MCQS on Debate on Methods of Economic Analysis:
Historical school, Marginal revolution demand side analysis, Criticsm of classical theory of
value and distribution, Evolution of new theory of value of distribution: Menger, Walras and Jevons
a) Karl Marx
b) Friedrich Engels
c) Adam Smith
d) Wilhelm Roscher
Answer: d) Wilhelm Roscher
2. What was the primary focus of the Historical School of economics?
a) Mathematical models
b) Understanding economic history and institutions
c) Maximizing utility
d) Market equilibrium
Answer: b) Understanding economic history and institutions
3. Which term describes the belief that economic principles are shaped by historical and cultural context?
a) Rationalism
b) Methodological individualism
c) Historicism
d) Positivism
Answer: c) Historicism
4. Who among the following economists is associated with the Historical School?
a) John Maynard Keynes
b) Wilhelm Roscher
c) Milton Friedman
d) Friedrich Hayek
Answer: b) Wilhelm Roscher
5. What did the Historical School criticize about classical economics?
a) Its reliance on mathematical models
b) Its neglect of historical and institutional factors
c) Its emphasis on market equilibrium
d) Its rejection of government intervention
Answer: b) Its neglect of historical and institutional factors
Marginal Revolution and Demand-Side Analysis:
6. Who were the key figures associated with the Marginal Revolution?
a) Adam Smith and David Ricardo
b) Karl Marx and Friedrich Engels
c) Alfred Marshall and Carl Menger
d) John Maynard Keynes and Milton Friedman
Answer: c) Alfred Marshall and Carl Menger
7. What was the central idea of the Marginal Revolution?
a) Labor theory of value
b) Supply-side economics
c) Marginal utility and diminishing returns
d) Historical materialism
Answer: c) Marginal utility and diminishing returns
8. According to the Marginal Revolution, what determines the value of a good?
a) Labor input
b) Demand and supply equilibrium
c) Marginal utility
d) Production costs
Answer: c) Marginal utility
9. Which term describes the additional satisfaction gained from consuming one more unit of a good?
a) Total utility
b) Marginal utility
c) Diminishing returns
d) Elasticity
Answer: b) Marginal utility
10. How did the Marginal Revolution contribute to demand-side analysis?
a) By emphasizing the role of supply in determining prices
b) By focusing on consumer preferences and behavior
c) By advocating for government intervention in markets
d) By promoting the labor theory of value
Answer: b) By focusing on consumer preferences and behavior
11. What was a major criticism of the classical theory of value by the Marginalists?
a) Its emphasis on supply-side factors
b) Its neglect of demand-side factors
c) Its reliance on historical materialism
d) Its rejection of government intervention
Answer: b) Its neglect of demand-side factors
12. According to the classical theory of value, what determines the value of a good?
a) Marginal utility
b) Demand and supply equilibrium
c) Labor input
d) Production costs
Answer: c) Labor input
13. Which economist criticized the classical theory of distribution for its failure to account for capital and land rents?
a) Karl Marx
b) David Ricardo
c) Alfred Marshall
d) Thomas Malthus
Answer: a) Karl Marx
14. What is the primary focus of classical theory regarding distribution?
a) Rent
b) Wages
c) Profits
d) Interest
Answer: c) Profits
15. Which term describes the idea that each factor of production receives income equal to its marginal productivity?
a) Labor theory of value
b) Law of diminishing returns
c) Marginal productivity theory
d) Supply and demand equilibrium
Answer: c) Marginal productivity theory
16. Who is considered the founder of the Austrian School of economics?
a) Carl Menger
b) William Stanley Jevons
c) Léon Walras
d) John Maynard Keynes
Answer: a) Carl Menger
17. What was Carl Menger's contribution to the theory of value?
a) Marginal utility theory
b) Labor theory of value
c) Classical theory of value
d) Historical theory of value
Answer: a) Marginal utility theory
18. Who developed the concept of general equilibrium in economics?
a) Carl Menger
b) William Stanley Jevons
c) Léon Walras
d) Alfred Marshall
Answer: c) Léon Walras
19. What did Léon Walras contribute to the theory of value and distribution?
a) Marginal utility theory
b) Theory of general equilibrium
c) Theory of marginal productivity
d) Labor theory of value
Answer: b) Theory of general equilibrium
20. Which economist is associated with the theory of marginal utility along with Carl Menger and Léon Walras?
a) Alfred Marshall
b) David Ricardo
c) Adam Smith
d) John Maynard Keynes
Answer: a) Alfred Marshall
21. Which term describes the concept introduced by William Stanley Jevons, Carl Menger, and Léon Walras that describes the satisfaction or benefit derived from consuming a good or service?
