Economics MCQ Questions and Solutions with Explanations

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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-9

Each section contains 100 MCQs on Economics .

Assertion (A) In long run under perfect competition, all firms invariably get only normal profit.
Reason (R) All firms incur minimum average cost and incur no selling cost due to absence of product differentiation.

A) (A) and (R) both are true B) (A) is true, but (R) is false C) (A) is false, but (R) is true D) (A) and (R) both are false

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

General price is that value which has no possibility of being established in the long run. This statement is

A) Correct B) Wrong C) Uncertain D) None of these

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

If coffee and tea are substitutes, what is the cross-price elasticity of demand for coffee with respect to the price of tea?

A) It is greater than 1 B) It is negative C) It is a positive D) They are both inferior goods

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

The market efficiency can be improved even without any policy intervention, starting with monopolistic equilibrium

A) By levying tax per unit of production B) By levying sales tax per unit C) By levying profit tax D) By imposing a price ceiling below the current equilibrium price

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

Match the following.

List-I	List-II
a. Cardinal approach	1. Marginal utility
b. Ordinal approach	2. Revealed preference theory
c. Hicks-Allen approach	3. Indifference curve
d. Consumer's surplus	4. Alfred Marshall

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

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

When there is a very small change in the price of a commodity, i.e. there is a negligible change and there is a high change in the demand, then what is the demand for such a commodity?

A) Perfectly elastic demand B) Perfectly inelastic demand C) Relatively inelastic demand D) Relatively elastic demand

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

The important determinant of market size is

A) Monetary spread B) Opportunities for the investors C) Productivity D) Savings

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Marginal cost curve cuts the average cost curve from below at

A) its lowest point B) the left of the lowest point C) right of the lowest point D) All of the above

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. Assuming no other changes, the sales the business can now expect each month will be:

A) 8,500 B) 10,500 C) 11,000 D) 11,500

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Hicks substitution effect for a fall in the price of a commodity, other things remaining constant, is given by

A) a movement up a given indifference curve B) a movement down a given indifference curve C) a movement from a lower to a higher indifference curve D) a movement from a higher to a lower indifference curve

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

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Economics MCQ Questions and Solutions with Explanations | Commerce