off in a one-tailed analysis/test or two cut-offs in the case or two-tailed analysis/test which represents the boundary of the rejection region(s). Critical values, in other words, divide the size of the test statistics into the area of rejection and non-rejection region.

Before running to the estimation of test statistics and finding critical value, we first need to understand the assumption of our concerned test statistics as well as assumptions that our null hypothesis holds. The test statistics and critical values both have the same probabilities which are equal to the significance level α. For certain critical values, these values are believed to be at least as extreme.

What “at least as extreme” implies is decided by the alternative hypothesis. Critical values are either a single value or two values, single in the case of a one-tailed test while two in the case of two-tailed tests. In the one-tailed test, the critical value is either on the left or right side of the median of the distribution while in two-tailed tests it will be on both sides of the median of the distribution i.e. left and right.

Critical values can easily be indentified in any distribution as the area under the density curve from critical to lower end which is equal to α:

- Right-tailed test: the area from critical value to the right end under the density curve is equal to α:
- Left-tailed test: the area from critical value to left end under the density curve is equal to α:
- Two-tailed test: the area from critical value to both ends under the density curve is equal to α:

Quantile function Q is the inverse function of distribution function (CDF) in any test statistic distribution and used in formulae of critical values. The formula is hereunder

Q = cdf-1

The critical value formulae are hereunder after selecting the value of α

**two-tailed test**: (-∞, Q(α/2)] ∪ [Q(1 – α/2), ∞)**right-tailed test**: [Q(1 – α), ∞)**left-tailed test**: (-∞, Q(α)]

When the concerned **distribution **is** symmetric about 0**, the two-tailed test’s critical values are symmetric as well:

Q(1 – α/2) = -Q(α/2)

Unfortunately, there are rather complex CDF formulas in the probability distributions that are the most popular in hypothesis testing. We’d need to use advanced tools or mathematical tables to find critical values by hand. In these cases, our critical value calculator is, of course, the best alternative.

Our critical value calculator facilitates you to find critical value for complicated distributions, so you no longer need to worry about it. You need to follow undernoted steps.

- You need to let us know about the test statistic distribution for your null hypothesis. Is it a regular normal N(0,1), or t-Student, and either chi-squared or F-distribution? If you are not able to tell us then read this full post to understand which test you have required for testing the null hypothesis.
- Finalize your alternative hypothesis (in most of the cases it is opposite to the null hypothesis i.e. greater than, less than, etc. then population mean in one-tailed tests while it has two options in two-tailed tests i.e. yes or no which means it is either greater or lower than population mean): right-tailed, left-tailed, or two-tailed,
- If required, define the degree of freedom distributed by the test statistics. Check the definition of the test you are conducting if you are not sure.
- Set the level of significance (α), mostly in hypothesis testing it is selected at 5% (0.05) but we can adjust it as per our need.
- The critical value(s) as well as the rejection region(s) will then be shown by the critical value calculator.

Advance mode option of this critical value calculator will facilitate you with more accurate results.

Critical Value Calculator

If our test statistics follow (at least approximately) the Standard Normal N(0,1) distribution, we use the Z (standard normal) choice.

μ denotes the quantile function of the regular normal distribution N(0,1) in the formulation below:

- two-tailed Z critical value: ± μ (1 – α/2)
- right-tailed Z critical value: μ (1 – α)
- left-tailed Z critical value: μ (α)

t-student distribution can be followed when our test statistic follows the t-Student distribution. This distribution is almost the same as the standard normal distribution but it has fatter tails, which depends on the degree of freedom. If the sample size is large (> 30), then it difficult to differentiate between a standard normal distribution and t-student distribution.

Q_{t,d }(Q_{t, }and _{d}), Q_{t} is representing the t-Student distribution’s quantile function while _{d} represent degrees of freedom in the formula below:

- two-tailed t critical values: ±Q
_{t,d}(1 – α/2) - right-tailed t critical value: Q
_{t,d}(1 – α) - left-tailed t critical value: Q
_{t,d}(α)

χ² (chi-square) critical values will be used when our test statistics follow χ² (chi-square) distribution. For the most widely used χ^{2} tests, we need to calculate the number of degrees of freedom for the χ2-distribution of our test statistics.

The formulae for chi-square critical values are given here; Q_{χ2},_{d} is the quantile χ^{2} distribution function with d degrees of freedom:

- Two-tailed χ² critical values: Q
_{χ²,d}(α/2) and Q_{χ²,d}(1 – α/2) - Right-tailed χ² critical value: Q
_{χ²,d}(1 – α) - Left-tailed χ² critical value: Q
_{χ²,d}(α)

Lastly, F critical values will be used when our test statistics follow F-distribution. In this distribution degree of freedom is in a pair form.

Now we have to brief you on how these degrees of freedom emerge. Take an example that there are two variables X and Y both are independent random variables with d_{1} and d_{2} degree of freedom and are following χ2-distribution. If we consider the ratio as (X/d_{1})/(Y/d_{2}), it turns out that both degrees of freedom are following the F-distribution. That’s why we call d_{1} the degrees of freedom of numerator and d_{2} the degree of freedom of denominator, respectively.

QF represents the quantile function while d_{1} and d_{2} represent the degrees of freedom in the F-distribution and the formula is mentioned below:

- Two-tailed F critical values: Q
_{F,}d_{1},d_{2 }(α/2) and Q_{F,}d_{1},d_{2}(1 – α/2) - Right-tailed F critical value: Q
_{F,}d_{1},d_{2}(1 – α) - Left-tailed F critical value: Q
_{F,}d_{1},d_{2}(α)

We are enlisting the important tests in which a researcher uses F-stat. All of them are right-tailed.

ANOVA (Analysis of Variance): The ANOVA is used when more than two means have the same variations and following a normal distribution. There are degrees of freedom (k-1, n-k), where n is the sample size (in each group) and k is the number of groups.

- Regression analysis’s overall significance. It follows the same degree of freedom (k-1, n-k) but here k represents the no. of variables.
- Comparison of two nested models of regression. With k2-k1, n-k2 degree of freedom (where k1 represents the no. of variables in the smaller model while k2 represents the number of variables in the larger model and n represents the sample size) the test statistic follows the F-distribution.
- In two normally distributed populations, the equality of variances. There are (n-1, m-1) degrees of freedom in which both n and m represent corresponding sample sizes.

