Economics – Multiple Choice Questions (MCQ) with Answers
Economics – Multiple Choice Questions (MCQ) with Answers
HPSC, HCS Preliminary Examination, 2014
1-Demand for a commodity refers to:
- Need for the commodity
- Desire for the commodity
- Amount of the commodity demanded at a particular price and at a particular time
- Quantity demanded of that commodity
(Ans: c)
2-Which among the following statement is INCORRECT?
- On a linear demand curve, all the five forms of elasticity can be depicted’
- If two demand curves are linear and intersecting each other then coefficient of elasticity would be same on different demand curves at the point of intersection.
- If two demand curves are linear, and parallel to each other then at a particular price the coefficient of elasticity would be different on different demand curves.
- The price elasticity of demand is expressed in terms of relative not absolute, changes in Price and quantity demanded’
(Ans: b)
3-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:
- Increase
- Decrease
- Remain the same
- Become zero
(Ans: a)
4-The horizontal demand curve parallel to x-axis implies that the elasticity of demand is:
- Zero
- Infinite
- Equal to one
- Greater than zero but less than infinity
(Ans: b)
5-An individual demand curve slopes downward to the right because of the:
- Working of the law of diminishing marginal utility
- substitution effect of decrease in price
- income effect of fall in Price
- All of the above
(Ans: d)
6-Income elasticity of demand is defined as the responsiveness of:
- Quantity demanded to a change in income
- Quantity demanded to a change in price
- Price to a change in income
- Income to a change in quantity demanded
(Ans:a)
7-The supply of a good refers to:
- Stock available for sale
- Total stock in the warehouse
- Actual Production of the good
- Quantity of the good offered for sale at a particular price per unit of time
(Ans: d)
8-In the short run, when the output of a firm increases, its average fixed cost:
- Remains constant
- Decreases
- Increases
- First decreases and then rises
(Ans: b)
9-The cost of one thing in terms of the alternative given up is called:
- Real cost
- Production cost
- Physical cost
- opportunity cost
(Ans: d)
10-Assume that consumer’s income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certainty that the equilibrium:
- Price will decrease
- Price will increase
- Quantity will increase
- Quantity will decrease
(Ans: d)
11-The economist’s objections to monopoly rest on which of the following grounds?
- There is a transfer of income from consumers to the monopolist
- There is welfare loss as resources tend to be misallocated under monopoly
- Only A is correct
- Both A and B are correct
(Ans: d)
12-In which of the following market structure is the degree of control over the price of its product by a firm very large?
- Imperfect competition
- Perfect competition
- Monopoly
- In A and B both
(Ans: c)