For a normal good, a fall in its price creates: MCQ with Answer and Explanation

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For a normal good, a fall in its price creates:

A. positive substitution effect and positive income effect

B. negative substitution effect

C. zero income effect

D. negative income effect only

Answer: Option A

Solution (By JKSSB Mock Tests)

For a normal good, both substitution effect and income effect work in the same direction when price falls, increasing quantity demanded.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of public goods, the free-rider problem leads to:

A. Under-provision of public goods by the market

B. Efficient provision by private firms

C. Over-provision of public goods by the market

D. No role for government

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Correct Answer: Option A

Explanation:
Because individuals can enjoy the benefits of a pure public good without paying, they have an incentive to free-ride, resulting in under-provision if left to the private market.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Saubhagya' scheme is implemented by which ministry?

A. Ministry of Housing

B. Ministry of Rural Development

C. Ministry of Power

D. Ministry of Petroleum

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Correct Answer: Option C

Explanation:
Saubhagya scheme is implemented by the Ministry of Power.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Sagarmala' programme was launched in:

A. 2016

B. 2017

C. 2015

D. 2013

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Correct Answer: Option C

Explanation:
Sagarmala was launched in 2015.

This question belongs to: Economy GK Economy Set 1

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