It is almost impossible to gather population data so the researchers gathered the information/data on a sample basis and to check the credibility, either the sample/collected data is the true representative of the population or not researchers do hypothesis testing. For hypothesis testing, critical values will use.

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What share of foreign trade is focused on absolute differences in production costs?

**Substantial**- All
- Nil
- Very little

The views of Adam Smith on world trade can be better understood if one treats them as an answer to

**Ricardo’s views on trade**- The mercantilist approach to trade
- The labor theory of value
- None of these

Developing countries usually complain of

- Severe obstacles in the way of promoting exports
- Detoriation in their terms of trade
- The ambiguity and insufficiency of government assistance
**All of these**

Which among the following is not an assumption of the classical-territory of comparative cost advantage?

**Production takes place under diminishing returns**- Labor is the only factor of production
- Prices are determined by their real labor costs of production
- There are no tariffs

Law of comparative costs is based on

- Opportunity cost theory
**Labor theory of value**- Law of diminishing returns
- None of these

The most important cause of disparities in relative commodity prices and trading between nations is the disparities in international trade, according to the Heckscher-Ohlin theory of international trade.

**Factor endowments**- Consumer tastes and preferences
- Demand conditions
- Knowledge and technology

The role of the foreign exchange market is that of

- Provisions of credit for financing foreign trade
- Transfer of purchasing power
- Furnishing facilities for hedging foreign exchange risks
**All of these**

The elasticity of the foreign exchange market for funding the outflow of capital is

- Greater than zero
**Zero**- Less than infinity
- One

Under the flexible system of exchange rates, the exchange rate is determined by the rate of exchange.

**In the foreign exchange sector, the demand and supply powers**- The central bank of the country
- The purchasing power of currencies
- Currencies’ buying power

The different (many) exchange rates were first used by

- Ecuador
- Brazil
- Peru
**Germany**

What does the current theory of international trade expect about the disparity in trade-related factor prices between countries?

**Diminishes**- Increases
- Either diminishes or increases
- Remains the same

In foreign exchange, the spot and forward markets are connected to each other through

- Speculation
- Hedging
- Interest arbitrage
**All of these**

The deficit gap in the balance of payments can be corrected by

- Monetary squeeze
- Exchange controls and import quotas
- Devaluation
**All of these**

If unity is the elasticity of international demand for the country’s exports, the foreign exchange supply curve will be

**Vertical**- Backward bending
- Horizontal
- Positively sloping from left to right

What of the following things are invisible in the balance of payments?

- Foreign investment
- Government expenditure abroad
- Goods exported
**Foreign travel**

What will be the effect on the status of the country’s balance of payments when inflationary pressures are used to minimize spending policies?

- Unfavorable
- Highly unfavorable
- Neutral
**Favorable**

Effects of devaluation of the currency by a nation

- Promotion of import substitution
- Expansion of the export trade
- Contraction of import trade
**All of these**

Dynamic variables in the field of the theory of international trade contribute to changes in

- Technical knowledge and methods of production
- Income
- Factor endowments
**All of these**

Of the following terms of exchange, one of which was adopted by F.V.Taussig?

**Commodity terms of trade**- Income terms of trade
- Double fact oral terms of trade
- Real cost terms of trade

Which of the following was not favored by the mercantilists?

**Free trade**- Accumulation of gold by the country
- Import restriction
- Export promotion

If the rise in exports exceeds the rise in imports and other factors remain the same, the expected change in the revenue ?

- Remain the same
**Rise**- Move in an uncertain manner
- Fall

The very short-term loan market is known as

**Money market**- Capital market
- Discount market
- Stock market

By that year, as an international monetary mechanism, the gold standard had almost vanished from the world.

**1936**- 1933
- 1945
- 1939

The “terms of trade” refer to

- Bilateral trade agreements
**Ratio of export prices to import prices**- One country’s comparative advantage over another in the production of a specific commodity
- Rates of exchange between two currencies

Identify the nation that first employed credit rationing as a credit control instrument.

- UK
- Germany
**France**- USA

The principal role of the criteria for legal cash reserves is to

**Influence on the deposit of demand generating capacity of commercial banks**- Ensure safety of deposits
- Keep a portion of deposits liquid
- Regulate the inter-sectoral flow of money supply

Commercial banks still have to face a dispute/conflict between

- Central bank and themselves
- Share holders and depositors
- Demand deposits and time deposits
**Liquidity and profitability**

From following is not an asset-side item on a commercial bank’s balance sheet?

- Money at call and short notice
- Investments
- Advances
**Reserves**

An instrument to control quantitative credit?

- Prescribing margin requirements
- Credit rationing
- Consumer credit regulation
**Variable reserve ratio**

Identify one of the instrument of qualitative credit control.

- Bank rate
**Credit rationing**- Minimum statutory cash reserves ratio
- Open market operations

In a bimetallic standard

- As an unrestricted legal tender, gold and silver coins circulate.
- The coinage and the exports and imports of both metals are free of charge.
- Two metals are monetized concurrently (usually gold and silver) and their monetary values are set as legal tender values.
**All of these**

Selective credit management equipment is used by a country’s central bank to

- Regulate credit-creation on the part of some selected banks
- Regulate the economy’s amount of aggregate bank credit
- Selectively allocate credit among banks
**Manage the flow of aggregate bank loans to various productive activities in the economy**

The immediate result of banks creating credit is

**Increase in money supply**- Rise in prices
- Reduction of poverty
- Increase in real national income

The bank rate refers to the interest rate at which

**Central bank gives loans to commercial banks**- Commercial banks receive deposits from the public
- Commercial banks grant loans to their customers
- Government loans are floated

OMO (Open market operations) refer to the buying and selling of

- Foreign exchange
- Commercial bills
**Government securities**- Gold

If the demand for loans declines substantially, banks will be forced to

**Adjust their portfolios**- Sell securities to the public
- Increase liquidity
- Resort to creating credit

Which one will decrease the lending ability of commercial banks?

**Sale of securities in the open market by the central bank**- Reduction in the discount rate
- The Central Bank’s buying of securities on the free market
- Reduction of the cash reserves ratio required

Which of the following is not a part of the un-organized Pakistani money market?

