Economics MCQ Questions and Solutions with Explanations

Economics MCQ Questions and Solutions with Explanations | Commerce

Economics MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Economics MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-10 section-8

Adam Smith spoke about the famous diamond water paradox to show that

A) utility is related to supply B) utility could be the cause of value C) utility is related to demand D) utility could not be the cause of value

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Answer & Solution

Answer: Option A

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Income elasticity of demand is positive for all persons for-

A) inferior goods B) giffen goods C) capital goods D) normal goods

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Answer & Solution

Answer: Option D

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The elasticity of demand for luxury good is

A) Infinite B) More than One C) Less than One D) Equal to One

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Answer & Solution

Answer: Option A

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Market Failure may NOT arise in the case of

A) increasing returns to scale B) public goods C) the consumption externalities D) income inequalities

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Answer & Solution

Answer: Option C

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The cross elasticity of demand is

A) $$\frac{{{\text{Proportional change in the price of commodity X}}}}{{{\text{Proportional change in the demand of commodity Y}}}}$$ B) $$\frac{{{\text{Proportional change in the demand of commodity X}}}}{{{\text{Proportional change in the demand of commodity Y}}}}$$ C) $$\frac{{{\text{Proportional change in the demand of commodity X}}}}{{{\text{Proportional change in the price of commodity Y}}}}$$ D) All the statements are correct

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Answer & Solution

Answer: Option C

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The rent earned by a factor of production is equal to

A) This product can earn in the next best use B) The sum of this output accrues in its present use and what it can earn in its next best use C) His present earnings D) The difference between what this factor is currently earning and what this factor can obtain in its next best use

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Answer & Solution

Answer: Option D

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Which one among the following is not the salient feature of industrial policy since 1991?

A) Enormous expansion of the private sector B) Redefining the role of public sector C) Limited exposure of Indian industry to foreign competition D) Pruning of the list of items reserved for SSI units

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Answer & Solution

Answer: Option C

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Average cost is equal to marginal cost at the point where

A) Average cost is the lowest B) Marginal cost is the lowest C) Marginal cost is falling D) None of the above

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Answer & Solution

Answer: Option A

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When the MC of a monopolist is Rs. 6 and price is Rs. 10, the degree of monopoly will be measured as-

A) 0.4 B) 6.0 C) 0.6 D) 4.0

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Answer & Solution

Answer: Option A

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100

Efficient allocation of resources to the maximum extent that can be achieved:

A) In Oligopoly B) In Monopoly C) In monopolistic competition D) In perfect competition

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Answer & Solution

Answer: Option D

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