Agricultural Economics — Part 1 MCQs with Explanations

The correct answer is Option A: Cost of cultivation . This is the cost incurred in cultivating crops or managing agricultural activities on a per-hectare basis. It includes expenses related to seeds, fertilizers, labor, machinery, and other inputs necessary for farming. It helps farmers assess the financial feasibility and efficiency of their agricultural practices.

The nationalization of banks in India was carried out on 19 th July, 1969 . The Government of India nationalized 14 major commercial banks with deposits of over ₹50 crores each to enhance banking penetration and boost economic development. The objective was to ensure banking services reached rural areas and to provide credit support to agriculture, small industries, and exports. A second phase of nationalization took place in 1980 , where 6 more banks were nationalized, bringing the total to 20.

The correct answer is Joint farming . Let's understand why: Dry Farming: This is a type of farming where crops are grown in areas with very little rainfall. Think of it as farming in dry climates. Ranching: This involves raising livestock (like cattle or sheep) over a large area. It's basically livestock farming on a big scale. Joint Farming: This refers to an activity in which two or more farmers pool their resources together for carrying out farming operations jointly. Its the type of cooperative farming Mixed Farming: This is when farmers grow crops and raise livestock on the same farm. It's a mix of crop production and animal husbandry. So, Dry Farming, Ranching and Mixed farming are all recognized methods of farming. Joint farming refers to an organizational structure or cooperation between farmers, not a distinct farming method itself.

The demand for luxury goods is typically characterized as Option A: Elastic . Elastic demand means that the quantity demanded is responsive to changes in price. In the context of luxury goods, when the price of a luxury item increases, consumers tend to reduce their demand for it. Conversely, when the price of a luxury item decreases, consumers may increase their demand for it. This sensitivity to price changes is a characteristic of goods with elastic demand. Here's a brief overview of the other options: Option B: Perfectly elastic - Perfectly elastic demand is an extreme case where the quantity demanded becomes zero if the price increases even slightly. It is rarely observed in real-world situations. Option C: Inelastic - Inelastic demand refers to situations where the quantity demanded is relatively unresponsive to changes in price. Essential goods like basic food items often exhibit inelastic demand because consumers need them regardless of price changes. Option D: Unitary elastic - Unitary elastic demand occurs when the percentage change in quantity demanded is exactly equal to the percentage change in price, resulting in a constant elasticity coefficient of 1. In summary, luxury goods are generally associated with Option A: Elastic demand, as consumers are more responsive to changes in the prices of such goods compared to essential or basic items.

Diversified farming is a kind of system of farming . Diversified farming refers to a practice where farmers engage in the production of multiple crops and/or livestock to reduce risk and increase resilience against market fluctuations and environmental changes. This system allows farmers to make better use of resources, increase productivity, and enhance sustainability by spreading the risk associated with farming operations. By diversifying, farmers can also take advantage of different market opportunities and improve their overall income stability.

The term IBRD stands for the International Bank for Reconstruction and Development, which is one of the five member institutions that compose the World Bank Group. Therefore, in this context, IBRD is synonymous with the World Bank . The World Bank provides financial and technical assistance to developing countries for development projects. Hence, the correct option is Option D: World Bank .

The marginal physical product (MPP) of a variable input becomes negative in the short run when the law of diminishing returns sets in. This typically occurs in the 2 nd stage and continues into the 3 rd stage. In the short run, as more of a variable input (like labor) is added to a fixed input (like land), the additional output (marginal product) may initially increase but eventually starts to decrease, leading to a negative marginal physical product. Therefore, in this context, the correct option is Option D: In 2 nd and 3 rd stages .

First, let's understand the key terms: * Paid-out cost: This is the actual money the farmer spends. In this case, it's Rs. 500. * Fixed cost: These are costs that don't change with the level of production. Here, it's Rs. 250. * Gross returns: This is the total revenue the farmer gets from the farm business, which is Rs. 3700. * Capital turnover: This ratio shows how efficiently a business uses its capital to generate revenue. It's calculated as Gross Returns / Total Cost. Now, let's calculate the total cost: Total Cost = Paid-out Cost + Fixed Cost = Rs. 500 + Rs. 250 = Rs. 750 Next, calculate the capital turnover: Capital Turnover = Gross Returns / Total Cost = Rs. 3700 / Rs. 750 = 4.93 Therefore, the capital turnover is 4.93. So, the correct answer is: Option C: 4.93

FSS (Farmers’ Service Societies) was initiated to support farmers by providing financial and technical assistance. It was pioneered by Bawa , who contributed significantly to its development and implementation. NABARD (National Bank for Agriculture and Rural Development) was established in 1982 to promote rural development and finance agricultural activities. It was formed based on the recommendations of the Shivaraman Committee, and B. Shivaraman played a crucial role in its establishment. DRI (Differential Rate of Interest Scheme) was introduced in 1972 to provide low-interest loans to weaker sections of society. The scheme was designed based on the recommendations of M. Narasimhan , who was instrumental in shaping India's banking sector policies. RRB (Regional Rural Banks) were established in 1975 under the RRB Act, 1976, with the aim of providing banking facilities to rural areas. B. K. Hazare played a major role in their implementation by advocating for financial inclusion and rural credit availability.

183.49 lakh hectares is the correct answer to “The gross agricultural area in Rajasthan during 2011 was”. This question is standard in competitive examination syllabi for Agricultural Economics.

