Chapter Exam

Chapter 7 ECONOMICS : Theory of Distribution — Online MCQ Test

Q: The payment made for the use of land is known as:

Answer: C. Rent — In economics, rent is defined as the income earned by the owner of land or any other natural resource in fixed supply.

Q: Which of the following is considered a 'reward' for the entrepreneur?

Answer: B. Profit — Profit is the residual income earned by the entrepreneur for bearing risk and organizing factors of production.

Q: Which theory of rent was proposed by David Ricardo?

Answer: B. Ricardian Theory of Rent — David Ricardo is famous for his theory that rent arises due to the differences in the fertility of land.

Q: If the marginal productivity of labor increases while its wage rate remains constant, what should a rational firm do?

Answer: B. Increase labor usage — If marginal product exceeds the wage, hiring more labor increases total profit until marginal product equals the wage.

Q: Which theory suggests that interest is the payment for the delay of consumption?

Answer: C. Time Preference Theory — Time preference theory, famously associated with Irving Fisher, views interest as the price of waiting or delaying consumption.

ECONOMICS · CLASS 11 INTER I YEAR · Andhra State Board

Practice Chapter 7 ECONOMICS : Theory of Distribution with a free chapter-wise online MCQ test for Andhra State Board CLASS 11 INTER I YEAR ECONOMICS. This chapter covers: This chapter covers marginal productivity theory of distribution theories of rent wages interest and profit determination.. AI-generated questions from basic to board-exam level, with instant results and explanations.

Questions

20m

Time Limit

Attempts Left

10 random questions from this chapter (mixed difficulty)
Questions you've seen before won't repeat until the pool resets
You have 20 minutes — exam auto-submits when time is up
Maximum 3 attempts per chapter
Results and explanations shown immediately after submission

New here? Register free — includes 3 free chapter exams.

Chapter 7 ECONOMICS : Theory of Distribution — Important Questions & Answers (FAQ)

Frequently asked questions from Andhra State Board CLASS 11 INTER I YEAR ECONOMICS — Chapter 7 ECONOMICS : Theory of Distribution, with answers and explanations. These are sample questions; the exam has its own separate question set.

The payment made for the use of land is known as:

A. Wages
B. Interest
C. Rent ✓
D. Profit

Answer: C. Rent
In economics, rent is defined as the income earned by the owner of land or any other natural resource in fixed supply.

Which of the following is considered a 'reward' for the entrepreneur?

A. Wages
B. Profit ✓
C. Interest
D. Rent

Answer: B. Profit
Profit is the residual income earned by the entrepreneur for bearing risk and organizing factors of production.

Which theory of rent was proposed by David Ricardo?

A. Modern Theory of Rent
B. Ricardian Theory of Rent ✓
C. Quasi-rent Theory
D. Marginal Productivity Theory

Answer: B. Ricardian Theory of Rent
David Ricardo is famous for his theory that rent arises due to the differences in the fertility of land.

If the marginal productivity of labor increases while its wage rate remains constant, what should a rational firm do?

A. Decrease labor usage
B. Increase labor usage ✓
C. Maintain labor usage
D. Stop production

Answer: B. Increase labor usage
If marginal product exceeds the wage, hiring more labor increases total profit until marginal product equals the wage.

Which theory suggests that interest is the payment for the delay of consumption?

A. Loanable Funds Theory
B. Liquidity Preference Theory
C. Time Preference Theory ✓
D. Marginal Productivity Theory

Answer: C. Time Preference Theory
Time preference theory, famously associated with Irving Fisher, views interest as the price of waiting or delaying consumption.

← Previous Chapter

Chapter 6 ECONOMICS : Market Structure

Next Chapter →

Chapter 8 ECONOMICS : National Income Accounting