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1000+ Basics of Economics MCQ for FCI Recruitment [Solved]

Thursday 9th of March 2023

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1. Which of the following theories of trade cycle was presented by William Jevons?
A. Sunspot Theory
B. Monetary Theory
C. Saving-Investment Theory
D. Innovation Theory
Answer : A
2. Under monopolistic competition, the firms compete alongwith:
A. Supreme powers
B. Discretionary powers
C. Low powers
D. None of the above
Answer : B
3. Loanable funds theory of Interest was developed by:
A. Wicksell
B. Robert San
C. Ruskin
D. J.B.Say
Answer : A
4. The main contribution of Prof. Lord Keynes is in the field of:
A. Determination of the rate of interest
B. Determination of the market price
C. Determination of the wage rate
D. Determination of production of firm
Answer : A
5. Now-a-days in real life, we are unable to fined:
A. Monopoly
B. Perfect competition
C. Imperfect competition
D. Monopolistic competition
Answer : B
6. Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
A. Negative
B. Positive
C. Infinite
D. Zero
Answer : D
7. According to Chamberline, in monopolistic competition, differentiation is determined by:
A. Choices
B. Preferences
C. Both a and b
D. None of the above
Answer : C
8. In the case of two factor inputs which are neither perfectly complementary nor perfect substitutes, the iso-product curve will be:
A. A downward sloping straight line
B. A downward sloping curve
C. An upward rising curve
D. Right angled iso-quants
Answer : B
9. Which cost increases continuously with the increase in production?
A. Average cost
B. Marginal cost
C. Fixed cost
D. Variable cost
Answer : D
10. If the marginal utility is divided by the price of the commodity then it is called:
A. Real Marginal Utility
B. Gross Marginal Utility
C. Weighted Marginal Utility
D. Money Marginal Utility
Answer : C
11. Supply of commodity is a:
A. A stock concept
B. A flow concept
C. Both stock and flow
D. None of the above
Answer : B
12. If by doubling all inputs in the long run output is less than double, it is a case of:
A. Increasing returns to scale
B. Decreasing returns to scale
C. Constant returns to scale
D. Variable returns to scale
Answer : B
13. In the long run average costs curve, a firm can change:
A. Labour
B. Capital
C. Both of them
D. None of them
Answer : C
14. The ordinal approach was presented by:
A. Marshal
B. J.R.Hicks
C. Adam smith
D. Rostow
Answer : B
15. The slutsky demand curve includes:
A. Income effect
B. Price effect
C. Substitution effect
D. None of the above
Answer : B
16. The average product is given as:
A. Q.L
B. Q- L
C. Q+ L
D. Q/L
Answer : D
17. If under perfect competition, in the short period, price does not cover the average cost completely, the firm will even then stay in the market as long as:
