180+ Basics of Economics Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) , Bachelor of Arts in Sociology (BA Sociology) , Union Public Service Commission (UPSC) , Indian Administrative Service (IAS) .

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1.	The economic problem arises since
A.	wants are unlimited
B.	resources are limited
C.	resources are capable of alternative uses
D.	all of the above
Answer» D. all of the above

2.	Economic problem arises in
A.	planned economies
B.	free market economies
C.	mixed economies
D.	all of the above
Answer» D. all of the above

3.	The resources are :
A.	limited
B.	unlimited
C.	not only limited but are capable of alternative uses
D.	none of the above
Answer» C. not only limited but are capable of alternative uses

4.	----- is not an example of free good
A.	sunlight
B.	car
C.	petrol
D.	computer
Answer» A. sunlight

5.	The term production refers to:
A.	producing things which are capable of satisfying human wants
B.	creation or addition of utilities
C.	transformation of inputs into output
D.	all of the above
Answer» D. all of the above

6.	The problem of allocation of resources is concerned with:
A.	what to produce
B.	how to produce
C.	for whom to produce
D.	all of the above
Answer» A. what to produce

7.	The distribution of national product among the members of the society is the problem of:
A.	what to produce
B.	how to produce
C.	for whom to produce
D.	all of the above
Answer» C. for whom to produce

8.	Which one of the following come under macro economics:
A.	per capita income
B.	study of a firm
C.	individual income
D.	theory of factor pricing
Answer» A. per capita income

9.	Which one of the following is not come under macro economics
A.	national income
B.	per capita income
C.	disposable income
D.	individual income
Answer» D. individual income

10.	Partial equilibrium analysis come under:
A.	micro economics
B.	macro economics
C.	welfare economics
D.	international economics
Answer» A. micro economics

11.	“The starting point of all economic activity is the existence of human wants” Who said this?
A.	adam smith
B.	selligman
C.	ricardo
D.	alfred marshall
Answer» B. selligman

12.	Production and consumption takes place simultaneously in the case of
A.	goods
B.	services
C.	both in the case of goods and services
D.	neither in the case of goods and services
Answer» B. services

13.	Economic growth can be achieved through
A.	advanced technology
B.	expansion of resources
C.	both a & b
D.	neither a & b
Answer» C. both a & b

14.	Micro economics doesn’t deal with:
A.	the study of individual economic units
B.	determination of factor prices
C.	price determination of commodities
D.	general equilibrium analysis
Answer» D. general equilibrium analysis

15.	Name the economist who analyses the subject matter of economics into two branches: micro economic analysis and macro economic analysis.
A.	adam smith
B.	alfred marshall
C.	ragner frisc
D.	p a samuelson
Answer» C. ragner frisc

16.	Transformation of inputs into outputs is known as
A.	production
B.	consumption
C.	distribution
D.	exchange
Answer» A. production

17.	----- is an example of secondary input
A.	land
B.	labour
C.	capital
D.	raw material
Answer» D. raw material

18.	Odd-man out from the following
A.	steel
B.	medicine
C.	education
D.	train
Answer» C. education

19.	The choice of techniques of production is related to the problem of
A.	what to produce
B.	how to produce
C.	for whom to produce
D.	none of the above
Answer» B. how to produce

20.	The functional relationship between inputs and outputs is called
A.	production function
B.	consumption function
C.	investment function
D.	saving function
Answer» A. production function

21.	Firms owned by one individual is known as
A.	proprietorship
B.	partnership
C.	corporations
D.	none of the above
Answer» A. proprietorship

22.	Firms owned by two or more individuals is known as
A.	proprietorship
B.	partnership
C.	corporations
D.	none of the above
Answer» B. partnership

23.	Firms owned by stock holders are known as
A.	proprietorship
B.	partnership
C.	corporations
D.	none of the above
Answer» C. corporations

24.	The major objective of a firm is
A.	profit maximization
B.	revenue maximization
C.	sales maximization
D.	none of the above
Answer» A. profit maximization

25.	Which one of the following is an example of fixed input
A.	raw materials
B.	casual workers
C.	plant and equipments
D.	all of the above
Answer» C. plant and equipments

180+ Basics of Economics Solved MCQs

The economic problem arises since

Economic problem arises in

The resources are :

----- is not an example of free good

The term production refers to:

The problem of allocation of resources is concerned with:

The distribution of national product among the members of the society is the problem of:

Which one of the following come under macro economics:

Which one of the following is not come under macro economics

Partial equilibrium analysis come under:

“The starting point of all economic activity is the existence of human wants” Who said this?

