MCQOPTIONS
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MCQOPTIONS
This section includes 78 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following will NOT cause a shift in the demand curve for compact discs ? |
| A. | A change in wealth |
| B. | A change in the price of compact discs |
| C. | A change in income. |
| D. | A change in the price of pre-recorded cassette tapes |
| Answer» C. A change in income. | |
| 2. |
Which of the following would increase aggregate demand ? |
| A. | Increased saving |
| B. | Increasing import spending |
| C. | Increased taxation revenue |
| D. | increased investment |
| Answer» D. increased investment | |
| 3. |
Which of the following would decease aggregate demand ? |
| A. | increase consumption |
| B. | increasing export revenue |
| C. | increased taxation revenue |
| D. | increased investment |
| Answer» C. increased taxation revenue | |
| 4. |
Which of the following is consistent with the law of supply ? |
| A. | As the price of calculators rise, the quantity supplied of calculators decreases, ceteris paribus. |
| B. | As the price of calculators calls the supply of calculators increases, ceteris paribus. |
| C. | As the price of calculators rise, the quantity supplied of calculators increases, ceteris paribus. |
| D. | As the price of calculators rise, the supply of calculators increases ceteris paribus. |
| Answer» D. As the price of calculators rise, the supply of calculators increases ceteris paribus. | |
| 5. |
Which best describes a supply curve ? |
| A. | The quantity consumers would like to buy in an ideal world |
| B. | The quantity producers are willing and able to sell at each and every price all other things unchanged |
| C. | The quantity producers are willing and able to sell at each and every income all other things unchanged |
| D. | The quantity producers are willing and able to sell at each and every point in time all other things unchanged |
| Answer» C. The quantity producers are willing and able to sell at each and every income all other things unchanged | |
| 6. |
Which best describes a demand curve ? |
| A. | the quantity consumers would like to buy in an ideal world |
| B. | The quantity consumers are willing to sell |
| C. | The quantity consumers are willing and able to buy at each and every income all other things unchanged |
| D. | The quantity consumers are willing and able to buy each and every price all other things changed |
| Answer» E. | |
| 7. |
When the market operates without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as ? |
| A. | Quantity setting |
| B. | price fixing |
| C. | price rationing |
| D. | quantity adjustment. |
| Answer» D. quantity adjustment. | |
| 8. |
When the decrease in the price of one good causes the demand for another good to decrease, the goods are_________? |
| A. | complements |
| B. | substitutes |
| C. | inferior |
| D. | nromal |
| Answer» C. inferior | |
| 9. |
When excess demand occurs in an unregulated market, there is a tendency for ? |
| A. | price to fall |
| B. | quantity supplied to decrease |
| C. | price to rise |
| D. | quantity demanded to increase |
| Answer» D. quantity demanded to increase | |
| 10. |
What effect is working when the price of a good falls and consumers tend to buy it instead of other goods ? |
| A. | The ceteris paribus effect |
| B. | The diminishing marginal utility effect |
| C. | The substitution effect |
| D. | The income effect |
| Answer» D. The income effect | |
| 11. |
The Setrite Corporation produce chairs. An economist working for the firm predicts that if people’s incomes rise next year, then the demand for our chairs will for our chairs will increase ceteris paribus The accuracy of the economist’s prediction depends on whether the chairs Setrite Produce ? |
| A. | have few substitutes. |
| B. | are normal goods |
| C. | have few complementary goods. |
| D. | have many complementary goods. |
| Answer» C. have few complementary goods. | |
| 12. |
The quantity demanded of Pepsi has decreased. The best explanation for this is that ? |
| A. | Pepsi’s advertising is not as effective as in the past |
| B. | The price of Coca Cola has increased |
| C. | Pepsi consumers had an increase in income |
| D. | The price of Pepsi increased |
| Answer» E. | |
| 13. |
The price of burgers increase by 22% and the quantity of burgers demanded falls by 25% This indicates that demand for burgers is ? |
| A. | elastic |
| B. | perfectly elastic |
| C. | unitarily elastic |
| D. | inelastic |
| Answer» B. perfectly elastic | |
| 14. |
The price of computer chips used in the manufacture of personal computers has fallen. This will lead to _________ personal computer? |
| A. | a decrease in the quantity supplied of |
| B. | a decrease in the supply of |
| C. | an increase in the quantity supplied of |
| D. | an increase in the supply of |
| Answer» E. | |
| 15. |
The price of burgers increase by 22% and the quantity of burgers demanded falls by 25% This indicates that demand for burgers is ____________? |
| A. | elastic |
