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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-2

Each section contains 100 MCQs on Economics .
11
An indifference curve slopes down towards right since more of one commodity and less of another result in
Discuss
Answer & Solution
Answer: Option A
Solution:
An indifference curve slopes down towards right since more of one commodity and less of another result in Same satisfaction.
12
In the context of oligopoly, the kinked demand curve hypothesis is designed to explain
Discuss
Answer & Solution
Answer: Option B
Solution:
In the context of oligopoly, the kinked demand curve hypothesis is designed to explain Price rigidity. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.
13
Profit is maximum when
Discuss
Answer & Solution
Answer: Option A
Solution:
Profit is maximum when TC and TR curves are parallel. Profit becomes maximum irrespective of the market situation, when the difference between total revenue (TR) and total cost (TC) becomes the greatest.
14
Supply curve will shift when
Discuss
Answer & Solution
Answer: Option D
Solution:
Supply curve will shift when Technology changes. Factors that can shift a supply curve either to the left or the right are changes in input prices, number of sellers, technology, social concerns and expectations.
15
The Revealed Preference Theory deduces the inverse price-quantity relationship from
Discuss
Answer & Solution
Answer: Option C
Solution:
The Revealed Preference Theory deduces the inverse price-quantity relationship from observed behavior of the consumer. Revealed preference theory asserts that the best way to measure consumer preferences is to observe their purchasing behavior.
16
Which form of market structure is characterised by interdependence in decision-making as between the different competing firms?
Discuss
Answer & Solution
Answer: Option A
Solution:
Oligopoly form of market structure is characterised by interdependence in decision-making as between the different competing firms. An oligopoly is a market form wherein a market or industry is dominated by a small number of large sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher prices for consumers. Oligopolies have their own market structure.
17
In monopoly and perfect competition, the cost curves are
Discuss
Answer & Solution
Answer: Option A
Solution:
In monopoly and perfect competition, the cost curves are same. In a monopoly, the price is set above marginal cost and the firm earns a positive economic profit. Perfect competition produces an equilibrium in which the price and quantity of a good is economically efficient.
18
If price changes by 1% and supply changes by 2%, then supply is
Discuss
Answer & Solution
Answer: Option A
Solution:
If price changes by 1% and supply changes by 2%, then supply is Elastic. The Price Elasticity of Supply (PES) for elastic and inelastic supply would be different. The PES for elastic supply would be greater than 1. This tells us that if prices were to increase (or decrease) by 1%, the quantity supplied would increase (or decrease) in a number greater than 1%.
19
An ISO-product slopes
Discuss
Answer & Solution
Answer: Option B
Solution:
An ISO-product slopes downward to the right. They slope downward because MTRS of labour for capital diminishes. When we increase labour, we have to decrease capital to produce a given level of output.
20
Which of the following is NOT the assumption of the Marginal Productivity Theory of Distribution?
Discuss
Answer & Solution
Answer: Option C
Solution:
All factors, except one, are variable is NOT the assumption of the Marginal Productivity Theory of Distribution.