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-8 section-13

Each section contains 100 MCQs on Economics .

In perfect competition,

A) short run abnormal profits are competed away by firms leaving the industry B) short run abnormal profits are competed away by firms entering the industry C) short run abnormal profits are competed away by the government D) short run abnormal profits are competed away by greater advertising

Discuss

Answer & Solution

Answer: Option B

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

Which of the following is not a U shaped curve

A) Average fixed cost curve B) Average variable cost curve C) Average total cost curve D) Marginal cost curve

Discuss

Answer & Solution

Answer: Option A

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

Investment multiplier can be derived from (symbols have simple meaning)

A) $$\frac{1}{{1 - \frac{{\Delta C}}{{\Delta S}}}}$$ B) $$\frac{1}{{1 - \frac{{\Delta C}}{{\Delta Y}}}}$$ C) $$\frac{1}{{1 + \frac{{\Delta C}}{{\Delta S}}}}$$ D) $$\frac{1}{{1 + \frac{{\Delta C}}{{\Delta Y}}}}$$

Discuss

Answer & Solution

Answer: Option B

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

The supply function will move downwards to the right, if the MC of all the firms in a perfectly competitive industry were to

A) decrease B) remain unchanged C) increase D) None of these

Discuss

Answer & Solution

Answer: Option C

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

If Q₁ = 20,000, Q₂ = 25,000, P₁ = Rs. 10, P₂ = Rs. 8 the price elasticity of demand will be proportionately to?

A) 1.20 B) 1.00 C) 1.25 D) 1.50

Discuss

Answer & Solution

Answer: Option C

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

The conditions of long period equilibrium for a firm operating under perfect competition are
1. MC = MR
2. AC = AR
3. AR = MR
4. AC = MC
Select the correct answer

A) Only 1 B) Both 1 and 3 C) 2, 3 and 4 D) All of the above

Discuss

Answer & Solution

Answer: Option D

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

Which among the following has the least price elasticity of demand?

A) Car B) Tea C) Salt D) House

Discuss

Answer & Solution

Answer: Option C

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

Imagine a country which has certain available resources and techniques. Assume that the country is producing two commodities A and B. Now if you draw a Production Possibility curve it will slope downwards. It will be

A) A convex curve B) A concave curve C) A straight line curve D) A rectangular hyperbola

Discuss

Answer & Solution

Answer: Option B

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

Generally, the profits are maximised in the short-run at the point at which

A) MC = MR B) MR = 0 C) MR is negative D) MC = 0

Discuss

Answer & Solution

Answer: Option A

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

Consider the demand curve depicted in the following diagram-
Economics mcq question image

The elasticities of demand at prices P₁ and P₂ are different because, at these prices

A) slopes are different B) prices are different C) quantities are different D) price-quantity ratios are different

Discuss

Answer & Solution

Answer: Option D

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

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Economics MCQ Questions and Solutions with Explanations | Commerce