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

11.
Which of the following will shift the supply curve for good X leftward?

A. A situation in which the quantity demanded exceeds the quantity supplied

B. An increase in the cost of the machinery to produce X

C. A decrease in the wages of workers employed to produce X

D. A technology improvement in the production of X

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12.
Which of the following is a characteristic of monopolistic competition?

A. Few sellers

B. A differentiated product

C. Easy entry into and exit from the industry

D. All of the above

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13.
What is the fundamental premise of economics?

A. Individuals are capable of establishing goals and acting in a manner consistent with achievement of those goals

B. Natural resources will always be scarce

C. Individuals choose the alternative for which they believe the net gains to be the greatest

D. No matter what the circumstances, individuals choice always involve a trade-off

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14.
Consider the following statements.
1. A profit maximising monopolist in different markets will adjust his sales in the two markets, so that his MR in each market just equals his MC.
2. A profit maximising monopolist in separate markets will not adjust his sales.
3. A profit maximising monopolist in separate markets will adjust his sales in the two markets, so that his MR in each market will greater than MC.
4. A profit maximising firm in separate markets will adjust his sales in each market so, that his MR is less than MC.
Which of the statement(s) given above is/are correct?

A. Both 1 and 4

B. Only 1

C. Only 4

D. Both 1 and 2

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15.
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

A. decrease, quantity demanded will decrease and quantity supplied will increase

B. decrease and quantity demanded and quantity supplied will both decrease

C. decrease, quantity demanded will increase and quantity supplied will decrease

D. increase, quantity demanded will decrease and quantity supplied will increase

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16.
The prices of two goods X and Y are: P_x = Rs. 5 and P_y = Rs. 3, respectively. If a consumer spending his entire income on these two commodities is at a point on the budget constraint where MRS_xy (marginal rate of substitution of X for Y) is 3 : 1, then

A. the total utility of the consumer is being maximised at this point

B. the total utility of the consumer will increase if he reallocates his expenditure leading to an increase in the amount of X and a reduction in the amount of Y

C. the total utility of the consumer will increase if he reduces his expenditure on both the commodities

D. the total utility of the consumer will increase if he reallocates his expenditure leading to an increase in the amount of Y and a reduction in the amount of X

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17.
The strategy of price discrimination is followed under which firm of market?

A. Monopoly

B. Monopolistic

C. Oligopoly

D. Both A and C

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18.
The term "consumer goods" is used by economists to refer to

A. goods produced for consumers in a free market only

B. goods, other than free goods, whose use directly satisfies consumer's wants

C. goods produced by consumers in return for a wage

D. goods which are used by consumers in order to earn their living

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19.
The difference between what a consumer is willing to pay for a unit of a good and what must be paid when actually buying it is called

A. producer surplus

B. consumer surplus

C. cost-benefit analysis

D. net utility

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20.
According to monetarists, the Great Depression in the United States largely resulted due to

A. Excessive import in relation to exports

B. Significant changes in technology and resources availability

C. Inappropriate monetary policy

D. Excessive export in relation to imports

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Economics MCQ Questions and Solutions with Explanations | Commerce

11. Which of the following will shift the supply curve for good X leftward?

Answer & Solution

12. Which of the following is a characteristic of monopolistic competition?

Answer & Solution

13. What is the fundamental premise of economics?

Answer & Solution

Answer & Solution

15. Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

Answer & Solution

16. The prices of two goods X and Y are: Px = Rs. 5 and Py = Rs. 3, respectively. If a consumer spending his entire income on these two commodities is at a point on the budget constraint where MRSxy (marginal rate of substitution of X for Y) is 3 : 1, then

Answer & Solution

17. The strategy of price discrimination is followed under which firm of market?

Answer & Solution

18. The term "consumer goods" is used by economists to refer to

Answer & Solution

19. The difference between what a consumer is willing to pay for a unit of a good and what must be paid when actually buying it is called

Answer & Solution

20. According to monetarists, the Great Depression in the United States largely resulted due to

Answer & Solution

Read More Section(Economics)

11.
Which of the following will shift the supply curve for good X leftward?

12.
Which of the following is a characteristic of monopolistic competition?

13.
What is the fundamental premise of economics?

15.
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will

16.
The prices of two goods X and Y are: P_x = Rs. 5 and P_y = Rs. 3, respectively. If a consumer spending his entire income on these two commodities is at a point on the budget constraint where MRS_xy (marginal rate of substitution of X for Y) is 3 : 1, then

17.
The strategy of price discrimination is followed under which firm of market?

18.
The term "consumer goods" is used by economists to refer to

19.
The difference between what a consumer is willing to pay for a unit of a good and what must be paid when actually buying it is called

20.
According to monetarists, the Great Depression in the United States largely resulted due to