**Co-operative credit societies**- Indigenous bankers
- Moneylenders
- Chit funds

The instrument of minimum legal cash reserves ratio for banks was first implemented in which country?

- UK
**USA**- Japan
- Germany

A variation of the community banking system, the chain banking system emerged in the mid-nineteenth century and reached the peak of popularity in the present century.

- UK
**USA**- Italy
- Germany

In the majority of countries in the world, the branch banking method is currently in vogue. Identify the nation where it first emerged

**UK**- South Africa
- Australia
- Canada

Each individual bank is a separate entity, with its own independent management and board of directors, under the unit banking structure. What country is commonly considered to be the home of the system of unit banking?

- Germany
**USA**- Japan
- France

Which is not a feature of a country’s central bank?

- Controller of credit
- Lender of the last resort
**Supervisor of nation’s fiscal policy**- Custodian of nation’s foreign exchange reserves

What’s not a risk for a commercial bank?

- Time deposits
- Demand deposits
**Security holdings**- Advances from the central bank

Which of the following is not a commercial bank function?

- Granting loans and advances
- Accepting public deposits
**Banker to the Government**- Undertaking agency functions

The reduction or removal of inflation is referred to as

- Deflation
**Disinflation**- Stagflation
- Creeping inflation

Originally in 1931, the first description of stagflation was presented by

- J.M. Keynes
**Friedrich A. von Hayek**- Milton Friedman
- Bent Hansen

Stagflation applies to a scenario that is characterized by

- Inflation and deflation
- Deflation and rising unemployment
- Stagnant employment and deflation
**Sustained price-rise and rising unemployment**

Astronomical increases in prices occur during the time of hyper-inflation and, as a result, money becomes almost worthless. In Germany in 1923 and in China in 1923, such a condition was seen in

**1949**- 1947
- 1953
- 1951

Which of the following steps are helpful for inflation control?

- Price control and rationing of essential goods
- Reduction of government expenditure
- Raising the bank rate
**All of these**

The demand for money primarily depends upon, keeping in view of Classical approach

**Economic transactions**- Rate of interest
- Precautionary motive
- Speculative activity

In what capacity does a person stand to benefit from deflation?

- As a debtor
**As a pensioner**- As an equity-holder
- As an entrepreneur

The trap state of liquidity (liquidity trap) exists at

**Very low rate of interest**- Low rate of interest
- Very high rate of interest
- High rate of interest

The interest elasticity of the speculative market for capital is at a very low rate of interest becomes

- High
- Low
**Infinite**- Very high

Which one is not a monetary policy instrument?

- Bank rate
**Taxation**- Credit rationing
- Open-market operations

A retail price index measure changes in

- General purchasing power of money
**Consumers’ cost of living**- Patterns of consumer expenditure
- Average standard of living

Under the conditions of the liquidity trap, the degree of elasticity with respect to speculative demand for money is

- One
- Zero
**Infinite**- Greater than one

The relationship between the interest rate on the market and the price of a bond on the market is

- Direct
**Inverse**- Uncertain
- Positive and proportionate

The approach of money transactions to the quantity theory of money is generally linked with the name of

**Irving Fisher**- Alfred Marshall
- D.H. Robertson
- J.M. Keynes

Great Economists and their Works

Which of the following according to Milton Friedman is not a key determinant of the demand for money?

**Precautionary motive**- Aggregate wealth
- Physical non-human capital goods and human capital or wealth
- Relative rates of return obtainable on different forms of assets

Who introduced the concept of the real balance effect?

- Alfred Marshall
**A.C. Pigou**- Milton Friedman
- J.M. Keynes

Cost-push inflation is caused by

- Increase in investment
- Increase in the quantity money of
**Increase in the prices of inputs**- Creation of credit money

In the Fisher’s equation of exchange MY=PT, what does T denote?

**Volume of trade**- Period of time
- Trend value of general price level
- Total money wealth

Identify Pigou’s cash balances equation

- M=KPO
**M=KR/P**- M=Ky+K’A
- M=PKT

Who Quantity Theory of Money establishes the relationship between the quantity of money in an economy and the level of

**Price**- Employment
- Savings
- National income

Who is generally regarded as the founder of the Modem Quantity Theory of Money?

**Milton Friedman**- J.M. Keynes
- Don Patinkin
- M.I. Bursten

When did the UK finally abandon the gold standard?

- 1929
- 1925
- 1936
**1931**

During which decade of the nineteenth century, did most European countries adopt the gold standard?

- Seventies
- Sixties
- Nineties
**Eighties**

Identify the country which was the first to adopt the gold standard

- France
**UK**- USA
- Germany

Bad money pushes out the circulation of good money. Whose name connects this law with?

**Thomas Gresham**.- J.M. Keynes
- R.G. Hawtrey
- L.B. Mises

Which function of money was emphasized more in the Keynesian theory as opposed to the classical theory?

- Medium of exchange
- Unit of account
**Store of value**- Standard of deferred payments

The small legal-tender cash stands for the money portion that

**Is legal tender for payment up to a certain maximum amount**- Is issued in a limited amount
- Is to be used in specific transactions
- Is legal tender in specified areas

If the value of money as a commodity and its value as money are equivalent, it is called

**Full-bodied money**- Token money
- Fiat money
- Quasi-money

An example of quasi-money or near money?

- Cheque .
**Bills of exchange**- Coins
- Bank notes

Fiat money refers to:

**Legal money**- Credit money
- International Money
- Full-bodied money

Money has been defined as “that by delivery of which debt contracts and price contracts are discharged, and in the shape of which general purchasing power is held.” Whose definition is

- D.H. Robertson
- G. Crowther
- George N. Halm
**J.M. Keynes**

Which of the following is not a function of money?

- Unit of account
- Medium of exchange
**Stabilization of price level**- Standard of deferred payments

In the “gold certificates” that circulated in the U.S.A. before being removed from circulation in the United States, the best example of representative full-bodied cash is found.

- 1927
- 1925
**1933**- 1929

Which approach to the concept of money offers the widest view of money possible?

