SSC CGL Economy – Basic Concepts of Economics – Level 2 · Exam Level · Tier I Sprint

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SSC CGL Economy – Basic Concepts of Economics – Level 2 · Exam Level · Tier I Sprint – 15 questions, subject: Indian Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Match the followingMatch the economist with the key idea:
P. Adam Smith Q. Alfred Marshall R. Lionel Robbins S. J. M. Keynes
1. Scarcity 2. Wealth 3. General theory of employment 4. Welfare

Correct Answer: B [P-2, Q-4, R-1, S-3]

Explanation:

Smith–wealth, Marshall–welfare, Robbins–scarcity, Keynes–employment (Wise Women Save Gold).

2.  
Chronological orderArrange in chronological order:
I. The General Theory of Employment, Interest and Money
II. The Wealth of Nations
III. Principles of Economics
IV. An Essay on the Nature and Significance of Economic Science

Correct Answer: D [II, III, IV, I]

Explanation:

1776 (II) → 1890 (III) → 1932 (IV) → 1936 (I).

3.  

Directions (next 2 questions): Use the production possibility table of an economy.

Point A B C D E F
Wheat (lakh tonnes) 0 1 2 3 4 5
Cloth (lakh metres) 15 14 12 9 5 0
Data tableMoving from point B to point E, how much cloth does the economy give up in all?

Correct Answer: C [9 lakh metres]

Explanation:

B (1, 14) → E (4, 5): cloth falls from 14 to 5, a loss of 9 (= 2 + 3 + 4 on the MOC ladder).

4.  
Data tableThe combination of 2 lakh tonnes of wheat and 6 lakh metres of cloth shows:

Correct Answer: A [under-utilisation of resources]

Explanation:

On the PPC, 2 tonnes of wheat goes with 12 of cloth; 6 < 12 → point inside the curve.

5.  
The price of a notebook rises from ₹ 50 to ₹ 55 and the quantity demanded falls from 200 to 190. The price elasticity of demand is:

Correct Answer: C [0.5 (inelastic)]

Explanation:

%ΔQ = 5%, %ΔP = 10% → 5 ÷ 10 = 0.5.

6.  
Assertion–Reason
A: Water is essential for life yet cheap, while diamonds are costly.
R: Price is related to marginal utility, not to total utility.

Correct Answer: A [Both A and R are true and R explains A]

Explanation:

Water is plentiful, so its marginal utility is low; diamonds are scarce, so MU is high (paradox of value).

7.  
Data tableA firm's fixed cost is ₹ 50. Its total cost of producing 1, 2, 3 and 4 units is ₹ 60, ₹ 70, ₹ 76 and ₹ 84. The marginal cost of the 3rd unit is:

Correct Answer: B [₹ 6]

Explanation:

MC₃ = TC₃ − TC₂ = 76 − 70 = ₹ 6 (TVC₃ = 76 − 50 = 26 is a different idea).

8.  
Which of the following is the best example of a public good?

Correct Answer: D [Street lighting on a public road]

Explanation:

Street lighting is non-rival and non-excludable (two NOs); the others are private goods.

9.  
True/False countHow many of the following statements are true?
I. A mixed economy has both public and private sectors.
II. In a market economy, prices are fixed by the government.
III. India opted for a mixed economy after independence.
IV. Capital is a stock concept.

Correct Answer: D [Three]

Explanation:

I, III and IV are true; in a market economy prices are set by demand and supply.

10.  
Demand: Qd = 150 − 3P; supply: Qs = 30 + 2P. The equilibrium price is:

Correct Answer: C [₹ 24]

Explanation:

150 − 3P = 30 + 2P → 5P = 120 → P = 24 (Q = 78).

11.  
Two-quantity comparison
Quantity I: elasticity when price falls by 10% and quantity demanded rises by 30%
Quantity II: elasticity when price rises by 20% and quantity demanded falls by 40%

Correct Answer: A [Quantity I > Quantity II]

Explanation:

QI = 30 ÷ 10 = 3; QII = 40 ÷ 20 = 2 → QI > QII.

12.  
Which pair is incorrectly matched?

Correct Answer: B [Car and petrol – substitute goods]

Explanation:

Car and petrol are used together → complements, not substitutes.

13.  
Trick SpotterPrice falls from ₹ 10 to ₹ 8 and total spending rises from ₹ 400 to ₹ 480. The fastest correct way to classify demand is:

Correct Answer: A [Spending test: price down, spending up → elastic]

Explanation:

Price and spending moved in opposite directions → elastic (quantity 40 → 60, Ed = 2.5).

14.  
Spot My MistakeA student wrote, "Mining of iron ore is a tertiary activity because the ore is sold to steel plants." In the three-sector classification, iron-ore mining belongs to the:

Correct Answer: B [Primary sector]

Explanation:

Mining extracts a natural resource → primary; selling the ore does not change its sector (national-accounts tables group mining under 'Industry').

15.  
Reverse questionThis sector covers transport, storage, communication, banking and trade – activities that help other sectors but produce no good themselves. Which sector is it?

Correct Answer: C [Tertiary sector]

Explanation:

Services that support primary and secondary production = tertiary (service) sector.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Indian Economy book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-indian-economy

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