The concept of 'Producer Surplus' is the difference between: MCQ with Answer and Explanation

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The concept of 'Producer Surplus' is the difference between:

A. Price and marginal cost only

B. What producers are willing to accept and what they actually receive

C. What consumers are willing to pay and what they actually pay

D. Total revenue and total cost

Answer: Option B

Solution (By JKSSB Mock Tests)

Producer surplus is the difference between the amount a producer is willing to accept for a good and the amount actually received (market price).

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of 'Algorithmic Pricing'?

A. Prices that never change

B. The use of algorithms to set prices automatically, potentially leading to tacit collusion or rapid price adjustment

C. Only manual price setting by humans

D. Only cost-plus pricing without data

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Correct Answer: Option B

Explanation:
Algorithmic pricing employs software algorithms that automatically adjust prices in response to demand, competitor prices and other data; under certain conditions it can facilitate tacit collusion or increase price volatility.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a characteristic of the 'Endogenous Growth Theory'?

A. Diminishing returns to capital always limit growth

B. Long-run growth is determined by factors within the model such as human capital and R&D

C. Only population growth determines per capita income growth

D. Technological progress is exogenous

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Correct Answer: Option B

Explanation:
Endogenous growth theory treats technological progress and human capital accumulation as outcomes of economic decisions within the model, allowing sustained long-run growth in per capita income.

This question belongs to: Economy GK Economy Set 1

Question #3

Disinvestment refers to:

A. sale of government equity in public sector enterprises

B. purchase of private sector equity by the government

C. foreign investment in defence

D. borrowing from the IMF

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Correct Answer: Option A

Explanation:
Disinvestment is the sale of government equity in public sector enterprises.

This question belongs to: Economy GK Economy Set 1

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