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-5

Which among the following is not a property of indifference curves?

A) Indifference curves cannot intersect each other B) Every point of an indifference curve shows equal satisfaction C) Indifference curves are, always concave to the origin D) Indifference curves do not touch the axis

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Answer & Solution

Answer: Option C

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Long run equilibrium price of a perfectly competitive firm is always

A) above the LAC B) below the LAC C) equal to AFC D) equal to LAC

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Answer & Solution

Answer: Option D

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Assertion (A): The imposition of a per unit tax causes the monopolist's average cost and marginal cost curves to shift up.
Reason (R): The per unit tax is like a variable cost.

A) Both A and R are true and R is the correct explanation of A B) Both A and R are true, but R is not a correct explanation of A C) A is true, but R is false D) A is false, but R is true

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Answer & Solution

Answer: Option A

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Classical writers could not resolve the 'water-diamond' paradox because they could not distinguish between

A) AU from MU B) MU from TU C) AU from TU D) MU from MC

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Answer & Solution

Answer: Option B

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A firm encountering economies of scale over some range of output will have a

A) Rising long-run average cost curve B) Falling long-run average cost curve C) Constant long-run average cost curve D) Rising, then falling, then rising long-run average cost curve

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Answer & Solution

Answer: Option A

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Statement (A): The isoquant curves are drawn convex to the origin due to the diminishing technical rate of substitution.
Statement (B): The lesser the convexity of the isoquant curve, the greater the possibility of the complementarity of the two inputs.

A) Statement (A) and (B) are correct B) Statement (A) is correct but (B) is incorrect C) Statement (A) is incorrect but (B) is correct D) Statement (A) and (B) are incorrect

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Answer & Solution

Answer: Option B

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When the demand curve is a rectangular hyperbola, a fall in the price of a commodity causes total expenditures on the commodity to

A) increase B) decrease C) remain unchanged D) None of these

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Answer & Solution

Answer: Option C

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Assertion (A): Utility will be maximized when the marginal units of expenditure in each direction bring the same increment of utility.
Reason (R): A consumer will try to maximize his utility.

A) Both (A) and (R) are true B) Both (A) and (R) are false C) (A) is true but (R) is false D) (A) is false but (R) is true

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Answer & Solution

Answer: Option A

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If the quantity of a commodity demanded remains unchanged as its price changes the coefficient of price elasticity of demand is

A) greater than one B) equal to one C) less than one D) zero

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Answer & Solution

Answer: Option D

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A production possibility curve indicates the

A) allocation of the supply of commodities among the members of a community B) efficiency with which a community's resources are used to satisfy its wants C) attainable combinations of commodities for a community using all its available resources D) quantities in which a community decides to produce various commodities

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Answer & Solution

Answer: Option C

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