- Conventional approach
**Central bank approach**- Gurley Shaw approach
- Chicago approach

- Scarcity of resources
- Unlimited wants
- Alternative uses of scarce resources
**Use of money**

Which is not a core economic problem?

- How to produce
**How to maximize private profit**- What to produce
- For whom to produce

Who described economics as a science that studies human actions as a relationship between alternate uses of ends and means?

- Alfred Marshall
**L. Robbins**- Paul A. Samuelson
- Joan Robinson

A mixed economy is characterized by the co-existence of:

**Public and private sectors**- Modem and traditional industries
- Commercial and subsistence farming
- Foreign and domestic investments

Which is not an essential feature of a socialist economy?

**Freedom of enterprise**- Social ownership of the means of production
- Government decisions
- Use of centralized planning

Which of the following is incorrect?

- Normative Economics studies how to solve the economic challenges facing society.
**A market necessarily refers to a meeting place between buyers and sellers**- A function demonstrates the association between two or more variables
- Equilibrium refers to the market conditions which once achieved, tend to persist

Microeconomics deals with the:

- Determination of prices of goods and services
- Behavior of industrial decision makers
- Allocation of resources of the economy as between production of different goods and services
**All of the above**

Which of the following is Microeconomics concerned with?

- The size of national output
- Changes in the general level of prices
- The level of employment
**None of the above**

Formulation of an economic theory involves:

- Testing the hypothesis against empirical evidence
- Logical deductions from the assumptions made
- Statement of various assumptions or postulates
**All of the above**

An economic theory is:

- A hypothesis
- An axiom
**A tested hypothesis**- A proposition

Identify the aspect of taxation which is related to normative economics:

**Equity of tax**- Incidence of tax
- Effect of tax on the capacity willingness to work
- None of the above

Contraction of demand is the result of

**Increase in the price commodity concerned**- Decrease in the number of consumers
- Decrease in the income purchasers
- Increase in the prices of other goods

All but one of the following presumed that when drawing the demand curve of a person for a product, they stayed the same. What it is.

- His monetary income
- The preferences of the individual
- The prices of other goods
**The price of the commodity under consideration**

An example of substitutes is which of the following pairs of commodities?

- Pen and ink
- Tea and sugar
- Shirt and trousers
**Tea and coffee**

The price elasticity of demand at the mid-point of the line will be in the case of a straight-line demand curve meeting the two axes

- 1.5
- 0
**1**- 2

Assuming other items remain unchanged, the Law of Demand defines the relationship between

**The price of a commodity and the quantity demanded**- The income of the consumer and the quantity of a commodity demanded by him
- Quantity demanded of a commodity and the relative prices of its complementary goads
- Price of a commodity and the demand for its substitute

Demand for a commodity refers to a:

**Quantity of the commodity demanded at a certain price during any particular period of time**- Need for the commodity
- Desire for the commodity
- Quantity demanded of that commodity

Identify the factor that typically maintains a low price-elasticity of demand for a product

**lts low price**- Variety of uses for that commodity
- High proportion of the consumer’s income spent on it
- Close substitutes for that commodity

If the demanded quantity of a good remains constant regardless of changes in its price, then the demand curve for the commodity will be

- Positively sloped
- Horizontal
**Vertical**- Negatively sloped

In the case of a Giffen product, the curve of demand will be

- Horizontal
- Downward-sloping to the right
- Upward sloping to the right
**Backward falling to the left**

Identify the demand price elasticity coefficient when the percentage increase in the quantity of a demanded commodity is smaller than the percentage decrease in its price

- Greater than one
- Equal to one
- Zero
**Smaller than one**

The income elasticity of demand in case of inferior good

- Zero
- Positive
- Infinite
**Negative**

In respect of which of the following category of goods is consumer’s surplus highest?

**Necessities**- Giffen goods
- Prestige goods
- Luxuries

Total utility is maximum when

- Marginal utility is at its highest point
**Marginal utility is zero**- Average utility is maximum
- Marginal utility is equal to average

If the demand for a commodity is inelastic, an increase in its price will cause the total expenditure of the consumers of the commodity to

**Increase**- Remain the same
- Decrease
- Any of the above

The budget-line is also known as the

- Production possibility line
- Iso-utility curve
**Consumption possibility line**- Isoquant

Which one is not an assumption of the theory of demand based on analysis of indifference curves?

- Diminishing marginal rate of substitution
- Provided the scale of preferences between the two goods’ distinct combinations
- Consumers will often choose more to less of a specific product, other items staying the same
**Constant marginal utility of money**

The elasticity of substitution between two perfect substitutions is

- Greater than zero
- Zero
**Infinity**- Less than infinity

The consumer is in equilibrium at a point where the budget line:

- Is below an indifference curve
- Is above an indifference curve
- Cuts an indifference curve
**Is tangent to an indifference curve**

An indifference curve slopes down towards right since more of one commodity and less of another result in

- Maximum satisfaction
**Same satisfaction**- Greater satisfaction
- Decreasing expenditure

The Revealed Preference Theory deduces the inverse relationship between price and quantity from

- Assumption of indifference
**Observed behavior of the consumer**- Postulate of utility maximization
- Introspection

Which of the following statements is incorrect?

**The elasticity of substitution between two goods to a consumer is zero**- An indifference curve must be downward sloping to the right
- The total effect of a change in the price of a good on its quantity demanded is called the price effect
- Convexity of a curve implies that the slope of the curve diminishes as one move from left to right

Production is a function of:

- Costs
- Inputs
**Profits**- Price

An Iso-product curve slopes

- Upward to the right
**Downward to the right**- Upward to the left
- Downward to the left

Which cost increases continuously with the increase in production?

- Fixed cost
- Marginal cost
**Variable cost**- Average cost

What one of the cost curves below is never Un-shaped?

- Marginal cost curve
- Average cost curve
**Average fixed cost curve**- Average variable cost curve

Complete/Total costs are divided into fixed costs and variable costs in the short-term. What variable cost is one of the following?

