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. Which of the following is not a micro-economic variable?
[A] Demand of a commodity
[B] Supply of a commodity
[C] Price rise of a commodity
[D] Employment generated in a year in a country
Show Answer
Correct Answer: D [Employment generated in a year in a country]
Notes:
Examples of micro economic variables are: (i) Demand of a commodity (ii) Supply of a commodity, (iii) Price determination of a commodity etc.
42. 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.
43. When the price of a substitute of a commodity X falls, then the demand for X will?
[A] Increase
[B] Decrease
[C] Increase, then decrease
[D] Decrease, then increase
Show Answer
Correct Answer: B [Decrease]
Notes:
Substitute goods are two alternative goods which could be used for same purpose . It is a product or service that consumer sees as the same or similar to another product . For example , tea and coffee are substitute goods . an increase in price of tea will in demand of coffee . Reason being people take tea and coffee as substitute goods . If the price of tea increases people will prefer coffee as it is cheaper and can be taken as a substitute of tea .Hence if the price of tea falls the demand of tea also falls.
44. What is the total output changes due to changes in all inputs in the same proportion is called as?
[A] Law of Diminishing marginal returns
[B] Law of Increasing output
[C] Law of Returns of Scale
[D] Law of constant returns
Show Answer
Correct Answer: C [Law of Returns of Scale]
Notes:
The way total output changes due to change in all inputs in the same proportion is known as “law of return to scale”.
45. Which among the following is an exception to the demand curve?
[A] upward to the right
[B] downward to the right
[C] upward to the left
[D] downward to the left
Show Answer
Correct Answer: A [upward to the right]
Notes:
When the demand curve slopes downwards from left to right; higher prices reduce the quantity demanded.
46. 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.
47. Which among the following is a factor of production?
[A] Land
[B] Rent
[C] Profits
[D] Interest
Show Answer
Correct Answer: A [Land]
Notes:
The factor of production are Land, Labour, Capital , Entrepreneurship.The payments made to the factors of production (rents, wages, interest, and profits).
48. Which of the following is a fixed cost to a manufacturing firm in short-run?
[A] Insurance on buildings
[B] Overtime payment to worker
[C] Cost of energy
[D] Cost of Raw Material
Show Answer
Correct Answer: A [Insurance on buildings]
Notes:
In the short run insurance premium are fixed costs because they are independent of the level of production.
49. 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.
50. An increase in the consumer income leads to a decrease in demand of which type of good?
[A] normal good
[B] complementary good
[C] inferior good
[D] substitute good
Show Answer
Correct Answer: C [inferior good]
Notes:
An inferior good is a good whose demand decreases when consumer income rises, unlike normal goods, for which the opposite is observed. Normal goods are those goods for which the demand rises as consumer income rises.
