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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-9 section-3

Each section contains 100 MCQs on Economics .
81
In a typical demand schedule, quantity demanded
Discuss
Answer & Solution
Answer: Option C
Solution:
In a typical demand schedule, quantity demanded varies inversely with price. The law of demand states that a higher price typically leads to a lower quantity demanded.
82
When the perfectly competitive firm and industry are in long run equilibrium, then
Discuss
Answer & Solution
Answer: Option D
Solution:
When the perfectly competitive firm and industry are in long run equilibrium, then P = MR = SAC = LAC,
D = MR = SMC = LMC and,
P = MR = Lowest point on the LAC curve.
83
In monopoly, the relationship between average and marginal revenue curves is as follows
Discuss
Answer & Solution
Answer: Option A
Solution:
In monopoly, the relationship between average and marginal revenue curves is that AR curve lies above the MR curve.
84
The total effect of a price change of a commodity is
Discuss
Answer & Solution
Answer: Option B
Solution:
The total effect of a price change of a commodity is substitution effect plus income effect. The income effect is the change in consumption patterns due to a change in purchasing power. This occurs with income increases, price changes, and even currency fluctuations. Since income is not a good in and of itself (it can only be exchanged for goods and services), price decreases increase purchasing power.
85
The following are some of the costs of a clothing manufacturer. State which among them will you consider as fixed cost?
Discuss
Answer & Solution
Answer: Option C
Solution:
Depreciation on machines owing to time is considered as fixed cost. Depreciation is a fixed cost, because it recurs in the same amount per period throughout the useful life of an asset. Depreciation cannot be considered a variable cost, since it does not vary with activity volume. However, there is an exception.
86
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as
Discuss
Answer & Solution
Answer: Option A
Solution:
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as Explicit cost. An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, where no actual payment is made.
87
Supply of a commodity is a
Discuss
Answer & Solution
Answer: Option B
Solution:
Supply of a commodity is a flow concept. the commodity which the sellers or producers are able and willing to offer for sale at a particular price, during a certain period of time.
88
If two goods were perfect substitutes of each other, it necessarily follows that
Discuss
Answer & Solution
Answer: Option B
Solution:
If two goods were perfect substitutes of each other, it necessarily follows that an indifference curve relating the two goods will be linear. As price rises for a fixed money income, the consumer seeks the less expensive substitute at a lower indifference curve.
89
The MC curve cuts the AVC and ATC curves at
Discuss
Answer & Solution
Answer: Option C
Solution:
The MC curve cuts the AVC and ATC curves at their respective minimas.
90
Giffen goods are those goods
Discuss
Answer & Solution
Answer: Option A
Solution:
Giffen goods are those goods for which demand increases as price increases. A Giffen good has an upward-sloping demand curve, which is contrary to the fundamental law of demand, which states that the quantity demanded for a product falls as the price increases, resulting in a downward slope for the demand curve.