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-4 section-7

Extension and contraction of demand are result of

A) change in consumer's income B) change in consumer's tastes C) change in price D) none of these

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Answer & Solution

Answer: Option C

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The law of variable proportion is valid when

A) Only one input is fixed and all other inputs are kept variable B) All the factors are kept constant C) All the inputs vary in the same proportion D) None of the above

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Answer & Solution

Answer: Option A

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The finance commission is organized every

A) Three years B) Six years C) Four years D) Five years

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Answer & Solution

Answer: Option D

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Barriers to entry are highest, in which two types of markets?

A) Differentiated competition and oligopoly B) Perfect competition and differentiated competition C) Monopoly and differentiated competition D) Oligopoly and monopoly

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Answer & Solution

Answer: Option D

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Consider the following statements.
1. MP is also called MPP.
2. Physical product refers to production as measured in terms of physical units of the commodity.
3. TP increases even when MP is decreasing.
Which of the statement(s) given above is/are correct?

A) Only 1 B) Both 2 and 3 C) Both 1 and 2 D) All of the above

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Answer & Solution

Answer: Option D

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Marginal revenue is equal to the price for which one of the following types of market structure?

A) Monopoly B) Perfect competition C) Monopolistic competition D) Oligopoly

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Answer & Solution

Answer: Option B

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Which of the following statements summarizes Robbins definition?

A) "Economics is the subject concerned with the discovery of the nature and causes of the wealth of nations" B) "Economics is the study of the ordinary business of human life" C) "Economics is the science of finite" D) "Economics is the study of the allocation of scarce resources and the determination of employment, income and economy development"

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Answer & Solution

Answer: Option D

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What is the elasticity of demand for luxury items like high-class furniture?

A) Unit Elastic B) Highly-Elastic C) Fairly Elastic D) Zero Elastic

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Answer & Solution

Answer: Option B

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We may define economics as a study of the problems arising from

A) the distribution of very scarce goods B) production, distribution and exchange C) production and pricing of durable commodities D) exchange of services for money

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Answer & Solution

Answer: Option B

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Assertion (A): Long run equilibrium of the industry in a perfectly competitive market occurs at the point where price equals minimum long run average cost.
Reason (R): In this position of zero economic profit, there is no tendency on the part of any existing firm to stage an exit, and no potential entrant wants to enter the industry.

A) Both A and R are individually true and R is the correct explanation of A B) Both A and R are individually true, but R is not the correct explanation of A C) A is true, but R is false D) A is false, but R is true

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Answer & Solution

Answer: Option A

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