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.
| 301. |
The law of diminishing returns only applies in cases where: |
| A. | there is increasing scarcity of factors of production. |
| B. | the price of extra units of a factor is increasing. |
| C. | there is at least one fixed factor of production. |
| D. | capital is a variable input. |
| Answer» D. capital is a variable input. | |
| 302. |
Implicit costs are: |
| A. | equal to total fixed costs. |
| B. | comprised entirely of variable costs. |
| C. | "payments" for self-employed resources. |
| D. | always greater in the short run than in the long run. |
| Answer» D. always greater in the short run than in the long run. | |
| 303. |
If the percentage increase in quantity of a commodity demanded is its price, thecoefficient of price elasticity of demand is: |
| A. | greater than 1 |
| B. | equal to 1 |
| C. | less than 1 |
| D. | zero |
| Answer» D. zero | |
| 304. |
A demand curve which takes the form of horizontal line parallel to quantity axisillustrates elasticity which is: |
| A. | zero |
| B. | infinite |
| C. | greater than one |
| D. | less than one |
| Answer» E. | |
| 305. |
A fall in the price of a commodity whose demand curve is a rectangular hyperbola causestotal expenditure on the commodity to: |
| A. | increases |
| B. | decrease |
| C. | remains unchanged |
| D. | any of the above |
| Answer» D. any of the above | |
| 306. |
When an individual’s income falls (while everything else remains the same), his demandfor an inferior good: |
| A. | increases |
| B. | decrease |
| C. | remains unchanged |
| D. | we cannot say without additional information |
| Answer» C. remains unchanged | |
| 307. |
Selling at a lower price in export market and at a higher price at home market is called |
| A. | export subsidy |
| B. | dumping |
| C. | price cut |
| D. | all the above |
| Answer» C. price cut | |
| 308. |
In economics …….. means ‘a state of rest ‘or ‘stability’ |
| A. | depression |
| B. | equilibrium |
| C. | maturity |
| D. | growth |
| Answer» C. maturity | |
| 309. |
In business cycle concept, the period of “long wave” is of; |
| A. | 25 years |
| B. | 50 years |
| C. | 100 years |
| D. | 200 years |
| Answer» C. 100 years | |
| 310. |
Perfect competition is characterized by |
| A. | large number of buyers and sellers |
| B. | homogeneous product |
| C. | free entry and exit of firms |
| D. | all the above |
| Answer» E. | |
| 311. |
The product under monopolistic competition are |
| A. | differentiated with close substitute |
| B. | perfect substitute |
| C. | differentiated without close substitute |
| D. | homogeneous |
| Answer» B. perfect substitute | |
| 312. |
Selling cost is the feature of the market form |
| A. | monopoly |
| B. | monopolistic competition |
| C. | oligopoly |
| D. | none of these |
| Answer» C. oligopoly | |
| 313. |
The market with a single producer |
| A. | perfect competition |
| B. | monopolistic competition |
| C. | oligopoly |
| D. | monopoly |
| Answer» E. | |
| 314. |
In a perfectly competitive market, individual firm |
| A. | cannot influence the price of its product |
| B. | can influence the price of its product |
| C. | can fix the price of its product |
| D. | can influence the market force |
| Answer» B. can influence the price of its product | |
| 315. |
In the case of perfect elasticity, the demand curve is |
| A. | vertical |
| B. | horizontal |
| C. | flat |
| D. | steep |
| Answer» C. flat | |
| 316. |
Perfect elasticity is known as |
| A. | finite elastic |
| B. | infinite elastic |
| C. | unitary elastic |
| D. | zero elastic |
| Answer» C. unitary elastic | |
| 317. |
Demand for milk, sugar, tea for making tea, is an example of |
| A. | composite demand |
| B. | derivative demand |
| C. | joint demand |
| D. | direct demand |
| Answer» D. direct demand | |
| 318. |
Higher the price of certain luxurious articles, higher will be the demand, this concept iscalled |
| A. | giffen effects |
| B. | veblen effects |
| C. | demonstration effects |
| D. | both b & c above |
| Answer» C. demonstration effects | |
| 319. |
The Giffen goods are ………. Goods |
| A. | inferior goods |
| B. | superior goods |
| C. | related goods |
| D. | same goods |
| Answer» B. superior goods | |
| 320. |
When the quantity demanded falls due to a rise in price, it is called |
| A. | extension |
| B. | upward shift |
| C. | downward shift |
| D. | contraction |
| Answer» E. | |
| 321. |
When the quantity demanded of a commodity rises due to a fall in price, it is called |
| A. | extension |
| B. | upward shift |
| C. | downward shift |
| D. | contraction |
| Answer» B. upward shift | |
| 322. |
The change in demand due to change in price only, where other factors remainingconstant, it is called………. |
| A. | shift in demand |
| B. | extension of demand |
| C. | contraction of demand |
| D. | both extension and contraction |
| Answer» E. | |
| 323. |
Generally demand curve have ………… |
| A. | negative slope |
| B. | positive slope |
| C. | horizontal line |
| D. | vertical line |
| Answer» B. positive slope | |
| 324. |
Law of demand shows the functional relationship between _______ and quantitydemanded |
| A. | supply |
| B. | cost |
| C. | price |
| D. | requirements |
| Answer» D. requirements | |
| 325. |
Basic assumptions of law of demand include |
| A. | prices of other goods should change. |
| B. | there should be substitute for the commodity. |
| C. | the commodity should not confer any distinction. |
| D. | the demand for the commodity should not be continuous |
| Answer» D. the demand for the commodity should not be continuous | |
| 326. |
Demand = Desires + …………… + Willingness to pay |
| A. | supply |
| B. | utility |
| C. | want |
| D. | purchasing power |
| Answer» E. | |
| 327. |
