Explore topic-wise MCQs in Economics Mcqs.

This section includes 71 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.

1.

Opportunity cost is_________________?
A. the cost incurred in the past before we make a decision about what to do in the future.
B. a cost that cannot be avoided. regardless of what is done in the future
C. that which we forgo, or give up, when we make a choice or a decision.
D. the additional benefit of buying an additional unit of a product
Answer» D. the additional benefit of buying an additional unit of a product
Discussion
2.

If marginal benefit is greater than marginal cost, a rational choice involves ?
A. no more of the activity.
B. less of the activity
C. more of the activity
D. more or less, depending on the benefits of other activities
Answer» D. more or less, depending on the benefits of other activities
Discussion
3.

In the mixed economy________________?
A. economics problems are solved by the government and market
B. economic decisions are made by the private sector and free market
C. economic allocation is achieved by the invisible hand
D. economics s is solved by government departments
Answer» B. economic decisions are made by the private sector and free market
Discussion
4.

when a market is in equilibrium ?
A. quantity demanded equals quantity supplied
B. Excess demand and excess supply are zero
C. The market is cleared by the equilibrium price
D. All of the above
Answer» E.
Discussion
5.

A market can accurately be described as_________________?
A. a place to buy things
B. a place to sell things
C. the process by which prices adjust to reconcile the allocation of resources
D. a place where buyers and sellers meet
Answer» D. a place where buyers and sellers meet
Discussion
6.

Time series data show information ?
A. about the same point in time over different places
B. about different points in time over the same variable
C. about different variables over different places
D. about different points in time over different places
Answer» C. about different variables over different places
Discussion
7.

A supply curve is directly affected by ?
A. technology
B. input costs
C. government regulation
D. all of the above
Answer» E.
Discussion
8.

If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale this is an example of ?
A. a nonlinear relationship
B. a positive linear relationship
C. a scatter diagrams
D. a negative linear relationship
Answer» E.
Discussion
9.

A straight-line diagram can be drawn knowing the ________ and ________?
A. vertical axis and horizontal axis
B. intercept and slope
C. scale and slope
D. intercept and scale
Answer» D. intercept and scale
Discussion
10.

A real value can be derived from a nominal value by ?
A. adjusting for changes over time
B. adjusting for data collection errors
C. adjusting for population changes
D. adjusting or changes in prices
Answer» E.
Discussion
11.

Macroeconomics is the study of ?
A. individual building blocks in the economy
B. the relationship between different sectors on the economy
C. household purchase decisions
D. the economy as a whole
Answer» E.
Discussion
12.

The study of inflation is part of ?
A. descriptive economics
B. normative economics
C. macroeconomics
D. microeconomics
Answer» D. microeconomics
Discussion
13.

A recession is ?
A. a period of declining prices.
B. a period of declining unemployment
C. a period during which aggregate output declines.
D. a period of very rapidly declining prices.
Answer» D. a period of very rapidly declining prices.
Discussion
14.

Normative economics Forms ________ based on ________?
A. positive statements, facts
B. opinions personal facts
C. positive statements values
D. opinions facts
Answer» B. opinions personal facts
Discussion
15.

Macroeconomics deals with?
A. the behavior of the electronics industry
B. the behavior of firms
C. economics aggregates
D. the activities of individual units
Answer» D. the activities of individual units
Discussion
16.

The total demand for goods and services in an economy is known as_____________?
A. gross national product.
B. national demand.
C. economy-wide demand
D. aggregate demand
Answer» E.
Discussion
17.

The retail price index is used to__________________?
A. construct price lists
B. compare shop prices
C. measure changes in the cost of living
D. None of the above
Answer» D. None of the above
Discussion
18.

In a free market?
A. government intervenes
B. government plan production
C. government interferes
D. Prices adjust to reconcile scarcity and desires
Answer» E.
Discussion
19.

Data are important in economics because _________ and ____________?
A. they suggest relationships for explanation, allow testing of hypotheses
B. they can be used for tables, they can be graphed
C. they can be used in computers governments use them
D. they provide interesting information can be summarized
Answer» B. they can be used for tables, they can be graphed
Discussion
20.