- Interest payment on past borrowing
**Cost of raw materials**- Cost of equipment
- Payment of rent on buildings

In the short term, the total fixed cost rises as a company’s production

**Decrease**- Increase
- First declines and then rises
- Remains constant

A significant characteristic of the production function of Cobb Douglas is that the elasticity of substitution between inputs is

- More than unity
**Equal to unity**- Zero
- Less than unity

A vertical supply curve that is parallel to the price axis indicates that supply elasticity is

- Infinity
**Zero**- Greater than zero but less than infinity
- Equal to one

The supply of a commodity refers to

- The total existing stock of the commodity
- Actual production of the commodity
**Amount of the commodity offered for sale at a particular price per unit of time**- Stock available for sale

The production techniques are technically efficient:

- Above the upper ridge line
- Below the lower ridge line
- On the upper ridge line
**Between the two ridge lines**

Which of the following is not a feature of Iso-product curves? lso-product curves

- Show different input combination producing the same output
- Are downward sloping to the right.
- Are convex to the origin
**Intersect each other**

Some economists refer to iso-product curves as

**Production indifference curve**- Engels curve
- Ridge line
- Budget line

Which one of the following is also known as plant curves?

- Long-run average cost (LAC) curves
- Average total cost (ATC) curves
**Short-run average cost (SAC) curves**- Average variable cost (AVC) curves

What is the shape of the average fixed cost (AFC) curve?

- Horizontal up to a point and then rising
- U-shape
**Rectangular hyperbola**- Sloping down towards the right

An increase in the supply of a commodity is caused by:

- Fall in the prices of other commodities
- Fall in the prices of factors of production
- Improvements in its technology
**All of the above**

Supply elasticity refers to the degree of responsiveness of a commodity’s supply to changes in its

- Costs of production
- Demand
**Price**- State of technology

In terms of the alternative given up, the cost of one item is known as

- Real cost
- Production cost
**Opportunity cost**- Physical cost

According to current thinking, the law diminishing returns applies to

- Agriculture
**All fields of production**- Manufacturing
- Mining

Identify the correct statement

**Scale economies exist only when the factors of production are indivisible.**- When the marginal product is equal to the average product, the average product is at its peak.
- The production possibility curve and the transformation curve are different curves
- The law of increasing returns refers to the impact of changes in the proportions of factors

Which of the above is closely associated with the notion of marginal cost?

- Fixed cost
**Variable cost**- Explicit cost
- Implicit cost

According to M. Kalecki, the true measure of the degree of monopoly power is the

- Extent of monopolistic profit enjoyed by the monopolist
**Ratio between price and marginal cost**- Price charged by the monopolist minus marginal cost of production .
- Cross-elasticity of demand for the product of the monopolist

A monopolist is able to maximize his profit when

- He charges a high price
- His output is maximum
**His marginal revenue is equal to marginal cost**- His average cost is minimum

What of the above does not constitute a basic condition of pure competition?

- Homogeneous product
- Large number of buyers sellers
**Absence of transport cost**- Freedom of entry

What is the shape of the curve of demand faced by a firm in perfect competition?

- Vertical
**Horizontal**- Negatively sloped
- Positively sloped

First order condition for profit maximization of a firm?

**MC=MR**- AC=MR
- AC=AR
- MR=AR

In which form of the market structure in the degree of control over the price of its product by a firm very large?

- Imperfect competition
**Monopoly**- Perfect competition
- Oligopoly

What the another name of average revenue curve?

- Profit curve
- Average cost curve
- Indifference curve
**Demand curve**

In which market structure a firm is unable to control the price of its product?

**Perfect competition**- Monopoly
- Oligopoly
- Monopolistic competition

Which one of the following is the condition of equilibrium for the monopolist?

- MR=MC=Price
- MC=AR
**MR=MC**- AC=AR

The monopoly of discrimination means that the monopolist charges varying prices for his commodity

- For different uses
- At different places
- From different groups of consumers
**Any of the above**

Price discrimination can only be efficient if the elasticity of the indifferent demand markets from which the overall market has been divided is

**Different**- Uniform
- Zero
- Less

Which of the following oligopoly models is concerned with the maximization of joint profits?

- Bertrand’s model
- Price leadership model
- Edge worth’s model
**Collusive model**

In the sense of oligopoly, the Kinky demand curve hypothesis is intended to describe

**Price rigidity**- Price and output determination
- Collusion among rivals
- Price leadership

Which type of market structure is characterized by interdependence between the various competing firms in decision-making

- Perfect competition
- Imperfect competition
**Oligopoly**- None of the these

The situation of monopolistic competition is created by

- Imperfection of the market for that product
- Lack of homogeneity of the product produced by different firms
- Small number of producers of a commodity
**All of the these**

Which one of the following is not the assumption of the Marginal Productivity Theory of Distribution

- Perfect competition in the factor market
**All factors, except one, are variable**- Given stock of each factor and full employment
- Homogeneity of a factor

With which of the theories of wages is the name of John Stuart Mill associated

**Wages-fund theory**- Marginal productivity theory of wages
- Iron law of wages
- Subsistence theory of wages

Under monophony in the labor market, the supply curve of labor facing the firm will be

- Downward-sloping to the right
**Upward-sloping to the right**- Horizontal
- Backward-sloping to the left

Economic rent can accrue to

- Capital only
- Specialized technical personnel only
- Land only
**Any of the factors of production**

Which of the following statements is incorrect

- Rent is exclusively demand determined
- Quasi-rent is a purely short-term phenomenon
- Rent is the excess of actual earnings over transfer earnings
**Rent can accrue to land alone**

In the context of the firm as a whole, quasi-rent is defined as the excess of the total receipts over the total

- Average cost
- Fixed cost
**Variable cost**- Fixed and variable cost

A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as

**Quasi-rent**- Surplus value
- Super normal profit
- Transfer earnings

Which of the following factors forms the basis of the Loan able Funds Theory of Interest?

- Psychological factors
- Monetary factors
**Monetary and non-monetary factors**- Technical factors

Which of the following purposes normally does not give rise to the demand for loanable funds?

**Saving**- Consumption
- Hoarding
- Investment

On which of the following does the demand for money for speculative motive mainly depend?