Basic holding is the correct answer to “A holding which is smaller than economic holding a reasonable standard of living to the cultivator but not sufficient for the purpose of agricultural operations, is known as”. This question is standard in competitive examination syllabi for Agricultural Economics.

Current assets is the correct answer to “The most liquid assets are”. This question is standard in competitive examination syllabi for Agricultural Economics.

On true line is the correct answer to “If E(u) = 0, the estimated line lies”. This question is standard in competitive examination syllabi for Agricultural Economics.

28% is the correct answer to “The share of agriculture sector in national income of India is”. This question is standard in competitive examination syllabi for Agricultural Economics.

Free trade is the correct answer to “Objective of mercantilists was against to”. This question is standard in competitive examination syllabi for Agricultural Economics.

Implementation is the correct answer to “Which one you consider most important phase of product cycle”. This question is standard in competitive examination syllabi for Agricultural Economics.

Types of farming is the correct answer to “Dairy farming, poultry farming, crop farming and pig farming are”. This question is standard in competitive examination syllabi for Agricultural Economics.

4, 3, 2, 1 is the correct answer to “Arrange the following demographic transition theory given by Blackur (ascending order) 1. Declining phase with low mortality, lower fertility 2. Low stationary phases with low fertility and low mortality 3. Early expanding phase marked by high fertility 4. High stationary phase marked by high fertility and mortality”. This question is standard in competitive examination syllabi for Agricultural Economics.

Straight line is the correct answer to “Indifference curves for perfect substitutes will be”. This question is standard in competitive examination syllabi for Agricultural Economics.

Slope upward to right is the correct answer to “If income effect is positive for both X and Y goods, the ICC will be”. This question is standard in competitive examination syllabi for Agricultural Economics.

Collector is the correct answer to “Who is the Chairman of SFDA”. This question is standard in competitive examination syllabi for Agricultural Economics.

Partial budgeting is the correct answer to “When new variety of a crop is introduced, which farm management approach is appropriate”. This question is standard in competitive examination syllabi for Agricultural Economics.

1806 is the correct answer to “In which year was the first bank in India established”. This question is standard in competitive examination syllabi for Agricultural Economics.

Both A and B is the correct answer to “Inflation is measured by”. This question is standard in competitive examination syllabi for Agricultural Economics.

1904 is the correct answer to “Cooperative credit societies act was passed in”. This question is standard in competitive examination syllabi for Agricultural Economics.

Karl Marx is the correct answer to “The concept of 'reserve army of labour' is due to”. This question is standard in competitive examination syllabi for Agricultural Economics.

Aristotle is the correct answer to “'Economica' is written by”. This question is standard in competitive examination syllabi for Agricultural Economics.

a-4, b-3, c-2, d-1 is the correct answer to “Match the List-I with List-II and select the correct answer: List-I (Journal/bulletin) List-II (Periodicity) a. Agricultural Marketing 1. Annual b. Agricultural Situation of India 2. Biannual c. Bulletin on Food Statistics 3. Monthly d. Indian Agriculture in brief 4. Quarterly”. This question is standard in competitive examination syllabi for Agricultural Economics.

Quasi autocorrelation is the correct answer to “Omitted explanatory variables will cause”. This question is standard in competitive examination syllabi for Agricultural Economics.

2 and 3 is the correct answer to “Consider the following statements : In the first zone of production function 1. The APP is increasing and then decreasing 2. The MPP is increasing and then decreasing 3. TPP is increasing 4. APP is decreasing Which of the above statements are correct”. This question is standard in competitive examination syllabi for Agricultural Economics.

Remains the same is the correct answer to “If the substitution ratio is less than the price ratio, then the cost”. This question is standard in competitive examination syllabi for Agricultural Economics.

Faridabad is the correct answer to “DMI headquarter is located at”. This question is standard in competitive examination syllabi for Agricultural Economics.

Yes is the correct answer to “Do the TC and the VC increase with increase in the output”. This question is standard in competitive examination syllabi for Agricultural Economics.

a-4, b-1, c-3, d-2 is the correct answer to “Match the following columns Column I Column II a. When MP = AP then 1. Ep > 1 b. When MP > AP then 2. Ep = 0 c. When MP < AP then 3. Ep < 1 d. When MP = 0 then 4. Ep = 1”. This question is standard in competitive examination syllabi for Agricultural Economics.

Farm book keeping is the correct answer to “Which one is not a tool of farm management”. This question is standard in competitive examination syllabi for Agricultural Economics.

Uttar Pradesh (Muradabad and Gorakhpur), Haryana (Bhiwani), Rajasthan (Jaipur) and Paschim Banga (Malda) is the correct answer to “First of all five RRBs were established in”. This question is standard in competitive examination syllabi for Agricultural Economics.

Zero is the correct answer to “On the ridge lines, MPP of input, will be”. This question is standard in competitive examination syllabi for Agricultural Economics.

42.98% is the correct answer to “Total female literacy rate in Uttar Pradesh on the basis of 2001 Census was”. This question is standard in competitive examination syllabi for Agricultural Economics.

Total assets/total liabilities is the correct answer to “The net capital ratio is equal to”. This question is standard in competitive examination syllabi for Agricultural Economics.

Highest negative value is the correct answer to “In maximizing returns interaction, the out going column will be located with the help of”. This question is standard in competitive examination syllabi for Agricultural Economics.