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

91.
Consider the following combinations of inputs and outputs-

Labour Capital Output

5 10 1

6 12 2

7 14 3

8 16 4

9 18 5

10 20 6

This production technology satisfies

A. increasing returns to scale

B. diminishing returns to scale

C. constant returns to scale

D. increasing returns initially, followed by decreasing returns to scale

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92.
The slope of an isoquant tells

A. The decrease in capital necessary to keep output constant when labour increases by one unit

B. The increase in mpL when capital increases

C. The decrease in capital necessary to keep MPL constant when labour increases by one unit

D. The increase in output when both inputs are increased

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93.
The market equilibrium for a commodity is determined by

A. the market demand for the commodity

B. the market supply of the commodity

C. the balancing of the forces of demand and supply for the commodity

D. any of the above

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94.
The economies and diseconomies of scale explain why the

A. Short-run average fixed cost curve declines so long as output increases

B. Marginal cost curve must intersect the minimum point of the firm's average total cost curve

C. Long-run average total cost curve is typically U-shaped

D. Short-run average variable cost curve is U-shaped

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95.
If a change in the price of one of good causes a change in quantity demand, then the cross elasticity of demand between them is

A. Negative

B. Positive

C. Zero

D. One

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96.
Due to which of the following reason/s monopolistic firms incur advertisement cost.
1. Differentiate goods
2. Large number of sellers
3. Avoid price war
Select the correct answer

A. 1 and 2

B. Both 1 and 3

C. Both 2 and 3

D. All of the above

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97.
Match the following.

List-I List-II

a. Fixed costs 1. Fall at first and then rise as the firm approaches full capacity

b. Variable costs 2. Continue to fall at rate proportionate with the increase in output

c. Total costs 3. Are those costs which do not increase as output increases

d. Average total costs 4. Are the amount paid to all the factors employed in producing the output

e. Average fixed costs 5. Are those costs which increase as output increase

A. a-3, b-5, c-4, d-1, e-2

B. a-4, b-5, c-1, d-2, e-3

C. a-5, b-4, c-3, d-1, e-2

D. a-1, b-2, c-3, d-4, e-5

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98.
"Each firm produces an identical product and there is freedom of entry and exit". This is true for which of the following market structures?

A. For monopoly

B. For oligopoly

C. For perfect competition

D. For monopolistic competition

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99.
Assuming a downward-sloping demand curve and upward sloping supply curve, a higher equilibrium price may be caused by

A. A fall in demand

B. An increase in supply

C. Improvement in production technology

D. An increase in demand

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100.
Which one of the following is not helpful in increasing productivity?

A. Increase in capital product ratio

B. Replacement of labour with capital according to the change in price ratios

C. Learning from action

D. None of the above

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Fixed costs	1. Fall at first and then rise as the firm approaches full capacity
b. Variable costs	2. Continue to fall at rate proportionate with the increase in output
c. Total costs	3. Are those costs which do not increase as output increases
d. Average total costs	4. Are the amount paid to all the factors employed in producing the output
e. Average fixed costs	5. Are those costs which increase as output increase

Labour	Capital	Output
5	10	1
6	12	2
7	14	3
8	16	4
9	18	5
10	20	6

Economics MCQ Questions and Solutions with Explanations | Commerce

91. Consider the following combinations of inputs and outputs- Labour Capital Output 5 10 1 6 12 2 7 14 3 8 16 4 9 18 5 10 20 6 This production technology satisfies

Answer & Solution

92. The slope of an isoquant tells

Answer & Solution

93. The market equilibrium for a commodity is determined by

Answer & Solution

94. The economies and diseconomies of scale explain why the

Answer & Solution

95. If a change in the price of one of good causes a change in quantity demand, then the cross elasticity of demand between them is

Answer & Solution

96. Due to which of the following reason/s monopolistic firms incur advertisement cost. 1. Differentiate goods 2. Large number of sellers 3. Avoid price war Select the correct answer

Answer & Solution

Answer & Solution

98. "Each firm produces an identical product and there is freedom of entry and exit". This is true for which of the following market structures?

Answer & Solution

99. Assuming a downward-sloping demand curve and upward sloping supply curve, a higher equilibrium price may be caused by

Answer & Solution

100. Which one of the following is not helpful in increasing productivity?

Answer & Solution

Read More Section(Economics)

91.
Consider the following combinations of inputs and outputs-

Labour Capital Output

5 10 1

6 12 2

7 14 3

8 16 4

9 18 5

10 20 6

This production technology satisfies

92.
The slope of an isoquant tells

93.
The market equilibrium for a commodity is determined by

94.
The economies and diseconomies of scale explain why the

95.
If a change in the price of one of good causes a change in quantity demand, then the cross elasticity of demand between them is

96.
Due to which of the following reason/s monopolistic firms incur advertisement cost.
1. Differentiate goods
2. Large number of sellers
3. Avoid price war
Select the correct answer

98.
"Each firm produces an identical product and there is freedom of entry and exit". This is true for which of the following market structures?

99.
Assuming a downward-sloping demand curve and upward sloping supply curve, a higher equilibrium price may be caused by

100.
Which one of the following is not helpful in increasing productivity?