- Profits
- Income
**Rate of interest**- General Price level

The demand for liquidity preference is governed by

- Speculative motives
- Precautionary motives
- Transaction motives
**All of the above**

Identify the neo-classical theory of the rate of interest

- Abstinence theory
- Time preference theory
**Loan able funds theory**- Liquidity-preference theory

The classical theory explained interest as a reward for:

- Abstinence
- Parting with liquidity
- Inconvenience
**Saving**

According to Joseph Schumpeter, profit is the reward for

- Uncertainty-bearing
**Innovation**- Management
- Risk-taking

The term normal profit as used in the analysis of equilibrium of the firm under perfect competition refers to

- Reward for enterprise
**Earnings of management**- The residual income of a business
- Reward for innovation

**1758**- 1766
- 1761
- 1763

Identify the author of “The Principles of Political Economy and Taxation”

- J.S. Mill
- Alfred Marshall
- A. Turgot
**David Ricardo**

Who is generally regarded as the founder of the Classical School”?

- T. R. Malthus
- David Ricardo
- J. S. Mill
**Adam Smith**

Identify the economist who had little formal schooling and began working in the money market at an early age of 14.

- Adam Smith
**David Ricardo**- A. A. Cournot
- V. F. D. Pareto

Who initially raised concerns of a food crisis in the world?

**T.R. Malthus**- David Ricardo
- J.B. Say
- J.S. Mill

When was the big work “An Enquiry into the Nature and Causes of Nations’ Riches” written by Adam Smith?

- 1766
- 1756
- 1786
**1776**

“The real price of everything, what everything really costs to the man who wants to require it, is the land trouble of acquiring it.” Who made this statement?

- Karl Marx
- David Ricardo
**Adam Smith**- J. S. Mill

“Rent is a creation of value, not of wealth.” Who made this observation?

- Alfred Marshall
- Adam Smith
**David Ricardo**- A.C. Pigou

Which year was Karl Marx’s first volume of Das Capital published?

- 1859
- 1848
- 1873
**1867**

“The labour of Nature is paid, not because she does much. But because

she does little. In proportion as she becomes niggardly in her gifts, she exacts a greater price for her work.” Who made this observation?

- T. R Malthus
**Lauderdale**- David Ricardo
- Adam Smith

The First Fruits of Karl Marx’s long and painstaking study at the British Museum appeared in The Critique of Political Economy

- 1857
**1859**- 1853
- 1855

The Communist Manifesto, published jointly by Marx and Engel’s was pub1ihsed in

- 1845
**1848**- 1859
- 1853

Who actually stated the law of comparative cost for the first time?

- Adam Smith
**David Ricardo**- Thomas Mun
- James Mill

Identify the school founded by Wilhelm Roscher

- Cambridge School
- Austrian School
**Historical School**- Mathematical School

One of the following economists do not belong to the Austrian School. Identify him

- F. Von Wieser
- Karl Monger
- E. von Bohm-Bawerk
**J.S. Mill**

Which one of the following theories of trade cycle was propounded by W.S. Jevons?

- Saving-Investment Theory
- Monetary Theory
**Sunspot Theory**- Innovation Theory

What was Frederic List Nationality?

- Finnish
- American
- British
**German**

“The Purchasing Power Parity Theory” rose to prominence in 1916 through the publications of

- L.E. von Miser
- J.M. Keynes
**Gustav Cassel**- F.A. von Hayek

The study of input-output is attributable to the origin and development to

- R.F. Harrod
**W.W. Leontief**- Alfred Marshall
- E.D. Domar

Who wrote “An Introduction to Positive Economics”?

- G. B. Richardson
- Paul A. Samuelson
**R.G. Lipsey**- W.J. Baumol

Identify the author of ”Mathematical Analysis for Economists”

**R.G.D Alien**- J.P. Lewis
- B.J. Cohen
- Russell Mathews

Which of the following is not correctly matched?

- D.H. Robertson: Essays in Monetary Theory
- Lionel Robbins: The Great Depression
**R.F. Harrod: Income and Money**- A.C. Pigou: Principles and Methods of Industrial Peace

Who graduated from the London School of Economics among the following well-known economists?

**N. Kaldor**- J.M. Keynes
- F.A. Hayek
- Alfred Marshall

‘The Strategy of Economic Development” is the work of

- H. Liebenstein
- S. Kuznets
**A. O. Hirshman**- H. Myint

Who is the author of ‘Problems of Capital Formation in Underdeveloped Countries”?

- N. Kaldor
**R. Nurkse**- J. N. Bhagwati
- S. Kumets

Identify the work of Irving Fisher

**The Making of Index Numbers**- Policy Against Inflation
- Monetary Theory
- A Treatese on Money

Who wrote “There are no longer any believers in laissez-fair except on the lunatic fringe the truth is that we are all planners now”?

- H. R. Dickenson
- E. F. Durbin
- J. Tinbergen
**W. A. Lewis**

Who coined the phrase a temporary abode of purchasing power while explaining the concept of money?

**Milton Friedman**- Francis Walker
- J. M. Keynes
- D. H. Robertson

Who developed the “Keynesian theory of Distribution”?

- C. P. Kindleberger
**N. Kaldor**- Joan Robinson
- J. M. Keynes

Identify the economist who propounded the “Liquidity Preference Theory of Interest”

- Nassau Senior
- K. Wicksell
**J.M Kaynes**- D.H. Robertson

Which one of the following does not match

- J.R. Hicks: Capital and Growth
- C.P. Kindleberger: Economic Development
**H. Myint:****Economic Theory and Underdeveloped Regions**- iv. E.H. Phelps-Brown: The Economics of Labour

Which one among the following does not match?

**Jagdish Bhagwati – Princeton**- Arnartya Sen – Harvard
- P.S. Dasgupta – Cambridge
- T. N. Srinivasan – Yale

Which of these is not the work of J. Clark, B.

- The Control of Trusts
- Philosophy of Wealth
- The Problem of Monopoly
**Economics of Overhead Costs**

Which of the following Alfred Marshall’s works was first published?

- The Principles of Economics
**The Pure Theory of Foreign Trade**- Money, Credit and Commerce
- Industry and Trade

Who first used the term ‘quasi-rent’?

**Alfred Marshall**- David Ricardo
- Karl Marx
- J.S. Mill

How old was Alfred Marshall when he died?

- 85 Years
- 80 Years
**82 Years**- 90 Years

Identify the economist who propounded the “Time Preference Theory of Interest”

- J.M Keynes
- Nassau Senior
**Bohm Bewark**- K. Wicksell

An Austrian economist is among the following Noble Prize winners for Economics. Identify him

**F.A. von Hayek**- George Stigler
- Herbert A. Simon
- Simon Kuznets

Who developed the concept of “Representative Firm”?

