MCQ’s

1. under normal economics conditions, if the money supply rises faster as compared to the real
output. It will lead to ___________________.

Deflation

Inflation

Recession

None of the above

2. All of the following are sources of growth except:

Growth of labour

Growth of capital

Growth of currency

Growth of technology

3. ___________________ problem is also called the ‘problem of distribution’ and is related with the
distribution of goods among the members of society and it specifies that who will consume goods and
services.

What to produce

How to produce

For whom to produce

None of the above

4. Which of following factor will lead to Fall in Demand?

Rise in income

Fall in price of substitute

Good credit policy

Increase in population

5. ___________________ demand is a demand for different quantities of a commodity or service that

consumers intend to purchase at a given price and time period assuming other factors remain
unchanged.

Price

Income

Consumer

Market

6. The demand for ___________________ goods increases with the corresponding increase in the
price of the goods.

Capital

Inferior

Necessity

Luxury
7. Which of the following does NOT shift the supply curve?

An increase in the price of the good

A fall in the price of a substitute in production

A decrease in the wages of labour used in production of the good

A technical advance

8. There is always ___________________ relationship between quantity & Price according to the law
of supply.

Explicit

Direct

Variable

Implicit

9. In case of increase in input prices of production, there could be ___________________

Increasing in corresponding demand

Increase in supply

Decrease in supply

Decrease in price level

10. ___________________ represents the quantities of a product supplied by an individual firm at

various price levels

Industry supply curve

Individual supply schedule

Market supply schedule

Economic supply schedule

11. The graphical representational of the supply schedule is known as ___________________

Supply line

Supply tangent

Supply curve

Supply chain

12. An indifference curve can be defined as the locus of ___________________

Points

Directions

Percentages

Axis

13. The assumptions for IC are termed to be ___________________

Unrealistic

Realistic

Probable

Scientific

14. In case of measurement of utility, cardinal & ___________________ approach plays major role

Diminishing

Marginal

Ordinal

Total
15. ___________________ elasticity method illustrates specific point on demand curve

Point

Array

Pointer

Measurement

16. The extent or degree of elasticity of demand defined the shape and ___________________ of the
demand curve

Depth

Version

Final extent

Slope

17. A ___________________ change in the price result in a large change in the quantity demanded in
the case of perfectly elastic demand.

Big

Small

Fixed

Variable

18. Outcome interpretation is recognized as ___________________ step in Demand forecasting

First

Second

Third

Last
19. Long term Demand Forecasting is anticipation greater than ___________________

1 year

2 years

3 years

5 years

20. In ___________________ method, market experts are provided with the estimates and
assumptions forecasts made by other experts in the industry

Test marketing

Sales force completive

Delphi method

None of the given options

21. Changes in consumer attitude, habits, fashion, lifestyle, perception, cultural and religious benefit,
etc. are example of ___________________

Sociological conditions

Psychological conditions

Political conditions

Competitive conditions

22. There are mainly 2 types of demand forecasting techniques, quantitative & ___________________

Statistical

Philosophical

Qualitative

Numerical
23. Which one of the following is a tangible input?

Ideas

Information

Capital

Knowledge

24. ___________________ Path can be defined as the perfect locus of all the points. It can ultimately
show the least combination of all factors of production.

Manufacturing

Expansion

Utility

Substitution

25. ___________________ cost is also referred to as alternative cost in Micro Economics

Opportitunity

Sunk

Implicit

Explicit

26. Return from the second best use of the firm’s limited resources which it forgoes in order to benefit
from the best use of these resources is called ___________________

Opportitunity cost

Alternative cost

Opportitunity / Alternative cost

Marginal cost
27. Which of the following Cost curves is not U shaped?

Long run total cost curve

Long run average cost curve

Long run marginal cost curve

Average fixed cost curve

28. Price discrimination on personal basis can be done through all of the following except
___________________

Geographical

Demographical

Paying capacity

Need

29. The concept of charging a different price for the same product in different Market is
___________________

Price discrimination

Price setting

Price evaluation

Price determination

30. Inefficient allocation of goods and services leads to the Market ___________________

Success

Expansion

Slowdown

Failure
31. In case of market failure, the demand is ___________________ to supply into market.

Over proportionate

Under proportionate

Not equal

Exactly equal

32. Existence of ___________________ seller is base feature of monopoly.

One

Few

Limited

Many

33. Cartels are not likely to arise in which of the following market structures?

Perfect competitive

Monopolistic competitive

Monopoly

All of the given options

34. Increasing the education level can result into better productivity and overall employment is
considered as a part of ___________________ externality

Educational

Positive

Individual

Social
35. ___________________ can be defined as the difference the price that a consumer is willing to pay
and the price that he/she actually pays for a commodity.

