MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 78 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
If a 4% increase in price leads to a increase in the quantity supplied of 8% ? |
| A. | Supply is price elastic |
| B. | Supply is income elastic |
| C. | Price elasticity of demand is -2 |
| D. | Price elasticity of supply is -2 |
| Answer» B. Supply is income elastic | |
| 52. |
For an inferior good ? |
| A. | The price elasticity of demand is negative: the income elasticity of demand is negative |
| B. | The price elasticity of demand is positive the income elasticity of demand is negative |
| C. | The price elasticity of demand is negative the income elasticity of demand is positive |
| D. | The price elasticity of demand is positive the income elasticity of demand is positive |
| Answer» B. The price elasticity of demand is positive the income elasticity of demand is negative | |
| 53. |
For a normal good ? |
| A. | The price elasticity of demand is negative the income elasticity of demand is negative |
| B. | The price elasticity of demand is positive the income elasticity of demand is negative |
| C. | The price elasticity of demand is negative the income elasticity of demand is positive |
| D. | The price elasticity of demand is positive; the income elasticity of demand is positive |
| Answer» D. The price elasticity of demand is positive; the income elasticity of demand is positive | |
| 54. |
Firms are assumed to ________ costs and to ________ profits? |
| A. | incur, desire |
| B. | pay, make |
| C. | charge earns |
| D. | minimize, maximize |
| Answer» E. | |
| 55. |
Economics assumes that people consume goods and services to achieve ? |
| A. | Status |
| B. | Prestige |
| C. | Utility |
| D. | Self-esteem |
| Answer» D. Self-esteem | |
| 56. |
Demand for a normal product may shift outwards if ? |
| A. | Price decreases |
| B. | The price of a substitute falls |
| C. | The price of a complement rises |
| D. | income falls |
| Answer» C. The price of a complement rises | |
| 57. |
Demand curves are derived while holding constant ? |
| A. | incomes, tastes, and the price of other goods |
| B. | income, tastes, and the price of the good |
| C. | income and tastes |
| D. | tastes and the price of other goods |
| Answer» B. income, tastes, and the price of the good | |
| 58. |
Average income increase from Rs20,000 p.a to Rs 22,000 p.a Quantity demanded per year increases 5000 to 6000 units. Which of the following is correct ? |
| A. | Demand is price inelastic |
| B. | The good is inferior |
| C. | Income elasticity is -2 |
| D. | The product is normal |
| Answer» E. | |
| 59. |
An upward shift in marginal cost _____ output and an upward shift in marginal revenue ______ output? |
| A. | reduces; reduces |
| B. | reduces; increases |
| C. | increases; increases |
| D. | increases; reduces |
| Answer» C. increases; increases | |
| 60. |
An increase in the price of a complement for product A would ? |
| A. | Shift demand for Product A outwards |
| B. | Shift demand for product A inwards |
| C. | Shift supply for product A outwards |
| D. | Shift supply for product A inwards |
| Answer» C. Shift supply for product A outwards | |
| 61. |
An increase in the costs of production will ? |
| A. | Shift demand outwards |
| B. | Shift demand inwards |
| C. | Shift supply outwards so more is supplied at each and every price, all other things unchanged |
| D. | Shift supply inwards |
| Answer» E. | |
| 62. |
An increase in productivity should ? |
| A. | Lead to a contraction of supply |
| B. | Lead to an expansion of supply |
| C. | Lead to a shift in supply outwards (i.e more supplied at each and every price) |
| D. | Lead to a higher equilibrium and lower equilibrium quantity |
| Answer» D. Lead to a higher equilibrium and lower equilibrium quantity | |
| 63. |
An increase in price from 25 pence to 30 pence leads to an increase in the quantity supplied from 40 units to 44 units. The price elasticity of supply is ? |
| A. | +2 |
| B. | +0.5 |
| C. | -2 |
| D. | -0.5 |
| Answer» C. -2 | |
| 64. |
