Veblen goods are demanded mainly because: MCQ with Answer and Explanation

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Veblen goods are demanded mainly because:

A. they have many substitutes

B. high price confers prestige or status

C. they are necessities

D. their price is low

Answer: Option B

Solution (By JKSSB Mock Tests)

Veblen goods are conspicuous consumption goods where a higher price increases their status value.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

Which of the following methods estimates national income by summing wages, rent, interest and profit?

A. Income method

B. Production method

C. Value added method

D. Expenditure method

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Correct Answer: Option A

Explanation:
The income method sums all factor incomes: wages, rent, interest and profit.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a characteristic of the short-run production function?

A. All factors are variable

B. At least one factor is fixed

C. No diminishing returns possible

D. Returns to scale are the only relevant concept

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Correct Answer: Option B

Explanation:
In the short run, at least one factor of production is fixed, and the law of variable proportions operates.

This question belongs to: Economy GK Economy Set 1

Question #3

Zero-based budgeting requires that:

A. previous year's budget is the base for all allocations

B. every expenditure item is justified from zero each year

C. deficit is zero

D. only capital expenditure is budgeted

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Correct Answer: Option B

Explanation:
Zero-based budgeting requires all expenditures to be justified from zero each budget period.

This question belongs to: Economy GK Economy Set 1

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