MCQOPTIONS
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MCQOPTIONS
This section includes 2956 Mcqs, each offering curated multiple-choice questions to sharpen your UPSC IAS Exam knowledge and support exam preparation. Choose a topic below to get started.
| 601. |
The Long run Average Cost curve (LAC) in modern cost theory is roughly |
| A. | u shaped |
| B. | saucer shaped |
| C. | l shaped |
| D. | rectangular hyperbola |
| Answer» E. | |
| 602. |
The saucer-type of modern Short run Average Variable Cost (SAVC) represents |
| A. | excess capacity |
| B. | managerial costs |
| C. | load factors |
| D. | reserve capacity |
| Answer» C. load factors | |
| 603. |
If a firm’s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which oneamong the following is the marginal cost of producing the 7th unit |
| A. | 46 |
| B. | 2 |
| C. | 36 |
| D. | 42 |
| Answer» B. 2 | |
| 604. |
The cost that cannot be recovered once spent |
| A. | accounting cost |
| B. | fixed cost |
| C. | implicit cost |
| D. | sunk cost |
| Answer» C. implicit cost | |
| 605. |
MC at any level of output is given by |
| A. | slope of tc curve |
| B. | slope of tvc curve |
| C. | slope of either tc or tvc |
| D. | slope of tfc |
| Answer» D. slope of tfc | |
| 606. |
Cardinal utility analysis to consumer equilibrium was developed by |
| A. | marshall |
| B. | hicks and allen |
| C. | geremy bentham |
| D. | gossen |
| Answer» B. hicks and allen | |
| 607. |
When individuals income falls (everything remain the same) his demand for a normalgood |
| A. | rises |
| B. | falls |
| C. | remains the same |
| D. | negative |
| Answer» C. remains the same | |
| 608. |
The marginal utility curve of income curve is a straight line for |
| A. | risk aversion |
| B. | risk lover |
| C. | Risk neutral |
| D. | all of these |
| Answer» D. all of these | |
| 609. |
If the price elasticity is between 0 and 1, demand is |
| A. | Inelastic |
| B. | elastic |
| C. | perfectly elastic |
| D. | unit elastic |
| Answer» B. elastic | |
| 610. |
Which of the following is called gossans first law |
| A. | Law of substitution |
| B. | Law of equi marginal utility |
| C. | Law of diminishing |
| D. | None of the above |
| Answer» D. None of the above | |
| 611. |
Engel curve for giffen good is |
| A. | Positively sloped |
| B. | Negatively sloped |
| C. | Horizontal straight line |
| D. | Vertical straight line |
| Answer» C. Horizontal straight line | |
| 612. |
An indifference curve is related to: |
| A. | Consumer’s income |
| B. | prices of goods X and Y |
| C. | Total utility from goods X and Y |
| D. | choices and preferences of consumer |
| Answer» E. | |
| 613. |
Indifference curve is always |
| A. | Concave to the origin |
| B. | Convex to the |
| C. | L shaped |
| D. | A straight line |
| Answer» C. L shaped | |
| 614. |
A consumer reaches the point of equilibrium when; |
| A. | MRSxy>Px/Py |
| B. | MRSxy < Px/Py |
| C. | MRSxy=Px/Py |
| D. | MRSxy=Px/Py=MU/TU |
| Answer» D. MRSxy=Px/Py=MU/TU | |
| 615. |
Other things being equal a decrease in demand can be caused by |
| A. | A fall in price of the commodity |
| B. | A fall in income of the consumer |
| C. | A rise in price of the substitute |
| D. | None of these |
| Answer» C. A rise in price of the substitute | |
| 616. |
Price effect is |
| A. | Income effect – substitution effect |
| B. | Substitution effect – income effect |
| C. | Income effect + substitution |
| D. | Income effect + substitution effect- |
| Answer» D. Income effect + substitution effect- | |
| 617. |
A good with a vertical demand curve has a demand with |
| A. | Infinite elasticity |
| B. | unit elasticity |
