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 slope of indifference curve indicates$? |
| A. | Price ratio between two commodities |
| B. | Marginal rate of substitution |
| C. | Factor substitution |
| D. | Level of indifference |
| Answer» C. Factor substitution | |
| 2. |
_ Under which of the following forms of market structure does a firm have no control over the price of its product?$? |
| A. | Monopoly |
| B. | Monopolistic competition |
| C. | Oligopoly |
| D. | Perfect competition |
| Answer» E. | |
| 3. |
_ In case of monopoly$? |
| A. | Marginal revenue curve always slopes upward |
| B. | Total revenue curve always slopes upward |
| C. | Marginal revenue is always equal to average revenue |
| D. | Marginal revenue is always less than average revenue |
| Answer» E. | |
| 4. |
_ The necessary condition for equilibrium position of a firm is$? |
| A. | MR>MC |
| B. | MC>Price |
| C. | MC=MR |
| D. | MC=AC |
| Answer» D. MC=AC | |
| 5. |
_ What best explains a shift in market supply curve to the right?$? |
| A. | An advertising campaign is successful in promoting the good |
| B. | A new technique makes it cheaper to produce the good |
| C. | The government introduces a tax on the good |
| D. | The price of raw materials increases |
| Answer» C. The government introduces a tax on the good | |
| 6. |
_ With which of the theories of wages, is the name of John Stuart Mill associated?$? |
| A. | Marginal productivity theory of wages |
| B. | Wages-fund theory |
| C. | Subsistence theory of wages |
| D. | Iron aw of wages |
| Answer» C. Subsistence theory of wages | |
| 7. |
_ Under perfect competition$? |
| A. | AC=AVC |
| B. | AR=AC |
| C. | AR=MC |
| D. | AR=MR |
| Answer» E. | |
| 8. |
_ In the case of an inferior good, the income elasticity of demand is$? |
| A. | Positive |
| B. | Zero |
| C. | Negative |
| D. | Infinite |
| Answer» D. Infinite | |
| 9. |
_ Which of the following is NOT a characteristic of perfect competition?$? |
| A. | Free entry and exit of the firms |
| B. | The demand curve of firm is horizontal |
| C. | The marginal revenue curve is horizontal |
| D. | An individual firm can influence the price |
| Answer» E. | |
| 10. |
_ A firm decides to exit the industry when$? |
| A. | AC starts rising |
| B. | MC starts rising |
| C. | Price is less than LAC |
| D. | TC starts rising |
| Answer» D. TC starts rising | |
| 11. |
_ Demand is a function of$? |
| A. | Price |
| B. | Quantity |
| C. | Supply |
| D. | None of the above |
| Answer» B. Quantity | |
| 12. |
_ Which one is not a assumption of the theory of demand based on analysis of indifference curves?$? |
| A. | Given scale of preferences as between different combinations of two goods |
| B. | Diminishing marginal rate of substitution |
| C. | Constant marginal utility of money |
| D. | Consumers would always prefer more of a particular good to less of it, other things remaining the same |
| Answer» D. Consumers would always prefer more of a particular good to less of it, other things remaining the same | |
| 13. |
_ The cost of one thing in terms of the alternative given up is called$? |
| A. | Real cost |
| B. | Production cost |
| C. | Physical cost |
| D. | Opportunity cost |
| Answer» E. | |
| 14. |
_ Demand for factors of production is$? |
| A. | Derived demand |
| B. | Joint demand |
| C. | Composite demand |
| D. | None of the above |
| Answer» B. Joint demand | |
| 15. |
_ Who defined Economics as a 'science which studies human behaviour as a relationship betweeen ends and means which have alternative uses'?$? |
| A. | L. Robbins |
| B. | Alfred Marshall |
| C. | Joan Robinson |
| D. | Paul A. Samuelson |
| Answer» B. Alfred Marshall | |
| 16. |
_ Which among the following is a function of the Reserve Bank of India?$? |
| A. | Bank issues the letters of credit to their customers certifying their credibility |
| B. | Collecting and compilation of statistical information relating to banking & other financial sector |
| C. | Banks underwrite the securities issued by public or private organizations |
| D. | Accepting deposits from the public |
| Answer» C. Banks underwrite the securities issued by public or private organizations | |
| 17. |
_ Which of the following is also known as plant curves?$? |
| A. | Long-run average cost (LAC) curves |
