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-7 section-14

Which of the following types of firms are likely to be monopolistic competitors?

A) Local telephone company B) Automobile manufacturer C) Restaurant D) All of the above

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Answer & Solution

Answer: Option C

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Which two of the following statements are correct?
I. In the short - run, ∆TFC = 0, therefore ∆TC = ∆TVC
II. If decrease in AFC < increase in AVC, then AC decreases
III. If decrease in AFC = increase in AVC, AC remains constant
IV. If decrease in AFC > increase in AVC, then AC increases
Choose the correct answer from the options given below

A) I and III B) II and III C) II and IV D) I and IV

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Answer & Solution

Answer: Option A

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A market demand schedule for a product indicates that

A) As the product's price falls, consumers buy less of the good B) There is a direct relationship between price and quantity demanded C) As a product's price rises, consumers buy less of other goods D) There is an inverse relationship between price and quantity demanded

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Answer & Solution

Answer: Option D

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Which among the following is not a correct combination?

A) Industrial Policy - 1948 B) Industrial Policy Statement - 1977 C) Industrial Policy Statement - 1980 D) Industrial Policy Statement - 1991

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Answer & Solution

Answer: Option D

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Assertion (A) The quantity of a commodity demanded invariably changes inversely to changes in its price.
Reason (R) The price effect is the net result of the positive substitution effect and negative income effect.

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

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Answer & Solution

Answer: Option A

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Which of the following statement is true?

A) In inferior goods, the income and substitution effects are negative B) In inferior goods, the income and substitution effects are positive C) In case of inferior goods, the income effect is negative although the substitution effect is positive D) In case of inferior goods, the income effect is positive although the substitution effect is negative

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Answer & Solution

Answer: Option C

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Which of the following is correct in regards to imperfect competition?

A) AR curve is horizontal straight line parallel to X-axis B) MR curve is equal to AR curve C) MR curve is higher than AR curve D) MR curve depends upon the elasticity of AR curve

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Answer & Solution

Answer: Option D

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The increasing returns to scale can be explained in terms of

A) External and internal economies B) External and internal diseconomies C) External economics and internal diseconomies D) All of the above

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Answer & Solution

Answer: Option A

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In the short run, the supply curve of a competitive firm is

A) the rising portion of the marginal cost curve lying above the minimum point of the average variable cost curve B) the falling portion of the marginal cost curve lying before the minimum point of the average variable cost curve C) the rising portion of the marginal cost curve after the highest point of total cost curve D) None of the above

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Answer & Solution

Answer: Option A

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The time duration of Fourth Five Year Plan in our country was

A) 1966-71 B) 1969-74 C) 1970-75 D) 1967-72

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Answer & Solution

Answer: Option B

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