SSC CGL Finance – Basic Concepts of Economics, Micro Economics, Demand & Supply – Level 1 · Warm-up

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SSC CGL Finance – Basic Concepts of Economics, Micro Economics, Demand & Supply – Level 1 · Warm-up – 12 questions, subject: Finance & Economics (Tier II Paper III). 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.  
One-line fact recallWho defined economics as the science that studies human behaviour as a relationship between ends and scarce means which have alternative uses?

Correct Answer: C [Lionel Robbins]

Explanation:

This is Robbins' scarcity definition (1932).

2.  
An economist collects the prices and sales of many markets and finds that sales fall whenever price rises; from this he states a general law. This is the:

Correct Answer: D [Inductive method]

Explanation:

From particular facts to a general law = inductive (empirical) method; deduction goes from assumptions to conclusions.

3.  
Which of the following is studied in macroeconomics?

Correct Answer: A [National income of a country]

Explanation:

Aggregates (national income, general price level) belong to macro.

4.  
Total utility from 1, 2 and 3 glasses of buttermilk is 15, 27 and 36 utils. Marginal utility of the 3rd glass is:

Correct Answer: B [9 utils]

Explanation:

MU₃ = TU₃ − TU₂ = 36 − 27 = 9.

5.  
When total utility is at its maximum, marginal utility is:

Correct Answer: B [Zero]

Explanation:

TU stops rising exactly where MU = 0 (point of saturation).

6.  
Other things remaining the same, a fall in the price of a good leads to:

Correct Answer: C [A rise in quantity demanded (extension)]

Explanation:

Own-price change → movement along the same curve: extension of demand.

7.  
Price of a good rises by 10% and its quantity demanded falls by 15%. Price elasticity of demand is:

Correct Answer: A [1.5]

Explanation:

e = 15% ÷ 10% = 1.5 (elastic).

8.  
A demand curve parallel to the price (vertical) axis shows demand that is:

Correct Answer: D [Perfectly inelastic]

Explanation:

Vertical demand: quantity does not change at any price → e = 0.

9.  
Goods whose demand falls when consumers' income rises are called:

Correct Answer: C [Inferior goods]

Explanation:

Income elasticity < 0 → inferior good.

10.  
Cross elasticity of demand between two complementary goods (such as pen and refill) is:

Correct Answer: D [Negative]

Explanation:

Price of one rises → demand for the other falls → negative sign.

11.  
Demand Qd = 60 − P and supply Qs = 2P. The equilibrium price is:

Correct Answer: A [₹ 20]

Explanation:

60 − P = 2P → P = 20 (Q = 40).

12.  
The slope of a production possibility curve measures:

Correct Answer: B [Marginal opportunity cost (marginal rate of transformation)]

Explanation:

Units of one good given up for one more unit of the other = MRT.

➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics

📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
Here you get the answer with a one-line explanation. 1,064 original questions with worked answers · Part A Finance & Accounts and Part B Economics & Governance notes · practice sets + 3 mock tests
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