Economics MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15 Section 16

1.
One common definition of luxury goods is goods with an income elasticity

A. greater than one

B. equal to one

C. less than one but more than zero

D. none of these

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2.
Which of the following is the best example of Agreement between oligopolists?

A. GATT

B. OPEC

C. WTO

D. UNIDO

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3.
When with a change in price the total outlay on a commodity remains constant, it is a case of

A. perfect elasticity

B. perfect inelasticity

C. unit elasticity

D. zero elasticity

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4.
Match the following.

List-I List-II

a. Large number of seller with identical products 1. Monopolistic competition

b. Large number of seller with differentiated products 2. Oligopoly

c. Single seller with single buyer 3. Bilateral monopoly

d. Few sellers 4. Perfect competition

A. a-1, b-2, c-3, d-4

B. a-4, b-1, c-3, d-2

C. a-4, b-2, c-3, d-1

D. a-1, b-4, c-3, d-2

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5.
The short-run production function for a firm is as follows
Q = -L³ + 15L² + 10L
Where Q denotes total output in physical units and L denotes units of labour which are homogeneous, but are not perfectly divisible and change in labour does not tend to become zero.
Statement I In this production function, the marginal product of 5^th unit of labour is 85.
Statement II Similarly, in this production function, the average product of the 5^th unit of labour is 60.

A. Both the statements are true

B. Both the statements are false

C. Statement I is true, while Statement II is false

D. Statement I is false, but Statement II is true

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6.
Monopolists prefer to sell the products in the markets with

A. Elastic demand

B. Unitary elastic demand

C. Inelastic demand

D. Absence of elasticity of demand

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7.
Which of the following statement is correct?

A. Law of variable proportion will not apply, if there is an improvement in the technology

B. Product obtained from the additional factor of production is termed as average product

C. If marginal product goes on increasing it should be understood that the law of constant returns is applying

D. Modern economies have propounded the law of increasing return

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8.
A natural monopoly refers to a monopoly that is defended from the direct competition by

A. Economies of scale over a broad range of output

B. Government franchise

C. Control over vital input

D. Patent or copyright

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9.
The term optimum allocation on consumer's expenditure on various goods and services is used in

A. Giffen paradox

B. Law of demand

C. Law of diminishing MU

D. Law of equi-marginal utility

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10.
Which factor price can become zero?

A. Interest

B. Salary of the manager where there are losses

C. Profit

D. Wages in depression

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Large number of seller with identical products	1. Monopolistic competition
b. Large number of seller with differentiated products	2. Oligopoly
c. Single seller with single buyer	3. Bilateral monopoly
d. Few sellers	4. Perfect competition

Economics MCQ Questions and Solutions with Explanations | Commerce

1. One common definition of luxury goods is goods with an income elasticity

Answer & Solution

2. Which of the following is the best example of Agreement between oligopolists?

Answer & Solution

3. When with a change in price the total outlay on a commodity remains constant, it is a case of

Answer & Solution

4. Match the following. List-I List-II a. Large number of seller with identical products 1. Monopolistic competition b. Large number of seller with differentiated products 2. Oligopoly c. Single seller with single buyer 3. Bilateral monopoly d. Few sellers 4. Perfect competition

Answer & Solution

Answer & Solution

6. Monopolists prefer to sell the products in the markets with

Answer & Solution

7. Which of the following statement is correct?

Answer & Solution

8. A natural monopoly refers to a monopoly that is defended from the direct competition by

Answer & Solution

9. The term optimum allocation on consumer's expenditure on various goods and services is used in

Answer & Solution

10. Which factor price can become zero?

Answer & Solution

Read More Section(Economics)

1.
One common definition of luxury goods is goods with an income elasticity

2.
Which of the following is the best example of Agreement between oligopolists?

3.
When with a change in price the total outlay on a commodity remains constant, it is a case of

4.
Match the following.

List-I List-II

a. Large number of seller with identical products 1. Monopolistic competition

b. Large number of seller with differentiated products 2. Oligopoly

c. Single seller with single buyer 3. Bilateral monopoly

d. Few sellers 4. Perfect competition

6.
Monopolists prefer to sell the products in the markets with

7.
Which of the following statement is correct?

8.
A natural monopoly refers to a monopoly that is defended from the direct competition by

9.
The term optimum allocation on consumer's expenditure on various goods and services is used in

10.
Which factor price can become zero?