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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-8 section-3

Each section contains 100 MCQs on Economics .
71
The average profit is the difference between
Discuss
Answer & Solution
Answer: Option C
Solution:
The average profit is the difference between AC and AR.
72
At the point of inflexion, the marginal product is
Discuss
Answer & Solution
Answer: Option C
Solution:
At the point of inflexion, the marginal product is maximum. Upto the Point of Inflexion TP has been increasing at increasing rate resulting in increasing MP.
73
Marginal revenue will be negative if elasticity of demand is
Discuss
Answer & Solution
Answer: Option A
Solution:
Marginal revenue will be negative if elasticity of demand is less than unity. At a quantity greater than ON price elasticity on the demand curve, curve is less than one and the marginal revenue is negative.
74
If lowering of fares reduces railway's revenues and increasing of fares increases, then the demand for rail travel has a price elasticity of
Discuss
Answer & Solution
Answer: Option B
Solution:
If lowering of fares reduces railway's revenues and increasing of fares increases, then the demand for rail travel has a price elasticity of Greater than Zero but less than One.
75
If the marginal (additional) opportunity cost is a constant then the PPC would be
Discuss
Answer & Solution
Answer: Option A
Solution:
If the marginal (additional) opportunity cost is a constant then the PPC would be Straight line. Ppc constant means goods are perfect substitute if they are perfect substitute then that curve is a straight line
76
If a good is a luxury, its income elasticity of demand is
Discuss
Answer & Solution
Answer: Option C
Solution:
If a good is a luxury, its income elasticity of demand is Positive and greater than 1. If income elasticity of demand of a commodity is less than 1, it is a necessity good. If the elasticity of demand is greater than 1, it is a luxury good or a superior good.
77
When ____, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productive efficiency.
Discuss
Answer & Solution
Answer: Option B
Solution:
When MC = AC, we know that the firms must be producing at the minimum point of the average cost curve and so there will be productive efficiency.
78
Suppose the demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering rasiing prices, it can expect a relatively
Discuss
Answer & Solution
Answer: Option A
Solution:
Suppose the demand for meals at a medium-priced restaurant is elastic. If the management of the restaurant is considering rasiing prices, it can expect a relatively large fall in quantity demanded.
79
Which of the following is not a characteristic of a 'price taker'?
Discuss
Answer & Solution
Answer: Option C
Solution:
Negatively sloped demand is not a characteristic of a 'price taker'. A price taker lacks enough market power. The objective of market to influence the prices of goods or services.
80
In monopolistic competition, a firm is in long run equilibrium
Discuss
Answer & Solution
Answer: Option B
Solution:
In monopolistic competition, a firm is in long run equilibrium is in the declining segment of the LAC curve.