A mixed economy ?
A. Has supply but not demand
B. Has demand but not supply
C. Has supply and demand
D. Has market forces and government intervention
Answer» E.
Discussion
21.

The opportunity cost of a good is______________?
A. the time lost in finding it
B. the quantity of other goods sacrificed to get another unit of that good
C. the expenditure on the good
D. the loss of interest in using savings
Answer» C. the expenditure on the good
Discussion
22.

________ and ___________ do not directly affect the demand curve ?
A. the price of related goods consumer income
B. consumer incomes, tastes
C. the costs of production bank opening hours
D. the price of related goods preferences
Answer» D. the price of related goods preferences
Discussion
23.

You are planning to run a hot dog stand during a forthcoming fair. You originally estimated that you will generated sales revenue of Rs 2000 and you have already spent Rs 1000 building the hot dog stand. The hot dog stand is nearly completed but now you estimate total sales to be only Rs 800 because the fair clashes with a major music festival in a nearby location. You can complete the hot dog stand for another Rs 300 Your decision rule should be to complete the hot dog stand as long as the cost to complete the stand is less than ?
A. Rs 300
B. Rs 1000
C. Rs 500
D. Rs 800
Answer» E.
Discussion
24.

Productivity can be increased by ?
A. improving the education of workers
B. raising union wages.
C. raising minimum wages.
D. restricting trade with foreign countries.
Answer» B. raising union wages.
Discussion
25.

An increase in consumer income will increase demand for a _________ but decrease demand for a?
A. substitute good, inferior good
B. normal good inferior good
C. inferior good normal good
D. normal good, complementary good
Answer» C. inferior good normal good
Discussion
26.

The basic economic problems will not be solved by ?
A. Market forces
B. Government intervention
C. A mixture of government intervention and the free market
D. The creation of unlimited resources
Answer» E.
Discussion
27.

A demand curve can shift because changing ?
A. incomes
B. prices of related goods
C. tastes
D. all of the above
Answer» E.
Discussion
28.

If a price increase of good A increases the quantity demanded of good B, then good B is a________________?
A. substitute good
B. complementary good
C. bargain
D. inferior good
Answer» B. complementary good
Discussion
29.

The equilibrium price clears the market it is the price at which _________________?
A. Everything is sold
B. Buyers spend all their money
C. Quantity demanded equal quality supplied
D. Excess demanded equals quantity
E. C and D
Answer» F.
Discussion
30.

When we know the quantity of a product that buyers wish to purchase at each possible price we know_____________?
A. Demand
B. Supply
C. Excess demand
D. Excess supply
Answer» B. Supply
Discussion
31.

Periods of less than full employment corresponds to _________________ ?
A. points outside the production possibility curve
B. either points inside or outside the production possibility curve.
C. points on the production possibility curve
D. points inside the production possibility curve.
Answer» E.
Discussion
32.

In a free market system, the amount of goods and services that any one household gets depends upon its ?
A. income
B. income and wealth
C. wealth
D. wage and interest income
Answer» C. wealth
Discussion
33.

A student chooses to study because the marginal benefit is greater than the ______________ cost?
A. average
B. expected
C. total
D. marginal
Answer» E.
Discussion
34.

High and persistent inflation is caused by ?
A. unions increasing wages too much
B. OPEC raising the price of oil too much
C. governments increasing the quantity of money too much
D. regulations raising the cost of production too much
Answer» B. OPEC raising the price of oil too much
Discussion
35.

Suppose you find Rs 20. If you choose to use the Rs 20 to go to a football match your opportunity cost of going to the game is ?
A. nothing because you found the money.
B. Rs20 (because you found the money Rs 20 to buy other things) plus the value of your time spent at the game.
C. Rs 20 (because you could have used the Rs 20 to buy other things) plus the value of your time spent at the game plus the cost of the dinner you purcha
D. Rs20 (because you could have used the Rs20 to buy other ghings)
E. None of these
Answer» C. Rs 20 (because you could have used the Rs 20 to buy other things) plus the value of your time spent at the game plus the cost of the dinner you purcha
Discussion
36.

