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.
Perfectly competitive
Monopoly
Oligopoly
Monopolistically competitive
✅ The correct answer is D.
The structure of the cold drink industry in India is best described as monopolistically competitive. Monopolistic competition is a market structure in which there are many firms selling differentiated products.
Law of demand
Law of diminishing returns
Law of diminishing marginal utility
Law of supply
✅ The correct answer is C.
The second glass of lemonade gives lesser satisfaction to a thirsty boy, this is a clear case of Law of diminishing marginal utility. The law of diminishing marginal utility describes a familiar and fundamental tendency of human behavior.
MR=MC
MC=AR
MR=MC=Price
AC=AR
✅ The correct answer is A.
MR=MC is the condition of equilibrium for the monopolist. The conditions for Equilibrium in Monopoly are the same as those under perfect competition. The marginal cost (MC) is equal to the marginal revenue (MR).
Money is a capital good
Human skills are a labour input
Entrepreneur is part of the labour input
Natural resources include human input
✅ The correct answer is B.
Human skills are a labour input is correct with respect to resources. The human or the interpersonal skills are the skills that present the managers’ ability to interact, work or relate effectively with people. These skills enable the managers to make use of human potential in the company and motivate the employees for better results.
Value in use
Value in exchange
Both of above
None of above
✅ The correct answer is A.
Total utility of a commodity is measured by value in use price of that commodity. The utility theory of value was the belief that price and value were solely based on how much “use” an individual received from a commodity.
Uniform
Different
Less
Zero
✅ The correct answer is B.
Price discrimination will be profitable only if the elasticity of demand in different markets into which the total market has been divided is different.
-0.5
0.5
-2
2
✅ The correct answer is B.
Income elasticity for the household when the income of a household rises by 10% and the demand for Rice rises by 5% is 0.5. Income Elasticity = (% change in quantity demanded) / (% change in income).
Price leadership model
Bertrand’s model
Collusive model
Edgeworth’s model
✅ The correct answer is C.
Collusive models is concerned with the maximization of joint profits. Firms join together and work for the joint profit maximization.
Public goods
Consumer goods
Capital goods
Agricultural goods
✅ The correct answer is C.
Lesser production of Capital goods would lead to lesser production in future. Production of both capital and consumer goods is essential for the economy. Capital goods (like plant and machinery) are needed for further production and future growth. Consumer goods are needed for present consumption.
Rationality
Consistency
Transitivity
All of the above
✅ The correct answer is D.
The IC curve approach assumes Rationality, Consistency and Transitivity.