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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-2 section-1

Each section contains 100 MCQs on Economics .
11
The economist's objections to monopoly rest on which of the following grounds?
Discuss
Answer & Solution
Answer: Option D
Solution:
The economist's objections to monopoly rest on the following grounds that there is a transfer of income from consumers to the monopolist and there is welfare loss as resources tend to be misallocated under monopoly.
12
In which of the following market structure is the degree of control over the price of its product by a firm very large?
Discuss
Answer & Solution
Answer: Option C
Solution:
In Monopoly market structure the degree of control over the price of its product by a firm very large. In a monopoly type of market structure, there is only one seller, so a single firm will control the entire market. It can set any price it wishes since it has all the market power. Consumers do not have any alternative and must pay the price set by the seller.
13
The offer curves introduced by Alfred Marshall, helps us to understand how the ___ is established in international trade.
Discuss
Answer & Solution
Answer: Option A
Solution:
The offer curves introduced by Alfred Marshall, helps us to understand how the terms of trade is established in international trade. An offer curve shows how the volumes traded change when the terms of change.
14
Demand for factors of production is
Discuss
Answer & Solution
Answer: Option A
Solution:
Demand for factors of production is derived demand. The demand for any factor of production, such as labor, physical capital or land is a derived demand because it arises not from the intrinsic utility provided by the factor but because of the value placed on the production it produces by consumers.
15
The producer's demand for a factor of production is governed by the ____ of the factor.
Discuss
Answer & Solution
Answer: Option B
Solution:
The producer's demand for a factor of production is governed by the marginal productivity of the factor.
16
Under conditions of perfect competition in the product market
Discuss
Answer & Solution
Answer: Option A
Solution:
Under conditions of perfect competition in the product market MRP = VMP. Under the assumption of perfect competition a firm employs a factor up to that number at which the price of the factor is just equal to the value of the marginal product (=MRP of the factor).
17
Which statistical measure helps in measuring the purchasing power of money?
Discuss
Answer & Solution
Answer: Option B
Solution:
Index numbers statistical measure helps in measuring the purchasing power of money. Index numbers possess much practical importance in measuring changes in the cost of living, production trends, trade, income variations, etc.
18
Fisher's ideal index number is
Discuss
Answer & Solution
Answer: Option C
Solution:
Fisher's Ideal volume index is the geometric mean of the Laspeyres and Paasche volume indices. A measure of change in volume from period to period. It is calculated as the geometric mean of a chain Paasche volume index and a chain Laspeyres volume index.
19
Which among the following statement is INCORRECT?
Discuss
Answer & Solution
Answer: Option D
Solution:
A floating exchange rate is one that is determined by supply and demand on the open market. A floating exchange rate doesn't mean countries don't try to intervene and manipulate their currency's price, since governments and central banks regularly attempt to keep their currency price favorable for international trade.
20
Which among the following statement is INCORRECT?
Discuss
Answer & Solution
Answer: Option D
Solution:
Arthur Cecil Pigou succeeded Prof. Marshall as the Professor of Economics at the University of Cambridge. After Marshall, he became the leading neo classical economist. He is the founder of “Welfare Economics” His leading ideas on welfare economics are found in his “Economics of Welfare” (1920).