An increase in price all other things unchanged leads to ? |
| A. | Shift demand outwards |
| B. | Shift demand inwards |
| C. | A contractions of demand |
| D. | An extension of demand |
| Answer» D. An extension of demand | |
| 65. |
An increase in income should ? |
| A. | Shift demand for an inferior product outward |
| B. | shift demand for an inferior product inward |
| C. | shift supply for an inferior product outward |
| D. | Shift supply for an inferior product inward |
| Answer» C. shift supply for an inferior product outward | |
| 66. |
An increase in aggregate demand will have most effect on prices if ? |
| A. | Aggregate supply is price inelastic |
| B. | Aggregate supply is price elastic |
| C. | Aggregate supply has a unitary price elasticity |
| D. | Aggregate demand is price inelastic |
| Answer» C. Aggregate supply has a unitary price elasticity | |
| 67. |
An increase in aggregate demand if aggregate supply is totally inelastic will ? |
| A. | increase price but not output |
| B. | increase output but not price |
| C. | increase output and price |
| D. | decrease output and price |
| Answer» B. increase output but not price | |
| 68. |
Aggregate demand will increase if ? |
| A. | consumption falls |
| B. | investment falls |
| C. | Exports fall |
| D. | imports fall |
| Answer» E. | |
| 69. |
Adding up the quantities demanded of a good by different people facing the same price gives us the ? |
| A. | Supply curve |
| B. | Market demand curve |
| C. | Demand curve |
| D. | Market supply curve |
| Answer» C. Demand curve | |
| 70. |
According to the law of diminishing utility ? |
| A. | Utility is at a maximum with the first unit |
| B. | Increasing units of consumption increase the marginal utility |
| C. | Marginal product will fall as more units are consumed |
| D. | Total utility will rise at a falling rate as more units are consumed |
| Answer» E. | |
| 71. |
A supply curve that starts at the origin has ? |
| A. | A price elasticity of supply greater than one |
| B. | A price elasticity of supply equal to one |
| C. | A price elasticity of supply less than one |
| D. | A positive price elasticity of supply |
| Answer» C. A price elasticity of supply less than one | |
| 72. |
A shift in aggregate supply is likely to ? |
| A. | Reduce the general price level and reduce national income |
| B. | Reduce the general price level and increase national income |
| C. | Increase the general price level and reduce national income |
| D. | Increase the general price level and increase national income |
| Answer» B. Reduce the general price level and increase national income | |
| 73. |
A movement along the demand curve to the left may be caused by ? |
| A. | a decrease in supply. |
| B. | a rise in income |
| C. | a fall in the number of substitute goods |
| D. | a rise in the price of inputs |
| Answer» B. a rise in income | |
| 74. |
A measurement showing how quantity demanded varies with income is the ? |
| A. | Price elasticity of demand |
| B. | Cross-price elasticity of demand |
| C. | budget elasticity of demand |
| D. | income elasticity of demand |
| Answer» E. | |
| 75. |
A firm that makes profit in addition to normal profit is making ? |
| A. | Economic profit |
| B. | Accounting profit |
| C. | Normal profit |
| D. | supernormal profit |
| Answer» E. | |
| 76. |
A firm that breaks even after all economic costs are paid is earning ? |
| A. | Economic profit |
| B. | Accounting profit |
| C. | Normal profit |
| D. | Supernormal profit |
| Answer» D. Supernormal profit | |
| 77. |
A fall in price ? |
| A. | Will cause an inward shift of demand |
| B. | Will cause an outward shift of supply |
| C. | May be caused by a fall in demand |
| D. | Leads to a higher level of production |
| Answer» D. Leads to a higher level of production | |
| 78. |
A contraction in supply occurs when ? |
| A. | Demand shifts outwards |
| B. | The supply curve shifts inwards |
| C. | The quantity supplied falls when the price falls |
| D. | The supply curve shifts outwards |
| Answer» D. The supply curve shifts outwards | |