Chapter 6: Distribution Analysis — Online MCQ Test
ECONOMICS · CLASS 11th · Tamil Nadu State Board
Practice Chapter 6: Distribution Analysis with a free chapter-wise online MCQ test.
This chapter covers: Focusing on factor pricing this chapter covers theories of distribution rent wages interest and profit. Students study Ricardian theory of rent Marginal Productivity theory Keynesi....
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Chapter 6: Distribution Analysis — Important Questions & Answers
In economics, what is meant by 'distribution'?
- A. Allocation of national income among factors of production
- B. Division of goods among consumers
- C. Transport of goods from producers to markets
- D. Exchange of money between banks
Answer: A. Allocation of national income among factors of production
Distribution refers to how the total national income is shared among the factors of production such as land, labour, capital, and entrepreneurship.
Distribution refers to how the total national income is shared among the factors of production such as land, labour, capital, and entrepreneurship.
Which of the following is a reward for the use of land?
- A. Wage
- B. Rent
- C. Interest
- D. Profit
Answer: B. Rent
Rent is the payment made for the use of land, which is a factor of production.
Rent is the payment made for the use of land, which is a factor of production.
Marginal Productivity Theory explains factor pricing on the basis of:
- A. Average product of the factor
- B. Marginal product of the factor
- C. Total cost of production
- D. Market price of the final good only
Answer: B. Marginal product of the factor
The theory states that a factor is paid according to its marginal contribution to output.
The theory states that a factor is paid according to its marginal contribution to output.
A landowner owns two plots of land. One plot is more fertile than the other, and both are cultivated. Rent arises because:
- A. Both plots are equally productive
- B. The more fertile plot yields a surplus over the marginal plot
- C. The less fertile plot is never used
- D. The government fixes rent arbitrarily
Answer: B. The more fertile plot yields a surplus over the marginal plot
Under Ricardian theory, rent is produced by the differential advantage of superior land over marginal land.
Under Ricardian theory, rent is produced by the differential advantage of superior land over marginal land.
Which of the following pairs is correctly matched?
- A. Rent — Reward for entrepreneurship
- B. Wage — Reward for land
- C. Interest — Reward for capital
- D. Profit — Reward for labour only
Answer: C. Interest — Reward for capital
Interest is the reward paid for the use of capital, while wages, rent, and profit relate to other factors.
Interest is the reward paid for the use of capital, while wages, rent, and profit relate to other factors.