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.

111. Normal goods have

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Positive income elasticity
Negative income elasticity
Fluctuating income elasticity
Zero income elasticity
✅ The correct answer is A.
Normal goods have Positive income elasticity. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand. If income elasticity of demand of a commodity is less than 1, it is a necessity good. If the elasticity of demand is greater than 1, it is a luxury good or a superior good.

112. Discriminating monopoly implies that the monopolist charges different prices for its commodity

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From different groups of consumers
For different uses
At different places
Any of the above
✅ The correct answer is D.
Discriminating monopoly implies that the monopolist charges different prices for its commodity From different groups of consumers, for different uses and at different places.

114. The consumer is in equilibrium at a point where the budget line

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Is above an indifference curve
Is below an indifference curve
Is tangent to an indifference curve
Cuts an indifference curve
✅ The correct answer is C.
The consumer is in equilibrium at a point where the budget line is tangent to an indifference curve. It means that marginal substitution rate between X and Y (MRSXY) should be diminishing.

116. If the demand for a commodity is inelastic, an increase in its pice will cause the total expenditure of the consumers of the commodity to

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Remain the same
Increase
Decrease
Any of the above
✅ The correct answer is B.
If the demand for a commodity is inelastic, an increase in its pice will cause the total expenditure of the consumers of the commodity to Increase. When demand is inelastic, a fall in the price of a commodity leads to fall in total expenditure on it. On the other hand, when price increases, total expenditure also increases.

117. Utility means

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Power to satisfy a want
Usefulness
Willingness of a person
Harmfulness
✅ The correct answer is A.
Utility means power to satisfy a want. It is a quality possessed by a commodity or service to satisfy human wants. Utility can also be defined as value-in-use of a commodity because the satisfaction which we get from the consumption of a commodity is its value-in-use.

119. Normal profit is called normal because

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It is neither very high nor very low
It is minimum acceptable to the producer
It is minimum which buyer wants to pay
It is the maximum allowed by government
✅ The correct answer is B.
Normal profit is called normal because It is minimum acceptable to the producer. Normal profit is a situation where a firm makes sufficient revenue to cover its total costs and remain competitive in an industry.