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.
The rule of Equimarginal utility is given below also known by many other names. Which of the following is a mismatch

A. Law of utility and demand

B. Rule of replacement

C. Indifference rule

D. Law of economy in expenditure

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12.
A firm learns that the own-price elasticity of a product it manufacturers is 3.5. What is the correct action for the firm to take to raise its total revenue?

A. Raises the price because the demand for the good is elastic

B. Lowers the price because the demand for the good is elastic

C. We need information on the firm's cost structure to answer

D. Raise the price because demand is elastic

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13.
If P_x = P_y, then when the consumer maximises utility,

A. X must be equal to Y

B. MU(X) must be equal to MU(Y)

C. MU(X) may equal MU(Y), but it is necessarily so

D. X and Y must be substitutes

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14.
Match the following.

List-I (Types of Market Structures) List-II (Methods of Marketing)

a. Perfect competition 1. Market exchange

b. Monopolistic competition 2. Competitive advertising

c. Oligopoly 3. Quality

d. Monopoly 4. Promotional advertising

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

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

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

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

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15.
Which of the following statement is/are correct?
1. When the percentage change in demand is greater than that of price, then demand is relatively inelastic.
2. When the demand remains unchanged at all price variation, it is perfectly inelastic.
Select the correct answer

A. Only 1

B. Only 2

C. Both 1 and 2

D. Neither 1 nor 2

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16.
In an oligopoly market, the kinked demand curve explains

A. Collusion among rival firms

B. Average variable cost curves

C. Short-run average cost curves

D. Long-run average cost curves

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17.
Higher indifference curve shows:

A. Minimum level of satisfaction

B. The point of satisfaction

C. Higher level of satisfaction

D. Highest level of satisfaction

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18.
For inferior commodities, income effect is

A. zero

B. negative

C. infinite

D. positive

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19.
Elasticity of demand for electricity is:

A. Inelastic

B. Elastic

C. Less elastic

D. More elastic

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20.
A firm produces 2,00,000 units a year and sells all for Rs. 10 each. The explicit costs of production are Rs. 15,000 and the implicit costs of production are Rs. 3,00,000. The firm has an accounting profit of

A. Rs. 5,00,000 and an economic profit of Rs. 2,00,000

B. Rs. 4,00,000 and an economic profit of Rs. 2,00,000

C. Rs. 3,00,000 and an economic profit of Rs. 4,00,000

D. Rs. 2,00,000 and an economic profit of Rs. 5,00,000

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1 2 3 4 5 6 7 8 9 10

List-I (Types of Market Structures)	List-II (Methods of Marketing)
a. Perfect competition	1. Market exchange
b. Monopolistic competition	2. Competitive advertising
c. Oligopoly	3. Quality
d. Monopoly	4. Promotional advertising

Economics MCQ Questions and Solutions with Explanations | Commerce

11. The rule of Equimarginal utility is given below also known by many other names. Which of the following is a mismatch

Answer & Solution

12. A firm learns that the own-price elasticity of a product it manufacturers is 3.5. What is the correct action for the firm to take to raise its total revenue?

Answer & Solution

13. If Px = Py, then when the consumer maximises utility,

Answer & Solution

14. Match the following. List-I (Types of Market Structures) List-II (Methods of Marketing) a. Perfect competition 1. Market exchange b. Monopolistic competition 2. Competitive advertising c. Oligopoly 3. Quality d. Monopoly 4. Promotional advertising

Answer & Solution

15. Which of the following statement is/are correct? 1. When the percentage change in demand is greater than that of price, then demand is relatively inelastic. 2. When the demand remains unchanged at all price variation, it is perfectly inelastic. Select the correct answer

Answer & Solution

16. In an oligopoly market, the kinked demand curve explains

Answer & Solution

17. Higher indifference curve shows:

Answer & Solution

18. For inferior commodities, income effect is

Answer & Solution

19. Elasticity of demand for electricity is:

Answer & Solution

20. A firm produces 2,00,000 units a year and sells all for Rs. 10 each. The explicit costs of production are Rs. 15,000 and the implicit costs of production are Rs. 3,00,000. The firm has an accounting profit of

Answer & Solution

Read More Section(Economics)

11.
The rule of Equimarginal utility is given below also known by many other names. Which of the following is a mismatch

12.
A firm learns that the own-price elasticity of a product it manufacturers is 3.5. What is the correct action for the firm to take to raise its total revenue?

13.
If P_x = P_y, then when the consumer maximises utility,

14.
Match the following.

List-I (Types of Market Structures) List-II (Methods of Marketing)

a. Perfect competition 1. Market exchange

b. Monopolistic competition 2. Competitive advertising

c. Oligopoly 3. Quality

d. Monopoly 4. Promotional advertising

15.
Which of the following statement is/are correct?
1. When the percentage change in demand is greater than that of price, then demand is relatively inelastic.
2. When the demand remains unchanged at all price variation, it is perfectly inelastic.
Select the correct answer

16.
In an oligopoly market, the kinked demand curve explains

17.
Higher indifference curve shows:

18.
For inferior commodities, income effect is

19.
Elasticity of demand for electricity is:

20.
A firm produces 2,00,000 units a year and sells all for Rs. 10 each. The explicit costs of production are Rs. 15,000 and the implicit costs of production are Rs. 3,00,000. The firm has an accounting profit of