Q.6. For any increase in quantity of anything:

(A)   Total utility increases

(B)   Total utility remains constant initially and increases thereafter

(C)   Total utility declines initially and increases thereafter

(D)   Additional utility of an extra unit of that thing normally falls

Q.7. Adam Smith believed that use-value of a thing is:

(A)   Always higher than the exchange-value

(B)  Always lower than the exchange-value

(C)   Much higher or much lower than the exchange-value

(D)   None of the above

Q.8. Viner rejects the use of income for measuring happiness for a number of reasons:

(A)   Due to the diminishing-utility principle increase of income does not lead to the same proportionate increase in happiness. On the other hand with more income there are more evils which need to be warded off for the same amount of positive satisfaction. For example, doubling of income may require greater expenditure on transportation and health.

(B)  The amount of total welfare depends on how the income is distributed among different classes of people. In the ancient or primitive society when the income was low inequality was also low. As the overall standards started improving income inequality also started. However, at the global level today one observes that the less developed countries are more rigidly stratified and more unequal than the developed countries.

(C)  It does not include the services offered by Church.

(D)   Satisfaction is not the same thing as desire. Income measures assume that price or real income can measure the satisfaction. In fact they measure the desire and not the satisfaction.

Q.9. According to Mishan welfare criteria have two essential attributes:

(A)   They avoid exercise of power

(B)   The ethical judgments made should command a consensus

(C)   The ethical judgments made should be rational

(D)   The criteria should be logically tenable; in particular, they should be conceptually clear and unambiguous and, also, consistent in themselves if mutually contradictory recommendations are to be avoided

Q.10. Sen argues that:

(A)   Man is rational

(B)   Man is egoist

(C)   Man has sympathy for others and is willing to work in the interest of others.

(D)   All of the above