- J. M. Keyns.
- A.C Pigou
**Alfred Marshall**- A.W.H. Phillips

Identify the work of T. Schultz

- Productivity and Technical Change
**Transforming Traditional Agriculture**- The Green Revolution Generations of Pakistan
- Jobs, Poverty and the Green Revolution

Who used the term consumption capital for consumer’s goods?

- W.S. Jevons
- Karl Marx
- M.E.L Walras
**Alfred Marshall**

Whose words are these? “we might as reasonable dispute whether it is the upper or the under blade of a pair of scissors that cuts a piece of paper as whether value is governed by utility or cost of production.”

- W.S. Jevons
**Alfred Marshall**- David Ricardo
- J.S..Milt

Who introduced the concept of “Elasticity of Demand into Economic Theory”?

**Alfred Marshall**- K. Wicksell
- A.C. Pigou
- J.S. Mill

Although the idea of the surplus of the consumer can be traced back to Dupuit, a French engineering economist, another economist gave a detailed formulation stating the required assumption of this principle. Pinpoint the economist.

- W.S. Jevons
**Alfred Marshall**- J.S. Mill
- F.W. Taussig

Who succeeded Alfred Marshall on Cambridge as Professor of Political Economy?

- D.H. Robertson
**A.C. Pigou**- F.H. Knight
- J.M. Keynes

Which one does not fit one of the following?

- A.C. Pigou – Cambridge School
- Karl Menger – Austrian School
- Adam Smith – Classical School
**W.S. Jevons – Historical School**

Identify the Indian economist who in 1990 received an honorary knighthood from the British Government for his wide-ranging contribution to education, economic development and finance.

- K.N. Raj
**I.G. Patel**- A.K. Sen
- V.K.R.V. Rao

Identify the author of “Poverty Under British Rule in India”

**Dadabhai Naoroji**- R.C. Dutt
- Surendranath Banerjea
- Raja Rammohun Roy

Capital and Development Planning is the work of

- W.A. Lewis
**S. Chakravarty**- N. Kaldor
- A.K. Dasgupta

Who is the author of “Choice of Technique”?

**Amartya Sen**- K.N. Raj
- J.R. Harris
- W.B. Redaway

Identify the author of “Emplpyment Aspects of Planning in Underdeveloped Countries”

- G. Myrdal
- R. Nurkse
- W.A. Lewis
**K.N. Raj**

Identify the author of “The Trade Cycle”

**R.C. Mathews**- J.M. Clark
- Maurice Dobb
- A.H. Hansen

The Monopolistic Competition Theory was developed by two well-known economists almost simultaneously and independently in the 1930s. E.H. Chamberlin was the one. Who else was other?

- Alfred Marshall
**Joan Robinson**- A.C. Pigou
- J.K. Galbraith

Which of the following is not the work of J.A. Schumpeter?

**Readings in Economics**- Theory of Economic Development

iv. Business Cycles

- History of Economic Analysis

Who is the author of Capitalism, Yesterday and Today?

- J.A. Schumpeter
**M. Dobb**- Karl Marx
- J.K. Galbraith

Identify the work by Amartya Sen

- The Economics of Developing Countries
**Employment, Technology and Development**- Land Reforms and Economic Development
- India’s Green Revolution: Economic Gains and Political Costs

Identify the nationality of Bertil Ohlion, recipient of the 1977 economic noble prize

- German
**Swedish**- Norwegian
- American

Which one of the following has been the most influential work of F.H. Knight?

- The Economic Organization
- Freedom and Reform
**Risk, Uncertainty and Profit**- The Economic Order and Religion

Who first proposed the Revealed Preference Approach to free the theory of consumer behaviour from the restriction of conventional definition of utility?

- John Robinson
**Paul A. Samuelson**- R.G.D. Alien
- J.R Hicks

Which of the following is the work of E.H. Chamberlin?

- The Economic Analysis of Labour Union Power
- Towards a more General Theory of Value
- Theory of Monopolistic
**All of these**

Name of Jacob Viner is associated with?

- Utility terms of trade
**Single factoral terms of trade**- Income terms of trade
- Net barter terms of trade

Who first formulated the “Marginal Productivity Theory of Distribution”?

- J.A. Schumpeter
**J.B. Clark**- F.H. Knight
- L. Euler

Which one of the following is the work of A.C. Pigou?

- Input-output Economics
- Industry and Trade
**Economics of Welfare**- Full Employment in a Free Society

Who is the author of the popular work “Asian Drama”: An Enquiry into Nations’ Causes of Poverty?

**Gunnar Myrdal**- Irving Fisher
- Paul Streeten
- Kingsley Davis

Identify the author of “The Social Framework”

**J.R Hicks**- R.G.D. Alien
- A.C. Pigou
- R.F. Harrod

Who served as an economics professor at Harvard?

- N. Kaldor
**E.H. Chamberlin**- A.C. Pigou
- J.M. Keynes

Who advocated the long-term tax on capital gains?

- J.K. Galbraith
- J.M. Keynes
- F.H. Knight
**N. Kaldor**

The Cambridge School refers to the English economist party that came under the influence of

- J.M. Keynes
**Alfred Marshall**- D.H. Robertson
- E.H. Chamberlin

“The Modern or Neo-Keynesian Theory of Interest” owes it development largely to the efforts of

- Gunnar Myrdal
**J.R. Hicks**- D.H. Robertson
- B. Ohlin

Who among the following Noble Prize winners is an American economist?

- Ragnar Frisch
- Richard Stone
**Lawerence Klein**- James E. Meade

Who wrote “Economics of Imperfect Competition”

**Joan Robinson**- E.A.G. Robinson
- E.H. Chamberlin
- J.R. Hicks

Gunnar Myrdal was awarded Noble Prize for Economics in 1974. What is his nationality?

- Norwegian
**Swedish**- American
- Dutch

Who made the Law of Comparative Costs clear for the first time in the sense of international trade theory?

- Alfred Marshall
**David Ricardo**- A.C. Pigou
- F.W. Taussig

With which of the following concepts is the name of J.M. Keynes particularly associated?

