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-8

In which market competition is associated with 'Kinky Demand Curve'?

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

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Answer & Solution

Answer: Option A

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Lerner's index of monopoly power is

A) Both A and B B) $$\frac{{P - mc}}{P}$$ C) $$\frac{1}{E}$$ D) None of the above

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Answer & Solution

Answer: Option C

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A monopolist charges discriminating prices

A) to dispose of defective goods B) to save on taxes C) to take full advantage of differences in inelasticities of demand for his product in different markets/uses D) to feat another monopolist in the same product

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Answer & Solution

Answer: Option C

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Reasons for change in demand (increase or decrease in demand) are

A) change income of consumer B) change in population C) change in fashion and customs D) All of the above

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Answer & Solution

Answer: Option D

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Which of the following statements is not correct?

A) The short-run supply curve of the firm is that portion of its marginal cost curve which lies above its average variable cost curve B) The short-run supply curve of the firm is that portion of its marginal cost curve which lies above its average cost curve C) The short-run supply curve of the industry cannot be downward sloping D) The short-run supply curve of the industry can shift upward or downward

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Answer & Solution

Answer: Option B

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A measure of the responsiveness of quantity demanded to changes in the price of a related good is known as

A) Cross Elasticity of Demand B) Substitution Elasticity of Demand C) Complementary Elasticity of Demand D) Price Elasticity of Demand

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Answer & Solution

Answer: Option A

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If government expenditure is increased by Rs. 700 and tax is also increased by Rs. 700 then the equilibrium level of income:

A) Rs. 700 will decrease B) Rs. 700 will increase C) Will no change D) Will increase by Rs. 1400

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Answer & Solution

Answer: Option C

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Which of the following is a correct statement?

A) Decrease in input prices causes a leftward shift in the supply curve B) The demand for a commodity is inversely related to the price of its substitutes C) The desire for a commodity backed by ability and willingness to pay is demanded D) When income increases demand for essential goods increases more than proportionately

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Answer & Solution

Answer: Option C

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The market period supply curve for perishable commodities is

A) relatively inelastic B) perfectly inelastic C) relatively elastic D) perfectly elastic

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Answer & Solution

Answer: Option B

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Assertion (A): Auto companies and other consumer goods companies offer cash rebates to encourage purchase of the manufacturer's products within a specified period
Reason (R): The same product is priced differently at different times.
In the context of the two statements above to pricing strategy, which one of the following options is correct?

A) Both (A) and (R) are correct B) Both (A) and (R) are not correct C) (A) is correct but (R) is not correct D) (A) is not correct but (R) is correct

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Answer & Solution

Answer: Option C

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