MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The difference between GDP and NDP equals: |
| A. | transfer payments |
| B. | net indirect taxes |
| C. | net factor income from abroad |
| D. | depreciation |
| Answer» E. | |
| 2. |
National Income means: |
| A. | gnp at factor cost |
| B. | gnp at market price |
| C. | nnp at factor cost |
| D. | nnp at market price |
| Answer» D. nnp at market price | |
| 3. |
Supply curve represents -------- relationship between quantity and price |
| A. | direct |
| B. | inverse |
| C. | either direct or inverse |
| D. | none of the above |
| Answer» B. inverse | |
| 4. |
There is ------- relationship between price and quantity supplied |
| A. | positive |
| B. | negative |
| C. | constant |
| D. | inverse |
| Answer» B. negative | |
| 5. |
There is no distinction between firm and industry in |
| A. | perfect competition |
| B. | monopoly |
| C. | monopolistic competition |
| D. | oligopoly |
| Answer» C. monopolistic competition | |
| 6. |
An increase in market demand, supply remaining the same results in |
| A. | decrease in equilibrium price |
| B. | decrease in equilibrium quantity |
| C. | decrease in equilibrium price and increase in equilibrium quantity |
| D. | both equilibrium price and quantity rises |
| Answer» E. | |
| 7. |
The cost of next best alternative is called |
| A. | marginal cost |
| B. | average cost |
| C. | opportunity cost |
| D. | direct cost |
| Answer» D. direct cost | |
| 8. |
A fall in the market demand, supply remaining the same results in |
| A. | increase in equilibrium price |
| B. | increase in equilibrium quantity |
| C. | increase in equilibrium price and decrease in equilibrium quantity |
| D. | both equilibrium price and quantity falls |
| Answer» E. | |
| 9. |
When MC is greater than AC, AC |
| A. | rises |
| B. | falls |
| C. | maximum |
| D. | minimum |
| Answer» B. falls | |
| 10. |
Cost function relates cost to |
| A. | input |
| B. | output |
| C. | raw material |
| D. | machines |
| Answer» C. raw material | |
| 11. |
When MC cuts AC, AC is at its ------------ |
| A. | maximum |
| B. | minimum |
| C. | zero |
| D. | negative |
| Answer» C. zero | |
| 12. |
At prices above the equilibrium price |
| A. | quantity supplied exceeds quantity demanded |
| B. | quantity demanded exceeds quantity supplied |
| C. | there is shortage |
| D. | all of the above is possible |
| Answer» B. quantity demanded exceeds quantity supplied | |
| 13. |
Change in quantity supplied of a product can result from |
| A. | changes in own price |
| B. | changes in cost of production |
| C. | change in technology |
| D. | change in price of related products |
| Answer» B. changes in cost of production | |
| 14. |
When output is zero, variable cost is -------- |
| A. | maximum |
| B. | minimum |
| C. | infinity |
| D. | zero |
| Answer» E. | |
| 15. |
The horizontal supply curve parallel to quantity axis represents |
| A. | elastic supply |
| B. | inelastic supply |
| C. | perfectly elastic supply |
| D. | perfectly inelastic supply |
| Answer» D. perfectly inelastic supply | |
| 16. |
Average cost is the sum of AVC and |
| A. | mc |
| B. | tc |
| C. | afc |
| D. | atc |
| Answer» D. atc | |
| 17. |
If a positively sloped linear supply curve crosses the quantity axis, the elasticity of supply is: |
| A. | inelastic |
| B. | elastic |
| C. | unitary elastic |
| D. | perfectly elastic |
| Answer» B. elastic | |
| 18. |
-------------- cost can never become zero. |
| A. | variable cost |
| B. | fixed cost |
| C. | marginal cost |
| D. | average cost |
| Answer» C. marginal cost | |
| 19. |
If a positively sloped linear supply curve passes through the origin, the elasticity of supply is |
| A. | inelastic |
| B. | elastic |
| C. | unitary elastic |
| D. | perfectly elastic |
| Answer» D. perfectly elastic | |
| 20. |
In which of the following market, advertisement is absent: |
| A. | monopolistic competition |
| B. | perfect competition |
| C. | oligopoly |
| D. | none of the above |
| Answer» D. none of the above | |
| 21. |
Elasticity of supply for a positively sloped straight line supply curve that intersects the price axis is: |
| A. | equal to zero |
| B. | equal to one |
| C. | greater than one |
| D. | constant |
| Answer» D. constant | |
| 22. |
From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then: |
| A. | equilibrium price falls |
| B. | equilibrium quantity rises |
| C. | both equilibrium price and equilibrium quantity decreases |
| D. | equilibrium price rises, but equilibrium quantity falls |
| Answer» E. | |
| 23. |
If the supply curve of the commodity is having a positive slope, a rise in the price of the commodity, results in: |
| A. | increase in supply |
| B. | increase in quantity supplied |
| C. | decrease in supply |
| D. | decrease in quantity supplied |
| Answer» C. decrease in supply | |
| 24. |
Net addition to total cost is called: |
| A. | marginal cost |
| B. | average cost |
| C. | fixed cost |
| D. | variable cost |
| Answer» B. average cost | |
| 25. |
