Economics Questions MCQs

Total Questions : 406

Page 1 of 21 pages
Question 1. The capital that is consumed by an economy or a firm in the production process is known as
  1.    Capital loss
  2.    Production cost
  3.    Dead-weight loss
  4.    Depreciation
Answer: Option D
Question 2. Who propounded the opportunity cost theory of international trade?
  1.    Ricardo
  2.    Marshall
  3.    Heckscher & Ohlin
  4.    Haberler
Answer: Option D
Question 3. Which among the following statement is INCORRECT?
  1.    On a linear demand curve, all the five forms of elasticity can be depicted
  2.    If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
  3.    If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
  4.    The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
Answer: Option C
Question 4. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to
  1.    Increase
  2.    Decrease
  3.    Remain the same
  4.    Become zero
Answer: Option A
Question 5. The horizontal demand curve parallel to x-axis implies that the elasticity of demand is
  1.    Zero
  2.    Infinite
  3.    Equal to 1
  4.    Greater than zero but less than infinity
Answer: Option B
Question 6. An individual demand curve slopes downward to the right because of the
  1.    Working of the law of diminishing marginal utility
  2.    Substitution effect of decrease in price
  3.    Income effect of fall in price
  4.    All of the above
Answer: Option D
Question 7. Income elasticity of demand is defined as the responsiveness of
  1.    Quantity demanded to a change in income
  2.    Quantity demanded to a change in price
  3.    Price to a change in income
  4.    Income to a change in quantity demanded
Answer: Option A
Question 8. The supply of a good refers to
  1.    Stock available for sale
  2.    Total stock in the warehouse
  3.    Actual production of the good
  4.    Quantity of the good offered for sale at a particular price per unit of time
Answer: Option D
Question 9. The cost of one thing in terms of the alternative given up is called
  1.    Real cost
  2.    Production cost
  3.    Physical cost
  4.    Opportunity cost
Answer: Option D
Question 10. Assume that consumer's income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certaintty that the equilibrium
  1.    Price will decrease
  2.    Price will increase
  3.    Quantity will decrease
  4.    Quantity will increase
Answer: Option C
Question 11. The economist's objections to monopoly rest on which of the following grounds?
  1.    There is a transfer of income from consumers to the monopolist
  2.    There is welfare loss as resources tend to be misallocated under monopoly
  3.    Both A and B are incorrect
  4.    Both A and B are correct
Answer: Option D
Question 12. In which of the following market structure is the degree of control over the price of its product by a firm very large?
  1.    Imperfect competition
  2.    Perfect competition
  3.    Monopoly
  4.    In A and B both
Answer: Option C
Question 13. The offer curves introduced by Alfred Marshall, helps us to understand how the ___ is established in international trade.
  1.    Terms of trade
  2.    Equilibrium price ratio
  3.    Exchange rate
  4.    Satisfaction level
Answer: Option A
Question 14. The producer's demand for a factor of production is governed by the ____ of the factor.
  1.    Price will decrease
  2.    Marginal productivity
  3.    Availability
  4.    Profitability
Answer: Option B
Question 15. Demand for factors of production is
  1.    Derived demand
  2.    Joint demand
  3.    Composite demand
  4.    None of the above
Answer: Option A
Question 16. Under conditions of perfect competition in the product market
  1.    MRP = VMP
  2.    MRP > VMP
  3.    VMP > MRP
  4.    None of the above
Answer: Option A
Question 17. Fisher's ideal index number is
  1.    Arithmetic mean of Laspeyre's and Paasche's index
  2.    Harmonic mean of Laspeyre's and Paasche's index
  3.    Geometric mean of Laspeyre's and Paasche's index
  4.    None of the above
Answer: Option C
Question 18. Which statistical measure helps in measuring the purchasing power of money?
  1.    Arithmetic average
  2.    Index numbers
  3.    Harmonic mean
  4.    Time series
Answer: Option B
Question 19. Which among the following statement is INCORRECT?
  1.    Floating exchange rate system works on the market mechanism
  2.    Floating exchange rate breeds uncertainties and speculation
  3.    Economic and political factors and value judgement influence the choice of the exchange rate system
  4.    The system of floating exchange rate requires comprehensive government intervention
Answer: Option D
Question 20. Which among the following statement is INCORRECT?
  1.    Welfare economics is based on value judgements
  2.    Welfare economics is also called 'economics with a heart'
  3.    Welfare economics focuses on questions about equity as well as efficiency
  4.    The founder of Welfare economics was Alfred Marshall
Answer: Option D

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