| B. | Short-run average cost (SAC) curves |
| C. | Average variable cost (AVC) curves |
| D. | Average total cost (ATC) curves |
| Answer» C. Average variable cost (AVC) curves | |
| 18. |
_ Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is$? |
| A. | 10% |
| B. | 30% |
| C. | 3 |
| D. | 1 |
| Answer» D. 1 | |
| 19. |
_ Microeconomics deals with the$? |
| A. | Allocation of resources of the economy as between production of different goods and services |
| B. | Determination of prices of goods and services |
| C. | Behavior of industrial decision makers |
| D. | All of the above |
| Answer» E. | |
| 20. |
_ Price and demand are positively correlated in case of$? |
| A. | Normal goods |
| B. | Comforts |
| C. | Giffen goods |
| D. | Luxuries |
| Answer» D. Luxuries | |
| 21. |
_ In the short run, when the output of a firm increases, its average fixed cost$? |
| A. | Increases |
| B. | Decreases |
| C. | Remains constant |
| D. | First declines and then rises |
| Answer» C. Remains constant | |
| 22. |
_ The total effect of a price change of a commodity is$? |
| A. | Sustitution effect plus price effect |
| B. | Substitution effect plus income effect |
| C. | Substitution effect plus demonstration effect |
| D. | Substitution effect minus income effect |
| Answer» C. Substitution effect plus demonstration effect | |
| 23. |
_ If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to$? |
| A. | Increase |
| B. | Decrease |
| C. | Remain the same |
| D. | Become zero |
| Answer» B. Decrease | |
| 24. |
_ A firm under perfect competition will be making minimum losses (in the short run) at a point where$? |
| A. | MC>MR |
| B. | MR>MC |
| C. | MC=MR |
| D. | AC=AR |
| Answer» D. AC=AR | |
| 25. |
_ Profits are$? |
| A. | Residual payment |
| B. | Pre-determined |
| C. | Fixed contract |
| D. | Always higher than wages |
| Answer» B. Pre-determined | |
| 26. |
_ When Marginal Utility is zero, Total Utility is$? |
| A. | Minimum |
| B. | Maximum |
| C. | Law of return |
| D. | None of the above |
| Answer» C. Law of return | |
| 27. |
_ Which of the following is CORRECT with respect to resources?$? |
| A. | Money is a capital good |
| B. | Human skills are a labour input |
| C. | Entrepreneur is part of the labour input |
| D. | Natural resources include human input |
| Answer» C. Entrepreneur is part of the labour input | |
| 28. |
_ The long run is a$? |
| A. | Period of three years or longer |
| B. | Period long enough to allow firms to change plant size and capacity |
| C. | Period long enough to allow firm to make economic decisions |
| D. | A period which affects larger than smaller firms |
| Answer» C. Period long enough to allow firm to make economic decisions | |
| 29. |
_ Economics is the study of$? |
| A. | how society manages its unlimited resources |
| B. | how to reduce our wants until we are satisfied |
| C. | how society manages its scarce resources |
| D. | how to fully satisfy our unlimited wants |
| Answer» D. how to fully satisfy our unlimited wants | |
| 30. |
_ A necessity is defined as a good having$? |
| A. | A positive income elasticity of demand |
| B. | A negative income elasticity of demand |
| C. | An income elasticity of demand between zero and 1 |
| D. | An income elasticity of more than 1 |
| Answer» D. An income elasticity of more than 1 | |
| 31. |
_ The MC curve cuts the AVC and ATC curves at$? |
| A. | The falling part of each |
| B. | Different points |
| C. | Their respective minimas |
| D. | The rising part of each |
| Answer» D. The rising part of each | |
| 32. |
_ If the demand for a good is inelastic, an increase in the price of the good will cause the total expenditure of the consumers of the good to$? |
| A. | Remain the same |
| B. | Increase |
| C. | Decrease |
| D. | Any of the above |
| Answer» C. Decrease | |
| 33. |
_ The kinked demand curve model of oligopoly assumes that$? |
| A. | Response to a price increase is less than the response to a price decrease |
| B. | Response to a price increase is more than the response to a price decrease |
| C. | Elassticity of demand is constant regardless of whether price increases or decreases |
| D. | Elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases |
| Answer» B. Response to a price increase is more than the response to a price decrease | |
| 34. |