Production and consumption takes place simultaneously in the case of

Economic growth can be achieved through

Micro economics doesn’t deal with:

Name the economist who analyses the subject matter of economics into two branches: micro economic analysis and macro economic analysis.

Transformation of inputs into outputs is known as

----- is an example of secondary input

Odd-man out from the following

The choice of techniques of production is related to the problem of

The functional relationship between inputs and outputs is called

Firms owned by one individual is known as

Firms owned by two or more individuals is known as

Firms owned by stock holders are known as

The major objective of a firm is

Which one of the following is an example of fixed input

In short-run

In long-run

The variable cost of a firm vary in direct proportion to the

Law of variable proportions is concerned with

The ‘point of inflection’ come in which stage of the law of variable proportions

A rational producer will select his level of production in which stage of the law of variable proportions

Total product reaches at maximum when

Returns to scale refers to the production function where

In the case of diminishing returns to scale, a given proportionate increase in all factors causes

Increasing returns to scale occurs due to

The cause for diminishing returns to scale is:

The solution to diminishing returns to scale is :

Which one of the following is not related to economies of scale:

The law of Diminishing returns is applicable to:

labourers are employed the firm produces 136 units of output. Then the marginal product is ---

Other things remaining the same, the quantity of a product demanded increases with ------------ in price.

When total utility is maximum, marginal utility is:

For complementary goods, the cross elasticity of demand:

Relation between price of a commodity and demand for another commodity is measured by:

When TU falls, MU is:

Demand varies ------------- with price.

When Q = f (P), the elasticity coefficient is measured by:

Income elasticity of demand for inferior good is:

In the case of luxury goods, the income elasticity of demand will be:

Income elasticity is positive, but less than unity in the case of:

26.	In short-run
A.	all inputs are fixed
B.	all inputs are variable
C.	some inputs are fixed and some are variable
D.	none of the above
Answer» C. some inputs are fixed and some are variable

28.	The variable cost of a firm vary in direct proportion to the
A.	volume of its output
B.	extent of its profits
C.	volume of its sale
D.	all of the above
Answer» A. volume of its output

29.	Law of variable proportions is concerned with
A.	long-run production function
B.	laws of returns to scale
C.	short-run production function
D.	none of the above
Answer» C. short-run production function

30.	The ‘point of inflection’ come in which stage of the law of variable proportions
A.	stage i
B.	stage ii
C.	stage iii
D.	none of the above
Answer» A. stage i

32.	Total product reaches at maximum when
A.	mp is increasing
B.	mp is maximum
C.	mp = 0
D.	mp is negative
Answer» C. mp = 0

33.	Returns to scale refers to the production function where
A.	all factors are fixed
B.	some factors are fixed and others are variable
C.	all factors are variable
D.	none of the above
Answer» C. all factors are variable

34.	In the case of diminishing returns to scale, a given proportionate increase in all factors causes
A.	a more than proportionate increase in output
B.	an equal proportionate increase in output
C.	a less than proportionate increase in output
D.	none of the above
Answer» C. a less than proportionate increase in output

35.	Increasing returns to scale occurs due to
A.	division of labour
B.	specialization
C.	economies of scale
D.	all of the above
Answer» D. all of the above

36.	The cause for diminishing returns to scale is:
A.	improper proportion of factors of production
B.	difficulty in the combination of certain factors
C.	excess combination of certain factors
D.	all of the above
Answer» D. all of the above

37.	The solution to diminishing returns to scale is :
A.	technical progress
B.	expansion of resources
C.	proper combination or resources
D.	all of the above
Answer» D. all of the above