.………… is known as the ‘first law in market” |
| A. | law of supply |
| B. | law of consumption |
| C. | law of demand |
| D. | law of production |
| Answer» D. law of production | |
| 328. |
.………… means an attempt to determine the factors affecting the demand of acommodity or service and to measure such factors and their influences |
| A. | demand planning |
| B. | demand forecasting |
| C. | demand analysis |
| D. | demand estimation |
| Answer» D. demand estimation | |
| 329. |
In economics, desire backed by purchasing power is known as |
| A. | utility |
| B. | demand |
| C. | consumption |
| D. | scarcity |
| Answer» C. consumption | |
| 330. |
The demand has three essentials ‐ Desire, Purchasing power and ……….. |
| A. | quantity |
| B. | cash |
| C. | supply |
| D. | willingness to purchase |
| Answer» E. | |
| 331. |
Want satisfying power of commodity is called |
| A. | demand |
| B. | utility |
| C. | satisfaction |
| D. | consumption |
| Answer» C. satisfaction | |
| 332. |
Managerial economics is also called |
| A. | micro economics |
| B. | theory of the firm |
| C. | economics of the firm |
| D. | all of the above. |
| Answer» E. | |
| 333. |
______ is economic theory used in business whereas ______ is economics theory usedin business and non-business organization |
| A. | micro economics, macro economics |
| B. | business economics, managerial economics |
| C. | positive economics and normative economics |
| D. | none of these |
| Answer» C. positive economics and normative economics | |
| 334. |
A recession is: |
| A. | a period of declining unemployment. |
| B. | a period of declining prices |
| C. | a period during which aggregate output declines |
| D. | a period of very rapidly declining prices. |
| Answer» D. a period of very rapidly declining prices. | |
| 335. |
Opportunity cost means |
| A. | the accounting cost minus the marginal benefit. |
| B. | the highest-valued alternative forgone. |
| C. | the monetary costs of an activity. |
| D. | the accounting cost minus the marginal cost |
| Answer» C. the monetary costs of an activity. | |
| 336. |
Inflation is: |
| A. | a decrease in the overall level of economic activity. |
| B. | an increase in the overall level of economic activity. |
| C. | an increase in the overall price level. |
| D. | a decrease in the overall price level. |
| Answer» D. a decrease in the overall price level. | |
| 337. |
The value of an entrepreneur’s resources that she uses in production are known as: |
| A. | explicit costs. |
| B. | sunk costs. |
| C. | operating expenses. |
| D. | implicit costs. |
| Answer» E. | |
| 338. |
The principle reasons behind economic problems |
| A. | unlimited wants |
| B. | limited or scarce of means |
| C. | alternatives uses of means |
| D. | all of the above |
| Answer» E. | |
| 339. |
Managerial utility function is expressed as: |
| A. | u = s (s, m, i) |
| B. | u = s (s, m) |
| C. | u = f (s, m, i) |
| D. | u = f (s, m, i) |
| Answer» D. u = f (s, m, i) | |
| 340. |
Business Economics is also known as…………. |
| A. | managerial economics |
| B. | economics for executives |
| C. | economic analysis for business decisions |
| D. | all the above |
| Answer» E. | |
| 341. |
An input should be so allocated that the value added by the last unit is the same in allcases. |
| A. | opportunity cost principle |
| B. | equi-marginal principle |
| C. | incremental principle |
| D. | discounting principle |
| Answer» C. incremental principle | |
| 342. |
…………a statement in the form of a table that shows the different quantities of a commoditythat a firm or a producer offers for sale in the market at different prices. |
| A. | supply schedule |
| B. | production schedule |
| C. | demand schedule |
| D. | price schedule |
| Answer» B. production schedule | |
| 343. |
…………… is the degree of responsiveness of supply to changes in the price of a good |
| A. | elasticity of demand |
| B. | elasticity of supply |
| C. | both (a) & (b) |
| D. | none of them |
| Answer» C. both (a) & (b) | |
| 344. |
………. for a product is a statement of the relation between the quantity supplied and allfactors affecting that quantity |
| A. | market demand function |
| B. | production function |
| C. | market supply function |
| D. | all of the above |
| Answer» D. all of the above | |
| 345. |
……….. a schedule that depicts the supply by an individual firm or producer of a commodityin relation to its price |
| A. | market price schedule |
| B. | market supply schedule |
| C. | individual supply schedule |
| D. | none of them |
| Answer» D. none of them | |
| 346. |
Which is/are determinants of Supply……. |
| A. | price of the commodity |
| B. | state of technology |
| C. | cost of production |
| D. | all the above |
| Answer» D. all the above | |
| 347. |
……… refers to the quantity of a good or service that producers are willing and able tosell during a certain period under a given set of conditions |
| A. | supply |
| B. | demand |
| C. | price |
| D. | production |
| Answer» B. demand | |
| 348. |
Firms in an oligopoly |
| A. | are independent of each other’s action |
| B. | can each influence the market price |
| C. | charge a price equal to marginal revenue |
| D. | all of these |
| Answer» C. charge a price equal to marginal revenue | |
| 349. |
If the income and substitution effect of a price increase works in the same direction thegood whose price has changed is a |
| A. | giffen goods |
| B. | inferior goods |
| C. | normal goods |
| D. | superior |
| Answer» D. superior | |
| 350. |
Analysis of long run and short run affects of decisions on revenue as well as costs is based on |
| A. | principle of time perspective |
| B. | equi‐marginal principle |
| C. | incremental principle |
| D. | none of these |
| Answer» B. equi‐marginal principle | |