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Basics of Economics MCQ - Multiple Choice Question and Answer

Basics of Economics MCQ with detailed explanation for interview, entrance and competitive exams. Explanation are given for understanding.

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Question No : 1
In a perfectly competitive market, suppliers must know:

The incomes of consumers
The price of the good
What other commodities households could substitute for the good
Consumers expectations of the future

Question No : 2
If there are many producers, each of whom has an individual production possibility curve, then the lowest marginal cost producer of good X is the producer:

Who must sacrifice fewer units of every other goods than any other producer
Who can produce more X per hour than any other producer
Who must sacrifice more units of every other goods than any other producer
None of the above

Question No : 3
If the price of coffee increases, you would predict that:

Demand curve for sugar will shift downward (leftward)
Supply curve for sugar will shift leftward (upward)
Demand curve for bread will shift downward (leftward)
None of the above

Question No : 4
Stable cobweb model is a:

Simple model
Dynamic model
Both of them
None of them

Question No : 5
The main objective of the firm is to:

Face losses
Avoid losses
Bear losses
Make economic decisions

Question No : 6
Economic problems arise because:

Wants are unlimited
Resources are scarce
Scarce resources have alternative uses
All of the above

Question No : 7
Classical production function is:

Q = f(L)
U =f(X)
Q =f(K)
Q =f(L,K)