Unemployment means that ?
A. there is excess demand in the labour market
B. there are some people who will not work at the going wage rate.
C. people are not willing to work at the going wage rate.
D. at the going wage rate, there are people who want to work but cannot find work.
Answer» E.
Discussion
37.

An increase in the price of beef providers information which ?
A. provides no information because prices in a market system are managed by planning boards.
B. tells consumers to buy less pork
C. tells producers to produce more beef.
D. tells consumers to buy more beef.
Answer» D. tells consumers to buy more beef.
Discussion
38.

Which of the following is not part of the opportunity cost of going on holiday ?
A. The money you spent on a theater show
B. The money you could have made if you had stayed at home and worked
C. The money you spend on airline tickets
D. the money you spent on food
Answer» E.
Discussion
39.

-7-+47-+45-+-+Since people respond to incentives, we would expect that if the average salary of accountants increases by 50% while the average salary of teachers increase by 20% then ?
A. Fewer students will take degree courses in education and more will take accounting courses.
B. fewer students will take degree courses in education and more will take accounting courses
C. fewer students will attend university
D. None of these
Answer» C. fewer students will attend university
Discussion
40.

Which of the following products would be least capable of producing an externality ?
A. inoculations against disease
B. cigarettes
C. food
D. education
E. stereo equipment
Answer» D. education
Discussion
41.

A rational person does not act unless ?
A. the action is ethical
B. The action produces marginal costs that exceed marginal benefits.
C. The action produces marginal benefits that exceed marginal costs.
D. The action makes money for the person.
Answer» D. The action makes money for the person.
Discussion
42.

Which of the following statements is true about a market economy ?
A. With a large enough computer, central planners could guide production more efficiently than markets.
B. Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare
C. The strength of a market system is that it tends to distribute resources evenly across consumers.
D. Taxes help prices communicate costs and benefits to producers and consumers.
Answer» C. The strength of a market system is that it tends to distribute resources evenly across consumers.
Discussion
43.

Which of the following is a normative statement in economics ?
A. More spending by the government reduces poverty
B. Higher taxes lead to less desire to work
C. The Pakistan’s economy is growing fast relative to other SAARC members
D. The government should concentrate on reducing unemployment
Answer» E.
Discussion
44.

The economics the central problem is ?
A. Scarcity
B. Money
C. Consumption
D. Allocation
Answer» B. Money
Discussion
45.

Which one of the following is a normative statement ?
A. The richest 10 per cent of the population has had a bigger percentage increase in incomes over the past 10 years than the poorest 10 percent
B. Inflation is rising
C. The proportion of people’s income paid in taxes is higher under this government than under the previous one.
D. Inequality in the distribution of income is a more serious problem than unemployment
Answer» E.
Discussion
46.

Trade-offs are required because wants are unlimited, and resources are ?
A. economical
B. unlimited
C. Efficient
D. Scarce
Answer» E.
Discussion
47.

Workers in Western Europe enjoy a high standard of living because ?
A. the countries of Western Europe have set high minimum wage rates.
B. Unions in Western Europe keep the wage high
C. none of these answers.
D. The countries of Western Europe have protected their industries from foreign corporation
E. Workers in the united states are highly productive
Answer» D. The countries of Western Europe have protected their industries from foreign corporation
Discussion
48.

Aggregate supply is the total amount ?
A. of labor supplied by all households.
B. Produced by the government.
C. of goods and services produced in an economy.
D. of products produced by a given industry.
Answer» D. of products produced by a given industry.
Discussion
49.

Inflation is___________________?
A. a decrease in the overall price level.
B. an increase in the overall price level.
C. an increase in the overall level of economic activity.
D. a decrease in the overall level of economics activity
Answer» C. an increase in the overall level of economic activity.
Discussion
50.

Microeconomics is not concerned with the behavior of ?
A. aggregate demand
B. firms
C. Consumers
D. industries.
Answer» B. firms
Discussion