Indian Economy Questions

Assessing opportunity cost involves making choices and dealing with consequences.

Production costs to an economist reflect opportunity costs.

Mixed economy is the most common economic system in the world.

Although demand curves are typically downward sloping to reflect that consumers’ utility for a good diminishes with increased consumption, firm supply curves are generally upward sloping.The upward sloping character reflects that firms will be willing to increase production in response to a higher market price because the higher price may make additional production profitable.

GDP tends to overstate economic well-being because it takes into account social costs related to the consumption of products with adverse health effects

The India's commerce and industry ministry has started the exercise to revise base year to 2017-18 for computation of wholesale inflation with a view to present more realistic picture of the price situation

In May last year, the government revised the base year for WPI-based inflation to 2011-12 to give a better indication of changes in prices of commodities.

The new index, with 2017-18, is expected to have new items, which would provide a more realistic picture of price rise and its impact on people.

Most of the additions could be in the manufactured products category. Currently, the index has a total of 697 items, including primary articles, fuel and power and manufactured products.

A large underground economy results in an Overstated GDP. The underground economy is also called as Black market. It refers to illegal economic activity. Transactions in the underground economy are illegal either because the good or service being traded is illegal or because an otherwise licit transaction does not comply with government reporting requirements.