Economics Questions (MCQs) for Competitive Examinations
Economics Multiple Choice Questions (MCQs) for General Studies and GK preparation of SSC, NDA, CDS, UPSC, UPPSC and State PSC Examinations.
41. The new GDP series calculates GDP based on which price?
[A] Market price
[B] Factor cost
[C] Nominal costs
[D] None
Show Answer
Correct Answer: A [Market price]
Notes:
New GDP Series 2011-12
1. Change of base year – 2004-05 to2011-12
2. Change in GDP calculation to using market prices rather than factor costs.
3. Adopted the international practice of valuing industry-wise estimates as gross value added (GVA) at basic prices.
42. What does a good with positive externalities known as?
[A] Giffen goods
[B] Public goods
[C] Merit goods
[D] Snob good
Show Answer
Correct Answer: C [Merit goods]
Notes:
Merit goods are the goods that are provided generally by the government to certain sections of society. Unlike in the case of pure public goods, merit goods are not provided to the entire society; rather they are given to certain targeted people. They Have positive externalities Ex: health, education
43. Which among the following is correct regarding gross capital formation(GCF)?
1. High GCF high savings in the economy
2. It includes capital formation in the public sector too
3. It is the Percentage of investment out of total GDP
Choose the correct option from the code given below:
[A] 1 only
[B] 1 and 2 only
[C] 2 only
[D] 1,2 and 3
Show Answer
Correct Answer: D [1,2 and 3]
Notes:
Gross capital formation (GCF) – The percentage of the investment made each year out of the total GDP is called Gross Capital Formation. High GCF denotes higher rate of savings in the economy which is required for high rate of production, capital formation, changes in production techniques.GCF includes capital formation in public sector, private sector, and also household sector.
44. In terms of micro-economics, comparative advantage is based on which of the following?
[A] dollar price
[B] labor cost
[C] opportunity cost
[D] capital cost
Show Answer
Correct Answer: C [opportunity cost]
Notes:
Opportunity cost is the potential benefits that an investor, individual ora business misses due to choosing an alternate option. It is the forgone benefit.
45. Which of these relates to micro-economics?
[A] National Income
[B] Gross Domestic Product
[C] Level of Employment
[D] Consumer Equilibrium
Show Answer
Correct Answer: D [Consumer Equilibrium]
Notes:
Consumer equilibrium studies individual consumer choices, a core focus of micro-economics. Macro-economics deals with aggregates such as national income, GDP, and employment levels. Micro-economics analyzes how individual decisions impact supply, demand, and price formation within markets.
46. Which term is used to describe the want satisfying power of a commodity or a service?
[A] Demand
[B] Want
[C] Utility
[D] Consumption
Show Answer
Correct Answer: C [Utility]
Notes:
Utility is the want satisfying power of a commodity or a service. Law of diminishing marginal utility states that as a consumer consumes more and more units of a commodity, marginal utility derived from successive units goes on fa lling.
47. Which of the following factors don’t affect the demand for a commodity?
[A] Price of commodity
[B] Income of individual consumer
[C] Want of the consumer
[D] Price of related good
Show Answer
Correct Answer: C [Want of the consumer]
Notes:
Demand for a commodity is the quantity of that commodity which an individual (or buyer) is willing to purchase at different prices within a given period of time. Market demand means the total quantity of a commodity that all its buyers are willing to purchase at different prices over a given period of time. Demand for a commodity depends on a number of factors. The important factors that affect an individual demand for a commodity are: (i) price of the commodity, (ii) income of the individual consumer, (iii) price of related goods and (iv) tastes and preferences of the individual.
48. Which curve direction is an exception to the law of demand?
[A] Downward to the right
[B] Upward to the right
[C] Downward to the left
[D] Upward to the left
Show Answer
Correct Answer: B [Upward to the right]
Notes:
The law of demand states demand falls as price rises, shown by a downward-sloping curve. However, for Giffen or Veblen goods, demand curve may slope upward to the right, reflecting increased demand at higher prices, making it an exception to the general law of demand.
49. Which among the following is complementary good?
[A] Petrol and Car
[B] Iphone and Android Phone
[C] Milk and Sweet
[D] Shoes and Sandals
Show Answer
Correct Answer: A [Petrol and Car]
Notes:
Complementary goods are those pair of goods where the quantity demanded of one increases when the price of a related good decrease.
50. Which of the following is a “Public Good”?
[A] A Commodity that is popular among general public
[B] A scheme that benefits the poor
[C] A commodity that is produced by Government
[D] A Commodity whose benefits are indivisibly spread among the entire community
Show Answer
Correct Answer: D [A Commodity whose benefits are indivisibly spread among the entire community]
Notes:
“Public Good” is a Commodity whose benefits are indivisibly spread among the entire community.
