Question : Which of the following statement is correct? (a) TU increases till MU is positive. (b) TU is maximum when MU is equal to zero. (c) TU declines when MU is negative.
Option 1: A only
Option 2: B only
Option 3: A and B only
Option 4: A B and C
Correct Answer: A B and C
Solution :
1. TU increases with an increase in consumption of a commodity as long as MU is positive. In this phase, TU increases but a diminishing rate as MU from each successive unit tends to diminish.
2. When TU reaches its maximum, MU becomes zero. TU stops rising at this stage. This point is known as point of satiety.
3. When consumption is increased beyond the point of satiety, TU starts falling as MU becomes negative.
1. As long as MU is positive, TU rises as a commodity's consumption does. While MU from each succeeding unit tends to drop, TU increases in this phase but at a diminishing pace.
2. MU is zero when TU reaches its greatest value. At this point, TU stops climbing. This point is known as the point of satiety.
3. When consumption is increased beyond the point of satiety, TU starts falling as MU becomes negative. Hence all are the correct.
Question : Which of the following statement is not true?
Option 1: As long as MU is positive, TU increases
Option 2: TU is zero when MU is zero
Option 3: TU starts decreasing when MU is negative
Option 4: After the point of satiety, MU becomes negative
Question : When income level is zero, the consumption is ___________.
Option 1: Positive
Option 2: Negative
Option 3: Zero
Option 4: None of the above.
Question : Net earnings is ___, when receipts from exports are equal to payments for imports.
Option 1: Negative
Option 2: Zero
Option 3: Positive
Question : Which of the following statement is correct? Statement 1: Recruitment is a negative process in staffing. Statement 2: Selection is a positive process in staffing.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Question : Which of the following is not a benefit of the development of human capital? A: Increases technological expertise B: Increases business size C: Increases production costs D: Shifts in social attitudes
Option 1: A and B only
Option 2: A, B and C only
Option 3: C Only
Option 4: All of the above
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