| C. | Zero elasticity |
| D. | varying elasticity |
| Answer» D. varying elasticity | |
| 618. |
Suppose a rise in the price of peaches from Rs.5.50 to Rs. 6.50 per bushel decreases the quantity demanded from 12,500 to 11,500 bushels. The price elasticity of demand is |
| A. | 0.5 |
| B. | 1000 |
| C. | 2 |
| D. | 1 |
| Answer» B. 1000 | |
| 619. |
Hicks and Allen believed that utility: |
| A. | Cannot be measured |
| B. | Cannot be expressed |
| C. | Can be measured in cardinal |
| D. | Can be measured in ordinal numbers |
| Answer» E. | |
| 620. |
Which of the following pairs represents substitute goods? |
| A. | car and petrol |
| B. | juice and cold drink |
| C. | bread and butter |
| D. | all of these |
| Answer» C. bread and butter | |
| 621. |
The price elasticity of demand can range between |
| A. | Negative one and one |
| B. | zero and infinity |
| C. | zero and one |
| D. | negative infinity and infinity |
| Answer» C. zero and one | |
| 622. |
In case of a convex indifference curve |
| A. | MRS xy is constant |
| B. | MRS xy is increasing |
| C. | MRS xy is negligible |
| D. | MRS xy is diminishing |
| Answer» E. | |
| 623. |
A consumer will start buying less of good- X and more of Good-Y, when |
| A. | MUx/Px = MUm |
| B. | MUx/Px < MUy/Py |
| C. | MUy/Py = MUm |
| D. | MUx/Px>MUy/Py |
| Answer» C. MUy/Py = MUm | |
| 624. |
The basic doctrine of consumers surplus is based on |
| A. | Indifference curve analysis |
| B. | Revealed preference theory |
| C. | Law of substitution |
| D. | Law of diminishing marginal utility |
| Answer» E. | |
| 625. |
Law of demand must fail in case of: |
| A. | normal good |
| B. | giffen goods |
| C. | inferior goods |
| D. | none of these |
| Answer» C. inferior goods | |
| 626. |
Revealed preference theory assumes |
| A. | SARP |
| B. | WARP |
| C. | Both A and B |
| D. | None of the above |
| Answer» C. Both A and B | |
| 627. |
When the expected utility is greater than utility of the certail income |
| A. | person is risk averse |
| B. | person is risk lover |
| C. | person is risk neutral |
| D. | None of the above |
| Answer» C. person is risk neutral | |
| 628. |
Which of the following is not the property of indifference curve: |
| A. | Higher the indifference curves higher the level of satisfaction |
| B. | Two indifference curves cannot intersect each other |
| C. | Indifference curve is concave to origin |
| D. | Indifference curve is downward sloping |
| Answer» D. Indifference curve is downward sloping | |
| 629. |
The slope of indifference curve is equal to: |
| A. | One |
| B. | marginal rate of substitution |
| C. | Marginal utility |
| D. | zero |
| Answer» C. Marginal utility | |
| 630. |
A shift in budget line, when prices are constant, is due to: |
| A. | change in demand |
| B. | change in income |
| C. | change in preferences |
| D. | change in utility |
| Answer» C. change in preferences | |
| 631. |
For a giffen good, when price falls |
| A. | Demand increases at a faster rate |
| B. | Demand decreases |
| C. | Demand remains constant |
| D. | Demand curve has a negative slope |
| Answer» C. Demand remains constant | |
| 632. |
Income consumption curve of an inferior commodity is |
| A. | Positively sloped |
| B. | Backward bending |
| C. | Downward slopping straight |
| D. | Showing constant income effect |
| Answer» C. Downward slopping straight | |
| 633. |
Substitution effect takes place when price of the commodity becomes: |
| A. | relatively cheaper |
| B. | relatively dearer |
| C. | stable |
| D. | both (a) and (b) |
| Answer» E. | |
| 634. |
Marginal utility for money is positive in case of |
| A. | Risk aversion |
| B. | Risk lover |