a) Marginal utility
b) Total utility
c) Diminishing returns
d) Production cost
Answer: a) Marginal utility
22. How did William Stanley Jevons contribute to the theory of value and distribution?
a) He developed the concept of general equilibrium
b) He introduced the theory of marginal utility
c) He formulated the labor theory of value
d) He advocated for the classical theory of distribution
Answer: b) He introduced the theory of marginal utility
23. Who among the following economists focused on explaining economic phenomena using mathematical models?
a) Carl Menger
b) William Stanley Jevons
c) Léon Walras
d) Alfred Marshall
Answer: d) Alfred Marshall
24. What did the new theory of value and distribution introduced by Menger, Walras, and Jevons emphasize?
a) Labor as the sole determinant of value
b) Supply-side factors in determining prices
c) Marginal utility and demand-side factors
d) Long-run equilibrium in markets
Answer: c) Marginal utility and demand-side factors
25. Which economist among Menger, Walras, and Jevons emphasized the role of individual preferences and subjective value in determining prices?
a) Carl Menger
b) Léon Walras
c) William Stanley Jevons
d) All of the above
Answer: a) Carl Menger
26. How did the new theory of value and distribution differ from the classical theory?
a) It emphasized supply-side factors over demand-side factors
b) It focused on long-run equilibrium rather than short-run fluctuations
c) It incorporated marginal utility and subjective value
d) It rejected the role of government intervention in markets
Answer: c) It incorporated marginal utility and subjective value
27. What is the significance of the new theory of value and distribution in modern economics?
a) It laid the foundation for neoclassical economics
b) It revived interest in classical economic principles
c) It emphasized the role of government intervention in markets
d) It rejected the use of mathematical models in economics
Answer: a) It laid the foundation for neoclassical economics
28. Which term describes the idea that economic agents make decisions based on the marginal benefits and costs of their actions?
a) Rational choice theory
b) Marginal utility theory
c) Classical economics
d) Historical materialism
Answer: a) Rational choice theory
29. What did the new theory of value and distribution contribute to the understanding of market equilibrium?
a) It introduced the concept of market failure
b) It provided insights into the dynamics of supply and demand
c) It emphasized the importance of government intervention
d) It rejected the idea of market equilibrium
Answer: b) It provided insights into the dynamics of supply and demand
30. Which economic concept emphasizes the interplay between individual choices and market outcomes?
a) Marginal productivity
b) Market equilibrium
c) Rational expectations
d) Marginal analysis
Answer: d) Marginal analysis
31. What role did the new theory of value and distribution play in shaping modern microeconomic analysis?
a) It emphasized the importance of historical and institutional factors
b) It introduced the concept of perfect competition
c) It provided a framework for analyzing consumer behavior and market outcomes
d) It rejected the use of mathematical models in economics
Answer: c) It provided a framework for analyzing consumer behavior and market outcomes
32. How did the new theory of value and distribution contribute to the understanding of consumer behavior?
a) By emphasizing the role of production costs
b) By introducing the concept of diminishing returns
c) By focusing on individual preferences and marginal utility
d) By promoting the labor theory of value
Answer: c) By focusing on individual preferences and marginal utility
33. Which term describes the situation where the last unit of a good consumed provides less satisfaction than the previous units?
a) Diminishing returns
b) Marginal utility
c) Total utility
d) Equilibrium utility
Answer: a) Diminishing returns
34. What did Carl Menger, Léon Walras, and William Stanley Jevons contribute to the understanding of market dynamics?
a) They introduced the concept of market socialism
b) They developed mathematical models to explain market equilibrium
c) They emphasized the role of government intervention in markets
d) They provided insights into the role of supply and demand in determining prices
Answer: d) They provided insights into the role of supply and demand in determining prices
35. Which term describes the condition where the quantity demanded equals the quantity supplied in a market?
a) Disequilibrium
b) Market failure
c) Equilibrium
d) Marginal analysis
Answer: c) Equilibrium
36. How did the new theory of value and distribution contribute to the understanding of income distribution?
a) By focusing on the role of government policies
b) By emphasizing the importance of land rent
c) By highlighting the role of capital and entrepreneurship in generating income
d) By rejecting the concept of income distribution
Answer: c) By highlighting the role of capital and entrepreneurship in generating income
37. Which term describes the condition where resources are allocated efficiently in an economy?
a) Market equilibrium
b) Perfect competition
c) Allocative efficiency
d) Marginal productivity
Answer: c) Allocative efficiency
38. What is the significance of the new theory of value and distribution in understanding economic growth?
a) It emphasized the role of government intervention in promoting growth
b) It provided insights into the factors that contribute to increased productivity
c) It rejected the idea of economic growth as a desirable goal
d) It focused on the role of natural resources in economic development
Answer: b) It provided insights into the factors that contribute to increased productivity
39. Which term describes the situation where resources are used in the most efficient way possible to maximize total utility?
a) Marginal utility
b) Total utility
c) Allocative efficiency
d) Diminishing returns
Answer: c) Allocative efficiency
40. How did the new theory of value and distribution influence policy recommendations in economics?
a) It advocated for government intervention to correct market failures
b) It promoted laissez-faire policies and minimal government interference
c) It rejected the role of government in economic affairs
d) It emphasized the importance of central planning in resource allocation
Answer: a) It advocated for government intervention to correct market failures
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