Economics Questions with Answers MCQ

Economics Questions with Answers MCQ

1-If demand curve assumes the shape of rectangular hyperbola, price elasticity is equal to

(A) One

(B) Greater than one

(C) Less than one

(D) Zero

 

2-Which of the following curves are rectangular hyperbola ?

(A) Average total cost curve

(B) Average fixed cost curve

(C) Average variable cost curve

(D) Marginal cost curve

 

3-The bowed shape of the production possibilities curve illustrates

(A) The demand is relatively inelastic

(B) That production is unattainable

(C) That production is inefficient

(D) The law of increasing marginal cost

 

4-If the cross-elasticity of demand of X for a change in the price of Y is positive, then the commodities X & Y are

(A) Giffen goods

(B) Inferior goods

(C) Complements

(D) Substitutes

 

5-The assumption of completeness is best described by

(A) A consumer can always specify exactly that X and Y are equally attractive

(B) A consumer can always specify exactly that X is preferred to Y

(C) A consumer can always specify exactly that Y is preferred to X

(D) All of the above

 

6-Sustainable development addresses to

(A) The needs of the future generation without compromising the needs of the present generation

(B) The needs of the present generation without compromising the needs of the future generation

(C) The needs of the future generation

(D) The needs of the present generation

 

7-Which of the following statement is true?

(A) All Giffen goods are inferior goods

(B) Giffen goods have positive income effect and negative substitution effect

(C) All inferior goods are Giffen goods

(D) Giffen goods have positive substitution effect

 

8-The demand for a product would be more inelastic

(A) The less expensive is the product in relation to incomes

(B) The greater is the time under consideration

(C) The greater is the number of substitutes available to buyers

(D) All of the above

 

9-In measuring price elasticity

(A) Price and quantity both are dependent variable

(B) Price & quantity both are independent variables

(C) Price is an independent variable & quantity is a dependent variable

(D) Price is a dependent variable & quantity is an independent variable

 

10-The firm in the modern world use reserve capacity to

(A) Reduce taxes

(B) Reduce wages

(C) Reduce costs

(D) Ensure greater flexibility in operations

 

ANSWERS:

1-(A), 2-(B), 3-(D), 4-(D), 5-(D), 6-(B), 7-(A), 8-(D), 9-(C), 10-(D)