A. The average fixed cost is covered
B. The average variable cost is covered
C. Some profit is earned
D. The entrepreneurs enjoy producing
Answer : B
18. The short-run periods in monopolistic competition are:
A. Parallel to each other
B. Dependent upon each other
C. Independent of each other
D. Zero
Answer : C
19. The MRTS along an iso-quant goes on to:
A. Appear
B. Diminish
C. Prominent
D. Increase
Answer : B
20. Each firm in cournot model can:
A. not ignor the activities of the rival
B. ignor the activities of the rival
C. both a and b
D. none of the above
Answer : A
21. Substitution effect means a consumer
A. Shifts away from the commodity the price of which has fallen
B. Shifts in favour of a commodity the price of which has risen
C. Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
D. None of the above
Answer : C
22. Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
A. An increase in demand
B. A decrease in demand
C. An increase in supply
D. A decrease in supply
Answer : D
23. If a straight line supply curve passes through the point of origin O, the elasticity of supply is:
A. Zero
B. Infinity
C. Unity
D. More than unity
Answer : C
24. With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
A. An optimum firm
B. A representative firm
C. An oxford firm
D. A marginal firm
Answer : D
25. A firms profit is equal to:
A. R-C
B. R>C
C. RD. R=C
Answer : A
26. Engel curves shows that:
A. How commoditys consumption rate differs at various levels of price
B. How commoditys consumption rate differs at various levels of satisfaction
C. How commoditys consumption rate differs at various levels of income
D. How commoditys consumption rate differs at various levels of taxes
Answer : C
27. According to current thinking, the law of diminishing returns applies to:
A. All fields of production
B. Agriculture
C. Mining
D. Manufacturing
Answer : A
28. The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
A. Monopolistic competition
B. Imperfect competition
C. Monopoly
D. Perfect competition
Answer : D
29. If the commodity is inferior then the increase in income of the consumer results in:
A. More purchase
B. Less purchase
C. Same purchase
D. None of the above
Answer : B
30. In monopolistic competition, the firm take advantage due to customers:
A. Similar choices
B. Unlimited choices
C. Differential choices
D. Few choices
Answer : C
31. Which describes a competitive market?
A. Many buyers and many sellers
B. One seller, many buyers
C. One buyer, many sellers
D. Few sellers, many buyers
Answer : A
32. The slope of the iso-cost line (budget line) is determined by:
A. Pricing of two factors
B. Productivity of the two factors
C. Degree of substitutability of two factors
D. None of the above
Answer : A
33. In finding equilibrium position of a profitmaximizing firm, which technique is most convenient?
A. Total revenue and total cost technique
B. Marginal revenue and marginal cost technique
C. Demand and supply technique
D. None of the above
Answer : B
34. An indifference curve normally slopes downward from:
A. Left to right
B. Right to left
C. Both of them
D. None of them
Answer : A
35. Change in quantity demanded (expansion and contraction of demand) is:
A. Due to change in price while other factors remain constant
B. Due to change in factors other than price
C. Both a and b
D. None of the above
Answer : A
36. In case of perfect competition, TR curve rises at a:
A. Constant rate
B. Decreasing rate
C. Increasing rate
D. None of the above
Answer : A
37. The long run average cost curve is:
A. Cup-shaped
B. Oval-shaped
C. Saucer-shaped
D. Glass-shaped
Answer : C
38. The average cost curve is a geometrical illustration of:
A. Hydraulic function
B. Cubic function
C. Pentagonic function
D. Quadratic function
Answer : D
39. Under monopolistic competition, in long-run there is:
A. Ban on exit
B. Ban on entry
C. Free entry
D. Free entry and exit
Answer : D
40. Income -elasticity of demand will be zero when a given change in income brings about:
A. A less than proportionate change in quantity demanded
B. A more than proportionate change in quantity demanded
C. The same proportionate change in quantity demanded
D. No change in quantity demanded
Answer : D
41. Monopolistic firm can fix:
A. Both price and output
B. Either price or output
C. Neither price nor output
D. None of the above
Answer : B
42. Some economists refer to iso-product curves as:
A. Engels curve
B. Production indifference curve
C. Budget line
D. Ridge line
Answer : B
43. Karl Marx:
A. Led the Russian Revolution
B. Provided the theoretical basis for socialism(communism)
C. Developed his theory in response to the Great Depression of the 1930s
D. None of the above
Answer : B
44. In the case of an inferior good, the income effect:
A. Partially offsets the substitution effect
B. Reinforces the substitution effect
C. Is equal to the substitution effect
D. More than offsets the substitution effect
Answer : A
45. The Tit for Tat strategy means cooperation by the 2nd firm if:
A. 1st firm does not cooperate
B. 1st firm cooperates
C. 1st firm collapses
D. None of the above
Answer : B /div>
46. The long-run AC curve is constructed from:
A. The minimum points on all short-run AC curves
B. The lowest points on the short-run MC curve
C. The minimum points on the short run AVC curves
D. It has nothing to do with the short-run cost curves
Answer : A
47. The slope of isocost line (budget line) shows:
A. Capital labor ratio
B. Labor wage ratio
C. Factor price ratio
D. Factor labor ratio
Answer : C
48. A firm is a sum of persons who convert:
A. Goods into services
B. Output into inputs
C. Inputs into outputs
D. None of the above
Answer : C
49. If a new production technology for producing compact discs is developed and new firms are attracted to this field:
A. The supply curve will shift down or right
B. The supply curve will shift up or left
C. Both demand and supply curve shifts would occur
D. None of the above
Answer : A
50. The Substitution Effect (S.E) is always:
A. Negative
B. Zero
C. Positive
D. Infinite
Answer : A
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