1000+ Basics of Economics MCQ for SSC Stenographer [Solved]

1. A firm can never produce in the middle area of input space, in case of:
A. Concave isoquant
B. Convex isoquant
C. Constant isoquant
D. None of the above
Answer : A

2. The Law of Equi-Marginal Utility refers to:
A. Marginal utility of commodity X
B. Marginal utility of commodity Y
C. Marginal utility per rupee spent on X and Y commodities
D. None of the above
Answer : C

3. When at a given price, the quantity demanded of a commodity is more than the quantity supplied, there will be:
A. An upward pressure on price
B. A downward pressure on price
C. Price will remain unaffected
D. All of the above
Answer : A

4. Of the following, which one corresponds to fixed cost?
A. Payments for raw materials
B. Labor cost
C. Transportation charges
D. Insurance premium on property
Answer : D

5. All money costs can be regarded as:
A. Social costs
B. Opportunity costs
C. Explicit costs
D. Implicit costs
Answer : C

6. When total product (TP) is maximum:
A. MP is negative
B. MP is infinite
C. MP is zero
D. None of the above
Answer : C

7. In perfectly competitive markets, the profit maximization rule can be represented by:
A. MR=ATC
B. P=ATC
C. P=MC
D. P=AC
Answer : C

8. In second degree price discrimination, monopolist takes away :
A. All of the consumer surplus
B. All of the producer surplus
C. Some part of the consumer surplus
D. None of them
Answer : C

9. When the output of a firm is increasing, its average fixed cost:
A. Declines continuously
B. Remains constant
C. Rises continuously
D. Declines and then rises
Answer : A

10. If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:
A. Contraction of demand
B. Decrease in demand
C. Increase in demand
D. Extension of demand
Answer : B

11. The basic subject matter of economics is:
A. Money
B. Capital resources
C. Scarcity
D. Inflation
Answer : B

12. In the theory of firm, Chamberline presented the idea of:
A. Rising cost
B. Falling cost
C. Rising input
D. Falling input
Answer : B

13. The ordinary demand curve is also called:
A. Marshallian demand curve
B. Hicksian demand curve
C. Slutsky demand curve
D. All the above
Answer : A

14. Used cars are sold in:
A. Perfectly competitive international market
B. Perfectly competitive national market
C. Imperfect international market
D. Imperfect local market
Answer : D

15. Some economists refer to iso-product curves as:
A. Engels curve
B. Production indifference curve
C. Budget line
D. Ridge line
Answer : B

16. When AC curve falls, MC curve falls:
A. More than AC curve
B. Less than AC curve
C. Equal to AC curve
D. None of the above
Answer : A

17. Cross-elasticity of demand or cross-price elasticity between two perfect complements will be:
A. Negative
B. Positive
C. Infinite
D. Negative infinite
Answer : D

18. In a perfectly competitive market, suppliers must know:
A. The incomes of consumers
B. The price of the good
C. What other commodities households could substitute for the good
D. Consumers expectations of the future
Answer : B

19. Who wrote A Contribution to the Theory of Trade Cycle?
A. N.Kaldor
B. J.R.Hicks
C. A.C.Pigou
D. J.M.Keynes
Answer : B

20. When the law of demand operates the demand curve:
A. Slopes downward
B. Slopes upward
C. Becomes horizontal
D. Becomes vertical
Answer : A

21. Law of Variable Proportions is regarding in:
A. Short-Run
B. Long-Run
C. Medium-Run
D. None of the above
Answer : A

22. The standard form of demand function is:
A. Q = a- bP
B.
C. Y = a- bP
D. Q = a+ bP
Answer : A

23. Contraction in demand occurs when:
A. Price increases and demand decreases
B. Price increases but demand also increases
C. Price remains constant but demand falls down
D. Price falls down but demand remains constant
Answer : A

25. Revealed Preference Theory was presented by:
A. Ricardo
B. Adam Smith
C. Pigou
D. Samuelson
Answer : D

26. MC is given by:
A. The slope of the TVC curve
B. The slope of the TVC curve but not the slope of the TC curve
C. The slope of the TC curve but not by the slope of the TVC curve
D. Either the slope of the TVC curve or the slope of the TC curve
Answer : D