| B. | perfectly elastic |
| C. | unitarily elastic |
| D. | inelastic |
| Answer» B. perfectly elastic | |
| 16. |
The price of apples falls by 5% and quantity demanded increases by 6% This means that demand is ? |
| A. | zero elastic |
| B. | elastic |
| C. | perfectly elastic |
| D. | inelastic |
| Answer» C. perfectly elastic | |
| 17. |
The price elasticity of demand measures ? |
| A. | The responsiveness of quantity demanded to a change in price |
| B. | How far a demand curve shifts |
| C. | a change in price |
| D. | a change in quantity demanded |
| Answer» B. How far a demand curve shifts | |
| 18. |
The price elasticity of supply is +4 The price increases by 15% sales were originally 200 units What will they be now ? |
| A. | 80 units |
| B. | 320 units |
| C. | 60 units |
| D. | 120 units |
| Answer» C. 60 units | |
| 19. |
The price elasticity of demand is the ? |
| A. | ratio of the change in price to the change in quantity demanded. |
| B. | ratio of the percentage change in quantity demanded to the percentage change in price. |
| C. | ratio of the change in quantity demanded to the change in price. |
| D. | ratio of the percentage change in price to the percentage change in quantity demanded. |
| Answer» C. ratio of the change in quantity demanded to the change in price. | |
| 20. |
The price decrease from Rs 2,000 to Rs 1,800 Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ? |
| A. | The price elasticity of demand is -2 |
| B. | The good is inferior |
| C. | Income elasticity is + 0.5 |
| D. | Income elasticity is + 2 |
| Answer» B. The good is inferior | |
| 21. |
The price elasticity of demand is a negative number this means ? |
| A. | Demand is price elastic |
| B. | Demand is price inelastic |
| C. | The demand curve is downward sloping |
| D. | An increase in income will reduce the quantity demanded |
| Answer» D. An increase in income will reduce the quantity demanded | |
| 22. |
The opportunity cost of a student is____________? |
| A. | Course fees and rent |
| B. | A loan from the bank |
| C. | What the student could have earned in the best job available by not studying |
| D. | What the student will earn after graduation |
| Answer» D. What the student will earn after graduation | |
| 23. |
The law of demand implies that ? |
| A. | as prices rise, demand decrease |
| B. | as prices fall, quantity demanded increase |
| C. | as prices fall demand increases |
| D. | as prices rise, quantity demanded increases |
| Answer» C. as prices fall demand increases | |
| 24. |
The increase in total cost when one more unit is produced is known as ? |
| A. | marginal cost |
| B. | opportunity cost |
| C. | limited cost |
| D. | average cost |
| Answer» E. | |
| 25. |
The income elasticity is +2 and income increases by 20% sales were 5000 units, what will they be now ? |
| A. | 3000 |
| B. | 7000 |
| C. | 5500 |
| D. | 4500 |
| Answer» C. 5500 | |
| 26. |
The income effect of a price increase of a normal good is to ________ of that good and the substitution effect is to _________ of that good? |
| A. | increase quantity demanded, reduce quantity demanded |
| B. | increase quantity demanded, increases quantity demanded |
| C. | reduce quantity demanded, reduce quantity demanded |
| D. | reduce quantity demanded, increase quantity demanded |
| Answer» D. reduce quantity demanded, increase quantity demanded | |
| 27. |
The extra utility from consuming one more unit of a good is called ? |
| A. | Marginal utility |
| B. | Additional utility |
| C. | Surplus utility |
| D. | Bonus utility |
| Answer» B. Additional utility | |
| 28. |
Profits are maximized when ? |
| A. | costs are minimized |
| B. | revenue is maximized |
| C. | average cost is less than average revenue |
| D. | marginal cost equals marginal revenue |
| Answer» E. | |
| 29. |
Price increases from 10 to 12 pence and the price elasticity of demand is -0.5 The quantity demanded was 500 units. What will it be now ? |
| A. | 550 units |
| B. | 500 units |
| C. | 450 units |
| D. | 490 units |
| Answer» D. 490 units | |
| 30. |
Positive cross elasticities suggest that goods are ____ and negative cross-elasticities that goods are ? |
| A. | substitutes inferior |
| B. | normal, complements |
| C. | substitutes complements |
| D. | normal, inferior |
| Answer» D. normal, inferior | |
| 31. |
Market equilibrium exists when _________ at the prevailing price? |
| A. | quantity demanded equals quantity supplied |
| B. | quantity demanded is less than quantity supplied |
| C. | quantity supplied is greater than quantity demanded |
| D. | quantity demanded is greater than quantity supplied |
| Answer» B. quantity demanded is less than quantity supplied | |
| 32. |
Marginal revenue is the ________ when output is __________? |
| A. | Change in average revenue, increased |
| B. | Change in total revenue, increase by one unit |
| C. | change in average revenue, increased by one unit |
| D. | change in total revenue increased |
| Answer» C. change in average revenue, increased by one unit | |
| 33. |