Consumer surplus

Producer surplus

Seller surplus

None of the given options

36. According to ___________________ a monopolist charges different prices for the products in
different areas.

Geographical price discrimination

Personal price discrimination

Utility based price discrimination

None of the given options

37. Price discrimination in a monopoly is described as ___________________

Same product selling at different prices since the cost of production are different

Same product selling at different prices through the cost of production are same

Different products having same price through cost of production are same

Different products having different prices since cost of production are different

38. ___________________ costs included the financial expenditure incurred by a firm in acquiring
inputs for the production of a commodity.

Opportunity

Implicit

Accounting

None of the given options

39. LRAC (Long run average cost) covers many ___________________.

SRAC

FRAC

MARC

TRAC

40. Consider two countries A and B. Country A is closed country with a relative abundance of labour
and holds a comparative advantage in the production of textiles. Country B has a relative abundance
of capital. When the textile trade is opened between the two countries, country A will most likely
experience a favorable impact on ___________________

Labour

Capital

Both labour and capital

None of the given options

41. Marginal product becomes negative ___________________

In no circumstance

When the total product turns down

When total output ceases to grows swiftly

All of the given options

42. The production function is, TP=15L, where L stands for labour. To achieve the highest average
productivity. What is the labour to be employed?

5
43. Which of the following is not a property of isoquant?

The higher the isoquant, output is higher and vice versa

Isoquant is positivity sloped

No two isoquant can interest each other

Isoquant curves slope downwards

44. Which phrase most closely describes the Delphi forecasting technique?

Consumer survey

Random individual opinions

Group of expert’s opinions

Tests market

45. The basic principle followed in barometric methods of demand forecasting is

____________________________

To prepare an index of relevant economic indicators and forecast future trends based on the
movements shown in the index

To prepare an index of relevant socio-cultural indicators and forecast future trends based on the
movements shown in the index

To prepare an index of relevant political-legal indicators and forecast future trends based on the
movements shown in the index

To prepare an index of relevant technological indicators and forecast future trends based on the
movements shown in the index
46. Rate of interest is an example of ___________________

Leading indicator

Lagging indicator

Market indicator

Price indicator

47. Concept of cross elasticity of demand helps Management to forecast the effect of change in
demand for ___________________

Joint goods

Capital goods

Substitute and complementary goods

None of the given options

48. The vertical & bit flatter demand curve for a commodity shows its demand as
___________________

Highly elastic

Highly inelastic

Unitary elastic

Perfectly elastic

49. Indifference curve analysis is based on the combinations of ___________________ commodities

One

Two

Three

Four
50. Consumer demand analysis is a process of ___________________.

Assessing consumer behavior based on satisfaction

Assessing consumer behavior depending upon government taxes

Assessing consumer behavior depending upon government subsidy

Studying past consumption of goods

51. Which of the following will NOT cause a shift in the supply of gasoline?

An increase in the wage rate of refinery workers

A decrease in the price of gasoline

An improvement in oil refilling technology

An improvement in oil refilling production volume

52. When there are large quantities of a good supplied at higher prices. It is known as
___________________ of supply.

Extension

Expansion

Extension or expansion

None of the given options

53. In case of ___________________, the quantity demanded for two or more commodities or services
are used jointly and are, thus demanded together.

Common demand

Supplementary demand

Joint demand

Composite demand
54. If the income of the consumers falls it would lead to condition of ___________________

Increase in the demand of normal goods and decrease in the demand of inferior goods

Increase in the demand of substitute goods and decrease in the demand of inferior goods

Increase in the demand of normal goods and decrease in the demand of complementary goods

Decrease in the demand of normal goods and increase in the demand of inferior goods

55. Which one of the following is not an assumption of the law of demand?

Consumer tastes and preferences changes

The income of the consumer remains constant

Price of related goods remains unchanged

Consumer expectations do not change

56. Economics is also considered as ___________________ as it deals with studying the behavior of
human beings and their relationship in a society.

Art

Science

Social science

All of the given options

57. Which one of the following is not a type of inflation?

Moderate inflation

Hyperinflation

Galloping inflation

Hypoinflation
58. The nature of economics is that it is ___________________.

Art

Science

Social science

All of the given options

59. If the total revenue realized from sale of 10 fans is Rs 2000 and that from sale of 14 fans is Rs 4000.
marginal revenue is ___________________

600

750

500

450

60. Graph ___________________

Isoquant (L-shaped)

Isocost

Expansion path

Producer’s equilibrium

61. The given graph represents ___________________

Perfectly inelastic demand

Perfectly Elastic demand

Relatively elastic demand

Unitary elastic demand

62. What would be the equilibrium price if demand curve is given by D= 15-8P and supply curve is
given as S=2P?

1.5

2.3
THEORY QUESTIONS:
1. Explain the influence of income of consumers on the consumption of different types of
commodities.

2. What is meant by cardinal and ordinal utility approach?

3. What is perfect Competition? Explain its Prime Features.