_ In economics, what a consumer is ready to pay minus what he actually pays, is termed as$? |
| A. | Consumer's equilibrium |
| B. | Consumer's surplus |
| C. | Consumer's expenditure |
| D. | None of the above |
| Answer» C. Consumer's expenditure | |
| 35. |
_ An isoquant slopes$? |
| A. | Downward to the left |
| B. | Downward to the right |
| C. | Upward to the right |
| D. | Upward to the left |
| Answer» C. Upward to the right | |
| 36. |
_ Lesser production of ____ would lead to lesser production in future.$? |
| A. | Public goods |
| B. | Consumer goods |
| C. | Capital goods |
| D. | Agricultural goods |
| Answer» D. Agricultural goods | |
| 37. |
_ The following are causes of shift in demand EXCEPT$? |
| A. | Change in income |
| B. | Change in price |
| C. | Change in fashion |
| D. | Change in prices of substitutes |
| Answer» C. Change in fashion | |
| 38. |
_ When equilibrium price rises but equilibrium quantity remains unchanged, the cause is$? |
| A. | Supply and demand both increase equally |
| B. | Supply and demand both decrease equally |
| C. | Supply decreases and demand increases |
| D. | Supply increases and demand decreases |
| Answer» D. Supply increases and demand decreases | |
| 39. |
_ When cross elasticity of demand is a large positive number, one can conclude that$? |
| A. | The good is normal |
| B. | The good is inferior |
| C. | The good is a substitute |
| D. | The good is complement |
| Answer» D. The good is complement | |
| 40. |
_ If demand is inelastic, a change in the price$? |
| A. | Will change the quantity in same direction |
| B. | Will change total revenue in same direction |
| C. | Will change total revenue in the opposite direction |
| D. | Will not change total revenue |
| Answer» C. Will change total revenue in the opposite direction | |
| 41. |
_ A rise in supply and demand in equal proportion will result in$? |
| A. | Increase in equilibrium price and equilibrium quantity |
| B. | Decrease in equilibrium price and increase in equilibrium quantity |
| C. | No change in equilibrium price and increase in equilibrium quantity |
| D. | Increase in equilibrium price and no change in equilibrium quantity |
| Answer» D. Increase in equilibrium price and no change in equilibrium quantity | |
| 42. |
__One characteristic not typical of oligopolistic industry is__ |
| A. | Too much importance to non-price competition |
| B. | Price leadership |
| C. | Horizontal demand curve |
| D. | A small number of firms in the industry |
| Answer» D. A small number of firms in the industry | |
| 43. |
__The upper portion of the kinked demand curve is relatively__ |
| A. | More inelastic |
| B. | More elastic |
| C. | Less elastic |
| D. | Inelastic |
| Answer» C. Less elastic | |
| 44. |
__The IC curve approach assumes__ |
| A. | Rationality |
| B. | Consistency |
| C. | Transitivity |
| D. | All of the above |
| Answer» E. | |
| 45. |
__The 'substitution effect' takes place due to change in__ |
| A. | Income of the consumers |
| B. | Prices of the commodity |
| C. | Relative prices of the commodities |
| D. | All of the above |
| Answer» D. All of the above | |
| 46. |
_The minimum wage is an example of$? |
| A. | Price floor |
| B. | Price ceiling |
| C. | Equilibrium wage |
| D. | Efficiency of labour |
| Answer» B. Price ceiling | |
| 47. |
_Identify the economist who had little formal education and started working in the money market at an early age of fourteen.$? |
| A. | David Ricardo |
| B. | Adam Smith |
| C. | V.F.D. Pareto |
| D. | A.A. Cournot |
| Answer» B. Adam Smith | |
| 48. |
_TVC curve$? |
| A. | Starts from origin |
| B. | Does not start from origin |
| C. | Is parallel to Y-axis |
| D. | None of the above |
| Answer» B. Does not start from origin | |
| 49. |
_Which of the following is example of external economies of scale?$? |
| A. | Discount on purchases of raw materials |
| B. | Technical progress leads to development of machine at low price |
| C. | Hiring of specialized staff due to increase in scale of production |
| D. | A firm starts producing by-products |
| Answer» C. Hiring of specialized staff due to increase in scale of production | |
| 50. |
_A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is$? |
| A. | Equal to 1 |
| B. | More than 1 |
| C. | Less than 1 |
| D. | 0 |
| Answer» B. More than 1 | |