The market equilibrium for a commodity is determined by : |
| A. | market demand |
| B. | market supply |
| C. | balancing of the forces of demand and supply |
| D. | any of the above |
| Answer» D. any of the above | |
| 26. |
Which of the following is the reason for law of demand: |
| A. | price effect |
| B. | backlash effect |
| C. | income effect |
| D. | real balance effect |
| Answer» D. real balance effect | |
| 27. |
Most important determinant of demand is : |
| A. | income |
| B. | wealth |
| C. | price |
| D. | advertisement |
| Answer» D. advertisement | |
| 28. |
When there are only few sellers of the commodity, the market is called: |
| A. | monopoly |
| B. | duopoly |
| C. | oligopoly |
| D. | monopsony |
| Answer» D. monopsony | |
| 29. |
Net addition to total utility when one more unit is consumed is: |
| A. | au |
| B. | mu |
| C. | mc |
| D. | tu |
| Answer» C. mc | |
| 30. |
If a small change in price leads to infinitely large change in quantity demanded, then the demand is: |
| A. | perfectly elastic |
| B. | perfectly inelastic |
| C. | elastic |
| D. | inelastic |
| Answer» B. perfectly inelastic | |
| 31. |
Cross elasticity of demand in the case of substitutes: |
| A. | zero |
| B. | negative |
| C. | positive |
| D. | infinity |
| Answer» D. infinity | |
| 32. |
If the income elasticity of demand for a commodity is found to be 0.4, then the commodity concerned is: |
| A. | luxury |
| B. | necessity |
| C. | giffen’s goods |
| D. | independent good |
| Answer» C. giffen’s goods | |
| 33. |
Which of the following is an exception to the law of demand? |
| A. | giffen good |
| B. | normal good |
| C. | superior good |
| D. | all of the above |
| Answer» B. normal good | |
| 34. |
If the income elasticity of demand is greater than one, then the commodity is: |
| A. | necessity |
| B. | luxury |
| C. | inferior |
| D. | non-related commodity |
| Answer» B. luxury | |
| 35. |
The law of diminishing marginal utility was popularized by: |
| A. | keynes |
| B. | marshall |
| C. | smith |
| D. | samuelson |
| Answer» C. smith | |
| 36. |
If the quantity demanded remains unchanged as the price of the commodity falls, the coefficient of price elasticity of demand is: |
| A. | greater than |
| B. | one equal to one |
| C. | smaller than one |
| D. | zero |
| Answer» E. | |
| 37. |
When the price of the substitute commodity of X falls, the demand for X: |
| A. | rises |
| B. | falls |
| C. | remains unchanged |
| D. | all of the above is possible |
| Answer» C. remains unchanged | |
| 38. |
When an individual’s income rises, when everything else remains the same, his demand for normal goods: |
| A. | rises |
| B. | falls |
| C. | remains the same |
| D. | any of the above is possible |
| Answer» B. falls | |
| 39. |
When an individual’s income falls, when everything else remains the same, his demand for inferior goods: |
| A. | increases |
| B. | decreases |
| C. | remains unchanged |
| D. | cannot say |
| Answer» B. decreases | |
| 40. |
Income elasticity is positive, but less than unity in the case of: |
| A. | necessity |
| B. | luxury |
| C. | inferior |
| D. | substitutes |
| Answer» B. luxury | |
| 41. |
Income elasticity of demand for inferior good is: |
| A. | negative |
| B. | positive |
| C. | zero |
| D. | unity |
| Answer» B. positive | |
| 42. |
In drawing an individual demand curve for a commodity, all but which of the following are kept constant: |
| A. | individual’s money income |
| B. | the prices of the related commodity |
| C. | price of the commodity under consideration |
| D. | tastes of the consumer |
| Answer» D. tastes of the consumer | |
| 43. |
In the case of luxury goods, the income elasticity of demand will be: |
| A. | less than unity |
| B. | unity |
| C. | more than unity |
| D. | all the above |
| Answer» D. all the above | |
| 44. |
When Q = f (P), the elasticity coefficient is measured by: |
| A. | ∆q/∆p / p/q |
| B. | ∆p/∆q * q/p |
| C. | ∆q/∆p * p/q |
| D. | ∆p/∆q / q/p |
| Answer» D. ∆p/∆q / q/p | |
| 45. |
Demand varies ------------- with price. |
| A. | directly |
| B. | positively |
| C. | inversely |
| D. | none of the above |
| Answer» D. none of the above | |
| 46. |
When TU falls, MU is: |
| A. | rises |
| B. | zero |
| C. | positive |
| D. | negative |
| Answer» E. | |
| 47. |
Relation between price of a commodity and demand for another commodity is measured by: |
| A. | price elasticity |
| B. | income elasticity |
| C. | cross elasticity |
| D. | elasticity of substitution |
| Answer» D. elasticity of substitution | |
| 48. |
For complementary goods, the cross elasticity of demand: |
| A. | positive |
| B. | negative |
| C. | zero |
| D. | none |
| Answer» C. zero | |
| 49. |
Other things remaining the same, the quantity of a product demanded increases with ------------ in price. |
| A. | increase |
| B. | decrease |
| C. | variation |
| D. | none of the above |
| Answer» C. variation | |
| 50. |
When total utility is maximum, marginal utility is: |
| A. | maximum |
| B. | one |
| C. | zero |
| D. | infinite |
| Answer» D. infinite | |