27. The production process is:
A. Consuming goods and services
B. Transforming inputs into outputs
C. Wasting goods and services
D. Buying goods and services
Answer : B

28. The long run total cost is attained by:
A. LMC.Q
B. AC.Q
C. LC.Q
D. LAC.Q
Answer : D

29. In monopolistic competition, the firms follow:
A. Exotic behavior
B. Sympathetic behavior
C. Myopia behavior
D. Regular behavior
Answer : C

30. If Marginal Utility (MU) is zero, then total utility is:
A. Maximum
B. Minimum
C. Infinite
D. Not measureable
Answer : A

31. If a straight line supply curve makes an intercept on the X-axis, the elasticity of supply is:
A. Equal to unity
B. Less than unity
C. More than unity
D. Zero
Answer : B

32. In the long-run:
A. Fixed cost will be greater than variable cost
B. Variable costs will be greater than fixed costs
C. All costs are variable costs
D. All costs are fixed costs
Answer : C

33. MC = MR = AC = AR shows the long run equilibrium position of the:
A. Competitive firm
B. Oligopolistic firm
C. Monopolist firm
D. None of the above
Answer : A

34. A demand curve is not related to:
A. The price of the commodity
B. The time period
C. The price of substitutes
D. Any of the above
Answer : C

35. When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will:
A. Positive
B. Negative
C. Zero
D. None of the above
Answer : C

36. In microeconomics, we study:
A. Aggregates of the economy
B. Few units of the economy
C. Large units of the economy
D. Individual units of the economy
Answer : D

37. If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
A. Total utility will increase by 6 units
B. The marginal utility per rupee is 6
C. The consumer will buy more because marginal utility is positive
D. The consumer obtained an extra54 units
Answer : B

38. Increase in demand occurs when:
A. The price falls and the demand also falls down
B. The price increases but demand falls down
C. The price increases the demand remains constant and when the price remains constant the demand goes up
D. The price remains constant but demand falls
Answer : C

39. When a consumer is satisfied with his spending pattern, he is said to be in:
A. Balance stat
B. Equilibrium
C. Disequilibrium
D. Authenticated form
Answer : B

40. Marginal utility equals:
A. Slope of total utility curve
B. Slope of average utility curve
C. Slope of marginal utility curve
D. Slope of total revenue curve
Answer : A

41. The budget line is described by each of the following except:
A. Prices of products are assumed to be fixed
B. The consumer need not to spend all his income
C. Consumer income is assumed to be fixed
D. The slope represents relative prices
Answer : B

42. 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

43. Slope of a demand curve is:
A. Not relevant to elasticity
B. The only factor determining elasticity
C. Only one of the factors influencing elasticity
D. None of the above
Answer : B

44. Discriminating monopoly implies that the monopolist charges different prices for his commodity:
A. From different groups of consumers
B. For different uses
C. At different places
D. Any of the above
Answer : D

45. Cartel is associated with:
A. Collusive oligopoly
B. Non-collusive oligopoly
C. Cartel
D. Perfect competition
Answer : A

46. Ceteris paribus clause in the law of demand means:
A. The price of substitute does not change
B. The taste of the consumer does not change
C. The income of the consumer does not change
D.All of the above
Answer : D

47. The relationship between MC and MP shown by the marginal cost concept is:
A. Inverse
B. Direct
C. Negative
D. Positive
Answer : A

48. If a good is an inferior good then an increase in incomes of the consumers will:
A. Increase demand for the good
B. Increase supply of the good
C. Reduce the equilibrium price of the good
D. None of the above
Answer : C

49. External economies are witnessed in:
A. A rising supply curve
B. A rising demand curve
C. A falling supply curve
D. A falling demand curve
Answer : D

50. MRSxy measures:
A. The amount of Y a consumer is willing to give up to obtain one additional unit of X and still remain on the same indifference curve
B. The amount of X a consumer is willing to give up to obtain one additional unit of Y and still remain on the same indifference curve
C. The amount of Y a consumer is willing to give up to obtain one additional unit of X and move to a higher indifference curve
D. The amount of X a consumer is willing to give up to obtain one additional unit of Y and move to a higher indifference curve
Answer : B