Economics
Economics MCQs with Answers and Explanations | Microeconomics & Macroeconomics Objective Questions.
Strengthen your knowledge of Economics with a rich collection of MCQs with answers and detailed explanations. Topics include microeconomics, macroeconomics, demand and supply, national income, inflation, monetary policy, fiscal policy, international trade, economic growth, and development economics. These multiple-choice questions are designed for students, teachers, and candidates preparing for competitive exams (CSS, PMS, NTS, FPSC, PPSC, UPSC, MBA, BBA, etc.). Each MCQ is supported by a clear solution and explanation to improve conceptual clarity, analytical ability, and exam performance. Perfect for self-assessment, practice, and revision in the field of Economics.
A) Zero
B) Positive
C) Maximum
D) Negative
✅ ANSWER: B
At the point of satiety, marginal utility is positive. Goods where there is a point of satiety. This situation is common in food. To the point of satiety, the marginal utility is positive; after that point, the marginal utility is negative.
A) Ministry of Finance
B) Planning Commission
C) Government of India
D) Indian Statistical Institute
✅ ANSWER: A
The Department of Economic Affairs, Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget.It is prepared under the guidance of the Chief Economic Adviser, Finance Ministry. It is the ministry’s view on the annual economic development of the country.
A) Straight line
B) Concave
C) Backward leading
D) Convex
✅ ANSWER: D
If marginal opportunity cost is falling, the PPF would be convex. Pay Per Click curve can be convex to the origin when the opportunity cost decreases. This can happen only when less and less units are foregone of first commodity for the introduction of additional unit of another commodity. Due to increasing marginal opportunity cost. PPC becomes concave to origin.
A) Maximum
B) Minimum
C) Zero
D) Not predictable
✅ ANSWER: C
Consumer’s surplus left with the consumer under price discrimination is Zero.
A) Marginal revenue curve always slopes upward
B) Marginal revenue curve always slopes downwards
C) Marginal revenue is always equal to average revenue
D) Marginal revenue is always less than average revenue
✅ ANSWER: C
In case of perfect competition in the market marginal revenue is always equal to average revenue. They coincide because marginal revenue is equal to average revenue at every output quantity. The equality between marginal revenue and average revenue is the result of perfect competition.
A) Preparation of the plan
B) Implementation of the plan
C) Financing of the plan
D) None of the above
✅ ANSWER: A
Preparation of the plan is the task of the Planning Commission. The Planning Commission is charged with the responsibility of making assessment of all resources in the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.
A) Falls
B) Rises
C) Remains constant
D) All of the above
✅ ANSWER: D
The average cost is U-shaped because an increase in output increases the returns and reduces the total cost. As the curve continues to slope downwards, it enters a phase of constant returns where the returns and output are at their optimum level. After the constant level, continued increase in output stops yielding any further increments in the returns (diminishing returns) and the costs begin to rise, forcing the curve to start sloping upwards.
A) Rs.60
B) Rs.30
C) Rs.40
D) Rs.20
✅ ANSWER: B
Average fixed cost per unit is Rs. 20 when 6 units of product produced.
Total fixed cost = 6 X 20 = Rs. 120.
Therefore fixed cost per unit when production is 4 units = 120/4 = Rs.30
A) Quantity of labour is fixed
B) Quantity of output is fixed
C) Quantity of capital is fixed
D) Quantity of any one factor is fixed
✅ ANSWER: D
During short period, diminishing returns may follow because quantity of any one factor is fixed.
A) Rising cost curves
B) Rising and declining cost curves
C) Different elasticity of demand
D) Equal elasticity of demand
✅ ANSWER: C
Discriminating monopoly is possible if two markets have different elasticity of demand. Price discrimination is possible only when the buyers from different sub-markets are willing to purchase the same product at different prices. If the elasticity of demand is the same, then the effect of the price change on the buyer will be identical too.