Inferior goods have _________ and luxury goods have _________? |
| A. | negative income elasticity income elasticity greater than 1 |
| B. | income elasticity greater than 1, negative income elasticities |
| C. | Positive income elasticities, negative income elasticities |
| D. | None of the above |
| Answer» B. income elasticity greater than 1, negative income elasticities | |
| 34. |
Increased levels of spending on imports ? |
| A. | shift aggregate supply to the right |
| B. | shift aggregate supply to the left |
| C. | shift aggregate demand to the right |
| D. | shift aggregate demand to the left |
| Answer» E. | |
| 35. |
Increased level consumption ? |
| A. | shift aggregate supply to the right |
| B. | shift aggregate supply to the left |
| C. | shift aggregate demand to the right |
| D. | shift aggregate demand to the left |
| Answer» C. shift aggregate demand to the right | |
| 36. |
Increase unemployment benefits and less incentive to work would ? |
| A. | shift aggregate supply to the right |
| B. | shift aggregate supply to the left |
| C. | shift aggregate demand to the right |
| D. | shift aggregate demand to the left |
| Answer» B. shift aggregate supply to the left | |
| 37. |
Improved training of employees would ? |
| A. | Shift aggregate supply to the right |
| B. | Shift aggregate supply to the left |
| C. | Shift aggregate demand to the right |
| D. | shift aggregate demand to the left |
| Answer» B. Shift aggregate supply to the left | |
| 38. |
If your income doubles and the prices of the goods you buy double then your demand for these goods will likely? |
| A. | increase |
| B. | not change |
| C. | decrease |
| D. | shift |
| Answer» C. decrease | |
| 39. |
If the quantity demanded of beef increases by 5% when the price of chicken increase by 20% the cross-price elasticity of demand between beef and chicken is ? |
| A. | -4 |
| B. | 0.25 |
| C. | 4 |
| D. | -0.25 |
| Answer» C. 4 | |
| 40. |
If the price elasticity of demand is unit then a fall in price ? |
| A. | Reduces revenue |
| B. | Leaves revenue unchanged |
| C. | Increase revenue |
| D. | Reduces costs |
| Answer» C. Increase revenue | |
| 41. |
If the demand for coffee decreases as income decreases, coffee is ? |
| A. | an inferior good |
| B. | a normal good |
| C. | a complementary good |
| D. | a substitute good |
| Answer» C. a complementary good | |
| 42. |
If the cross-price elasticity of demand between two goods is negative, then the two goods are ? |
| A. | normal goods |
| B. | unrelated goods |
| C. | Substitutes |
| D. | Complements |
| Answer» E. | |
| 43. |
If the cross elasticity of demand is -2 ? |
| A. | The products are substitutes and demand is cross price elastic |
| B. | The products are substitutes and demand is cross price inelastic |
| C. | The products are complements and demand is cross price elastic |
| D. | The products are complements and demand is cross price inelastic |
| Answer» D. The products are complements and demand is cross price inelastic | |
| 44. |
If marginal utility is zero ? |
| A. | Total utility is zero |
| B. | An additional unit of consumption will decrease total utility |
| C. | An additional unit of consumption will increase total utility |
| D. | Total utility is maximized |
| Answer» E. | |
| 45. |
If demand is __________ then price cuts will _________ spending? |
| A. | inelastic; increase |
| B. | elastic; increase |
| C. | elastic, decrease |
| D. | none of the above |
| Answer» C. elastic, decrease | |
| 46. |
if demand is price inelastic ? |
| A. | An increase in price must raise profits |
| B. | An increase in price decrease revenue |
| C. | An increase in price increase revenue |
| D. | A decrease in price reduces sales |
| Answer» D. A decrease in price reduces sales | |
| 47. |
If both marginal cost and marginal revenue increase, a firm ? |
| A. | Should increase output |
| B. | Should reduce output |
| C. | will require further information on how to respond |
| D. | Should not change output |
| Answer» D. Should not change output | |
| 48. |
If a product is an inferior good ? |
| A. | Demand is inversely related to income |
| B. | Demand in inversely related to price |
| C. | Demand is directly related to price |
| D. | Demand is inversely related to the price of substitutes |
| Answer» B. Demand in inversely related to price | |
| 49. |
If a product is a vablen good ? |
| A. | Demand is inversely related to income |
| B. | Demand is inversely related to price |
| C. | Demand is directly related to price |
| D. | Demand is inversely related to the price of substitutes |
| Answer» D. Demand is inversely related to the price of substitutes | |
| 50. |
If a firm wage costs increase this will cause __________ and __________? |
| A. | marginal cost to increase, output to fall |
| B. | marginal revenue to increase output to fall |
| C. | opportunity cost to increase the firm will close |
| D. | average cost will rise output will increase ____ output and an upward shift in marginal revenue ____ output |
| Answer» B. marginal revenue to increase output to fall | |