| C. | Risk neutral |
| D. | all of these |
| Answer» C. Risk neutral | |
| 635. |
Why is indifference curve convex to origin? |
| A. | Due to law of diminishing marginal utility |
| B. | Due to monotonic preferences |
| C. | Due to continuous decline of |
| D. | Both a and b |
| Answer» D. Both a and b | |
| 636. |
“Utility or satisfaction is a subjective concept; therefore it could only be ranked”. The statement supports |
| A. | Cardinal utility theorist |
| B. | Ordinal utility theorist |
| C. | Behavioral theorist of the firm |
| D. | None of the above |
| Answer» C. Behavioral theorist of the firm | |
| 637. |
Strong ordering means |
| A. | Absence of indifference |
| B. | Presence of indifference |
| C. | No difference between different combinations |
| D. | None of the above |
| Answer» B. Presence of indifference | |
| 638. |
Inferior goods are those whose income effect is: |
| A. | negative |
| B. | positive |
| C. | zero |
| D. | none of these |
| Answer» B. positive | |
| 639. |
Total utility is |
| A. | The sum total of marginal utilities |
| B. | total level of satisfaction |
| C. | Increases at a diminishing rate |
| D. | All the above |
| Answer» E. | |
| 640. |
‘Higher the indifference curve higher will be level of satisfaction’. The statement is |
| A. | Always true |
| B. | Always false |
| C. | Sometimes true and sometimes |
| D. | True only if price effect is positive |
| Answer» B. Always false | |
| 641. |
If negative income effect is greater than positive substitution effect : the product will be |
| A. | A normal good |
| B. | An inferior good |
| C. | A giffen good |
| D. | A complementary good |
| Answer» D. A complementary good | |
| 642. |
In case of normal goods, demand curve shows: |
| A. | a negative slope |
| B. | a positive slope |
| C. | zero slope |
| D. | none of these |
| Answer» B. a positive slope | |
| 643. |
Contractionary Fiscal Policy includes: |
| A. | slow economic growth |
| B. | stamp out inflation |
| C. | all of the above |
| D. | none of the above |
| Answer» D. none of the above | |
| 644. |
CENTRAL BANK use contractionary monetary policy |
| A. | to increase govt expenditure |
| B. | to reduce inflation |
| C. | all of the above |
| D. | none of the above |
| Answer» C. all of the above | |
| 645. |
Stagflation results from |
| A. | a shift of the AS curve to the left. |
| B. | a shift of the AS curve to the right. |
| C. | a shift of the AD curve to the left. |
| D. | a shift of the AD curve to the right. |
| Answer» B. a shift of the AS curve to the right. | |
| 646. |
Which one of the following is the objective of fiscal policy? |
| A. | achieve full employment. |
| B. | stabilize the price level. |
| C. | maintain equilibrium in the Balance of Payments. |
| D. | all of the above |
| Answer» E. | |
| 647. |
If inflation is 6% and you receive a 1% raise in your nominal wage, by how much did your real wage change? |
| A. | -5% |
| B. | 1% |
| C. | -6% |
| D. | 6% |
| Answer» B. 1% | |
| 648. |
If the short-run IS–LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will , shifting the curve to the right and returning output to the natural level. |
| A. | increase; IS |
| B. | decrease; IS |
| C. | increase; LM |
| D. | decrease; LM |
| Answer» E. | |
| 649. |
Which of the following is a major influence on AS? |
| A. | The quality of the factors available |
| B. | Consumption |
| C. | Government spending |
| D. | The advice of government |
| Answer» B. Consumption | |
| 650. |
Which of the following is not a component of Aggregate Demand? |
| A. | Saving |
| B. | Investment |
| C. | Consumption |
| D. | Net Exports |
| Answer» B. Investment | |