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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-4 section-2

Each section contains 100 MCQs on Economics .
31
Which cost increases continuously with the increase in production?
Discuss
Answer & Solution
Answer: Option D
Solution:
Variable cost increases continuously with the increase in production. Variable cost varies at different level of output, this implies that when the output of a particular firm is at zero, the variable cost will be zero and when there is increase in production of output, there will also be a corresponding increase in the variable cost.
32
A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as
Discuss
Answer & Solution
Answer: Option B
Solution:
A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as Quasi-rent. The earnings from machines and instruments are termed as quasi-rent. The quasi-rent refers to the income produced when the demand for products increases suddenly.
33
A factor of production, whose supply is fixed in the short tun, may get additional earnings. These earnings are generally referred to as
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
34
The necessary condition for equilibrium position of a firm is
Discuss
Answer & Solution
Answer: Option C
Solution:
The necessary condition for equilibrium position of a firm is MC=MR. A firm is in equilibrium when it has no tendency to change its level of output. It needs neither expansion nor contraction. It wants to earn maximum profits in by equating its marginal cost with its marginal revenue, i.e. MC = MR.
35
In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm's supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is
Discuss
Answer & Solution
Answer: Option C
Solution:
In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm's supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is less elastic.
36
Which of the following cost curves is never U-shaped?
Discuss
Answer & Solution
Answer: Option D
Solution:
Average fixed cost curve is never U-shaped. The average fixed costs AFC curve is downward sloping because fixed costs are distributed over a larger volume when the quantity produced increases.
37
The classical theory explained interest as a reward for
Discuss
Answer & Solution
Answer: Option C
Solution:
The classical theory explained interest as a reward for Saving. According to the classical theory, interest is the price paid for saving of capital. Like the value of other things, the price of saving is determined by its demand for and supply of savings.
38
When a competitive firm achieves long run equilibrium, then,
Discuss
Answer & Solution
Answer: Option D
Solution:
When a competitive firm achieves long run equilibrium, then, P=MC, MR=MC and P=ATC.
39
What best explains a shift in market supply curve to the right?
Discuss
Answer & Solution
Answer: Option B
Solution:
A new technique makes it cheaper to produce the good best explains a shift in market supply curve to the right. A rightward shift in the supply curve, say from a new production technology, leads to a lower equilibrium price and a greater quantity.
40
Total costs in the short-term are classified into fixed costs and variable costs. Which one of the following is a variable cost?
Discuss
Answer & Solution
Answer: Option A
Solution:
Total costs in the short-term are classified into fixed costs and variable costs. Cost of raw material is a variable cost. Variable costs vary based on the amount of output, while fixed costs are the same regardless of production output.