- Marginal propensity to consume
- Marginal propensity to save
- Liquidity preference
**All of the above**

Identify the author of “The Affluent Society”

- Gunnar Myrdal
**J.K. Galbraith**- N. Kaldor
- John Strachc;y

Who wrote “A Contribution to the Theory of Trade Cycle”?

**J.R. Hicks**- N. Kaldor
- A.H. Hansen
- J.S. Duesenberry

Which is the work of R.F. Harrod?

- The Trade Cycle: An Essay
- Towards a Dynamic economics
**The Gold Standard in Theory and Practice**- Reforming the World’s Money

“The General Theory of Employment, Interest and Money” is the major work of

- Alfred Marshall
- N. Kaldor
**J.M Keynes**- F.A Hayek

At which university was W.W. Leontief appointed Professor of Economics in 1946?

- University of Chicago
- London School of Economics
**University of Kiel**- Harvard University

Who among the following economists is not a Noble Prize winner?

- Simon Kuznets
- Paul A. Samuelson
**Joan Robinson**- Robert M. Solow

Which of the following is not the work of Paul A. Samuelson?

**History of Economic Analysis**- Foundation of Economic Analysis
- Linear Programming and Economic Analysis
- Readings in Economics

In which year was Paul A. Samuels on awarded the Nobel Prize for Economics?

- 1966
**1970**- 1968
- 1964

Identify the economist who first developed the Theory of Income Determination in its modem form

- Joan Robinson
- Paul A. Samuelson
**J.M. Keynes**- J.K. Galbraith

*Complementary products are those products that have used with each other. Without one product other product has no use. These products must be in combination form, without one other is useless or have minimum use. In simple words, both products are dependent on each other. Like Pen and Ink etc.*

*Substitute products are those products that have used instead of one another. Without one product other product is also useable. These products must not be in combination form, without one other have maximum or wide use. In simple words, both products are independent of each other.* * Like Flour and Rice etc. *

The concept of cross price elasticity of demand is of different nature as compared to other concepts of elasticities. Cross price elasticity of demand shows the effect of demand in one commodity by changing or variations in the price of another commodity.

Let take an example to clear the concept. Let say we have two products pen and ink. We say the price of the pen is 5$ and the price of ink is 2$. Market conditions changes and the demand for the pen increases, by following the Law of Demand it means the price of the pen has decreased. When the demand of the pen pulls up the demand for ink too. The demand for both products moves in the same manner which shows that both are complementary products.

In the below Cross Price Elasticity Calculator, you just have to put the price and demand of both products. The details of products at time point 1 and time point 2, Cross Price Elasticity Calculator will give you the results that whether the products are complementary or substitute for each other.

Cross Price Elasticity Calculator

In economics, the difference between the price that consumers actually pay and the maximum price they’re willing to pay is the consumer surplus. You have probably seen curves describing supply (S) and demand (D) as a function of price (P) versus quantity (Q) if you have ever attended an economics lecture.

If not, in the market surplus graph below, you can easily understand the notion. As a lower price implies a higher demand for a given article, the demand curve (D) is downward. In comparison, the supply curve (S) is upward, as producers generate more if they can sell their commodity at a higher price. The consumer surplus is the region between the price of equilibrium (the price level where the two curves cross each other) and the curve of demand.

Consumer Surplus Calculator

The TVC, total variable cost, per unit of output is known as the AVC, average variable cost. It can be found easily when the TVC, total variable cost, is divided by the total output (Q). TVC, total variable cost, is all the costs, such as materials and labor that vary with production. The best way to evaluate that variable cost is that if production increases so the cost increases as well.

The AVC would be used by profit-maximizing companies to decide whether to continue their production or shut down it in the short term. If given the products they make, the price they earn against the good is above the AVC, and then they at least cover some fixed costs as well as variable costs. Fixed costs (FC) are those expenses that do not change with scale of production; no matter how much is produced, they are fixed at a certain amount. Building/warehouse is the best example of fixed cost as it has not link with production. Regardless of how many units or clients you create or serve but its rent will remain the same. Consequently, even though you produce nothing, you would still have to pay the fixed costs even in the case of shut down the production.

You are better off continuing production, when the price is higher than the AVC and covers some of the fixed costs. If the price less than the AVC, the company can decide, in the short term, to shut down production as the price will no longer covers all of the variable costs or any part of the fixed costs. The company would decide to shut down the production for minimization of losses.

The average variable cost function is shown in this graph below. It’s a curve with a U shape. Initially, as output increases, the variable cost against per unit of production decreases. It hits a low at a given stage. The variable cost against per unit of production begins to rise after the low one. After a certain point, the rise in AVC is indirectly connected to the law of diminishing marginal returns. The law specifies that the extra expense occurred on production of one more unit is greater than the added profit (or return) earned at any point. The average variable cost is beginning to increase at that point.

The AVC, average variable cost, can be determined by using following equation.

**AVC = TVC / Q**

Where AVC shows average variable cost

TVC shows total variable cost

Q shows Quantity

Average variable cost (AVC) is a key factor in the option of whether to continue operating for a given business. Specifically, for the company to continue running profitably over time, the total variable (TC) cost should be smaller than the marginal revenue (MR).

In other words, this suggests that a good’s average variable cost may be smaller than the good’s price, in this case the business can afford all the variable costs (VC) as well as a majority of the fixed costs (FC). And if a company sells its products for less than the AVC, a company trying to increase its profits (as businesses usually do) may stop manufacturing to avoid the creation of more variable costs.

Marginal Cost (MC) is the cost of a given commodity for each added unit. The total variable cost (TVC) is equal to the accumulated marginal cost of Q units. It implies, then, that, when divided by Q, the average variable cost (AVC) is equal to the total marginal cost (MC) of Q units.

In this calculator you just have to insert the values it will automatically give you desired results.

Average Variable Cost Calculator

**The price elasticity of demand tells us about the rate of change in the quantity demanded of any commodity with respect to change in the price of any commodity. **

In this post, we are introducing our price elasticity of demand calculator where you can just put the value and it will measure the price elasticity and tell you about the kind of elasticity i.e. inelastic, elastic, unitary, etc.

Price Elasticity of Demand Calculator