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-5 section-16

Which is not a fixed cost?

A) Monthly rent of Rs. 1,000 contractually specified in a one-year lease B) An insurance premium of Rs. 50 per year, paid last month C) An attorney's retainer of Rs. 50,000 per year D) A worker wage is Rs. 15 per hour

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Answer & Solution

Answer: Option B

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When marginal utility is negative, then total utility

A) increases B) decreases C) is zero D) is negative

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Answer & Solution

Answer: Option B

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Income elasticity of demand with respect to inferior goods will be:

A) Positive B) Zero C) Negative D) Infinite

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Answer & Solution

Answer: Option C

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The Marshallian utility analysis is on the basis of a less valid assumption of

A) Cardinal measurability of the utility B) Given marginal utility of money C) Diminishing marginal utility of the goods D) Additivity of the utility

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Answer & Solution

Answer: Option B

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Match the following theories of profit with their propounders

Theory	Propounder
a. Profit as Rent of Ability	1. F. B. Hawley
b. Dynamic Theory of Profit	2. Joseph A. Schumpeter
c. Risk Theory of Profit	3. J. B. Clark
d. Innovation Theory of Profit	4. F. A. Walker

A) a-4, b-2, c-3, d-1 B) a-1, b-2, c-3, d-4 C) a-4, b-3, c-1, d-2 D) a-3, b-1, c-2, d-4

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Answer: Option C

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The average cost curve of a firm will be

A) Straight line B) Circular C) Parabola D) Rectangular hyperbola

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Answer: Option D

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The essence of the deductive method which is often employed in economic investigation is

A) the re-statement in quantitative terms of general laws relating to production B) the development of particular conclusions from a number of accepted general principles C) the assessment of economic performance in terms of utility and price D) the drawing of general conclusions from a number of particular instances

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Answer: Option B

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Suppose that output (Y) is a function of capital (K); then the capital-elasticity of output is given by

A) $$\frac{{M{P_k}}}{{A{P_k}}}$$ B) $$\frac{{A{P_k}}}{{M{P_k}}}$$ C) $$\frac{Y}{K}$$ D) None of these

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Answer & Solution

Answer: Option A

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According to Schumpeter

A) Monopolies are inefficient B) Monopoly profit acts as incentives for innovation C) Monopolies are allocatively efficient D) Monopolies are productively efficient

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Answer & Solution

Answer: Option B

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The demand for life-saving drugs is

A) Elastic B) Inelastic C) Infinity D) None of the above

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Answer & Solution

Answer: Option B

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