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-8 section-9

In perfect competition, when a firm is in short periods, for equilibrium, the following condition does apply
1. Marginal cost must equal marginal revenue.
2. Average cost must equal average revenue.
3. Marginal revenue must equal average revenue.
4. Marginal cost must equal average cost.

A) 1, 2 and 3 B) 1 and 3 C) 2, 3 and 4 D) Only 3

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Answer & Solution

Answer: Option B

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MRTP ACT came into force on:

A) 5^th September, 1966 B) 3^rd April, 1964 C) 1^st June, 1970 D) 10^th June, 1982 E) 25^th December, 1988

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Answer: Option C

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Which one of these is an exception to the law of demand?

A) Demonstration effect goods B) Giffen goods C) Future scarcity of goods D) All of the above

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Answer: Option D

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The production possibility curve is based on

A) Contract curve in the Marshall Edgeworth input box B) Contract curve in the Marshall Edgeworth output box C) Social Welfare Function D) Price-Ratio Line

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Answer & Solution

Answer: Option A

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The statement that "economics is positive and not normative" means

A) that economics can be used to prove that capitalism is better than socialism B) that economics tells us what kind of economic behaviour or policy is wholesome and what evil C) that economics tells policy makers which alternative to choose from among several efficient ones D) that economics can only indicate consequences of policies, choices, or conditions

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Answer: Option D

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When supply of money declines, then price of goods:

A) increases B) decreases C) remains constant D) None of the above

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Answer & Solution

Answer: Option B

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As a consumer increases his consumption of a commodity, the total utility he derives from its consumption increases but at a diminishing rate. This is

A) a statement of fact B) an economic law C) a hypothesis D) None of these

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Answer: Option C

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The 'law of diminishing returns' can apply to a business only when:

A) All factors of production can be varied B) At least one factor of production is fixed C) All factors of production are fixed D) Capital used in production is fixed

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Answer: Option B

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Cardinal utility analysis of consumer's behaviour is based on which combination of the following assumptions:
I. Utility is measurable is terms of cardinal numbers
II. Constancy of the marginal utility of money
III. Utilities of different goods are interdependent
IV. Gossen's first law of consumption
Choose the correct answer

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

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Answer & Solution

Answer: Option B

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Price discrimination is profitable and possible if the two markets have

A) Equal elasticity of demand B) Different elasticity of demand C) Inelastic demand D) Highly elastic demand

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Answer & Solution

Answer: Option B

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