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

41.
When the decrease in the price of one good causes the demand for another good to decrease, the goods are

A. complements

B. normal

C. inferior

D. substitutes

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42.
What is the theory that opening a country to world markets given an opportunity to utilize unemployed and underemployed resources known as

A. Ricardian theory

B. Heckscher-ohlin theory

C. Vent-for-surplus theory

D. Strategic trade theory

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43.
The consumer is said to be in equilibrium when he plans his expenditure on x, y and z commodities in such a way that he ultimately attains

A. $$M{U_X} = M{U_y} = {M_Z}$$

B. $$\frac{{M{U_X}}}{{{P_X}}} = \frac{{M{U_Y}}}{{{P_Y}}} = \frac{{{M_Z}}}{{{P_Z}}}$$

C. $$\frac{{M{U_X}}}{{{P_X}}} = \frac{{M{U_Y}}}{{{P_Y}}} = \frac{{M{U_Z}}}{{{P_Z}}} = M{U_M}$$

D. $$\frac{{M{U_X}}}{{{P_X}}} < \frac{{M{U_Y}}}{{{P_Y}}} < \frac{{M{U_Z}}}{{{P_Z}}} < M{U_M}$$

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44.
Oligopolistic firms making their price-output decisions keeping in view the current and possible future decisions of their rival firms, is an example of

A. strategic interaction

B. prisoner's dilemma

C. price leadership

D. None of these

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45.
A hypothesis is tested by

A. the realism of its assumption(s)

B. the lack of realism of its assumption(s)

C. its ability to predict accurately

D. none of the above

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46.
Under which of the following situations, economies of scale exists to the potential and persists?

A. When firm is too small and too specialized

B. When firm's decision to hire inputs do not result in an increase in the input costs

C. When firm is too large and overdiversified

D. When long-run cost of producing a unit falls as the output increases

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47.
Elasticity of demand is equal to unity while marginal revenue is

A. positive

B. zero

C. negative

D. indeterminate

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48.
Which one of the following does not explain the basic nature of business economics?

A. Behaviour of firms in theory and practice

B. Distribution theories like rent, wages and interest along with the theory of profit

C. Use of the tools of economic analysis in clarifying problems in organising and evaluating information and in comparing alternative courses of action

D. Integration of economic theory with business practices for the purpose of facilitating decision-making

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49.
Match the following.

List-I List-II

a. Excess of profit total revenue over total explicit cost 1. Normal Profit

b. Total profit revenue equals total economic cost 2. Economic Profit

c. Excess of total revenue over total of explicit and implicit costs and a normal rate of return 3. Accounting Profit

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

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

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

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

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50.
A firm in perfect competition will have long run equilibrium when

A. AR > AC

B. MR = MC = AR = AC

C. MR = MC but AC < AR

D. AC = AR

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Excess of profit total revenue over total explicit cost	1. Normal Profit
b. Total profit revenue equals total economic cost	2. Economic Profit
c. Excess of total revenue over total of explicit and implicit costs and a normal rate of return	3. Accounting Profit

Economics MCQ Questions and Solutions with Explanations | Commerce

41. When the decrease in the price of one good causes the demand for another good to decrease, the goods are

Answer & Solution

42. What is the theory that opening a country to world markets given an opportunity to utilize unemployed and underemployed resources known as

Answer & Solution

43. The consumer is said to be in equilibrium when he plans his expenditure on x, y and z commodities in such a way that he ultimately attains

Answer & Solution

44. Oligopolistic firms making their price-output decisions keeping in view the current and possible future decisions of their rival firms, is an example of

Answer & Solution

45. A hypothesis is tested by

Answer & Solution

46. Under which of the following situations, economies of scale exists to the potential and persists?

Answer & Solution

47. Elasticity of demand is equal to unity while marginal revenue is

Answer & Solution

48. Which one of the following does not explain the basic nature of business economics?

Answer & Solution

Answer & Solution

50. A firm in perfect competition will have long run equilibrium when

Answer & Solution

Read More Section(Economics)

41.
When the decrease in the price of one good causes the demand for another good to decrease, the goods are

42.
What is the theory that opening a country to world markets given an opportunity to utilize unemployed and underemployed resources known as

43.
The consumer is said to be in equilibrium when he plans his expenditure on x, y and z commodities in such a way that he ultimately attains

44.
Oligopolistic firms making their price-output decisions keeping in view the current and possible future decisions of their rival firms, is an example of

45.
A hypothesis is tested by

46.
Under which of the following situations, economies of scale exists to the potential and persists?

47.
Elasticity of demand is equal to unity while marginal revenue is

48.
Which one of the following does not explain the basic nature of business economics?

50.
A firm in perfect competition will have long run equilibrium when