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-1 section-12

The fixed costs of a firm
1. are fixed only in the short period.
2. when expressed as an average, do not change with output.
3. do not reflect diminishing marginal returns.
Select the correct answer

A) Both 1 and 2 B) Both 1 and 3 C) Only 2 D) Both 2 and 3

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Answer & Solution

Answer: Option B

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Which one of the following statement is correct?

A) Monopolist charges the maximum possible price B) Monopolist always makes (economic) profit C) Monopolist operates on an inelastic demand curve D) None of the above

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Answer & Solution

Answer: Option A

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Which of the following is necessary for a natural monopoly?

A) Economies of scale B) A high proportion of the total cost is the cost of capital goods C) The market is very small D) All of the above

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Answer & Solution

Answer: Option D

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The industry supply curve under perfect competition (when revenue prices are constant and there are no external economies and diseconomies)

A) Average cost is derived from the vertical sum of the curves B) Average cost is derived from the horizontal sum of the curves C) Marginal cost is derived from the vertical sum of the curves D) Marginal cost is derived from the horizoinrtal sum of the curves

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Answer & Solution

Answer: Option B

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If it is assumed that there is no government or foreign sector and the marginal rate of consumption is 0.8, then the value of the multiplier will be

A) 0.2 B) 0.8 C) 1.25 D) 5

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Answer & Solution

Answer: Option D

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To calculate the elasticity of demand which of the following formula is used

A) $$\frac{{{\text{Percentage change in demand}}}}{{{\text{Original demand}}}}$$ B) $$\frac{{{\text{Proportionate change in demand}}}}{{{\text{Proportionate change in price}}}}$$ C) $$\frac{{{\text{Change in demand}}}}{{{\text{Change in price}}}}{{ \div }}\frac{{{\text{Original demand}}}}{{{\text{Original price}}}}$$ D) $$\frac{{{\text{Change in demand}}}}{{{\text{Change in price}}}}$$

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Answer & Solution

Answer: Option B

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When AR is constant, MR is

A) equal to AR B) less than AR C) more than AR D) equal to zero

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Answer & Solution

Answer: Option A

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Profit is denoted with which of the following symbol?

A) Sigma B) Summation C) Pie D) Alpha

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Answer & Solution

Answer: Option C

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If an increase in the price of blue jeans causes on increase in the demand for tennis shoes, then what types of goods are blue jeans and tennis shoes

A) Complementary goods B) Inferior goods C) Best goods D) Replacement goods

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Answer & Solution

Answer: Option D

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If the percentage increase in the quantity of a commodity demanded is smaller than the percentage fall in its price, elasticity of demand is

A) > 1 B) = 1 C) < 1 D) zero

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Answer & Solution

Answer: Option C

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