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.

151. As output increases

by
MC curve initially falls and then rises
MC initially rises and then falls
MC continuously rises
None of the above
✅ The correct answer is A.
As output increases when MC curve initially falls and then rises. The Marginal Cost curve is U shaped because initially when a firm increases its output, total costs, as well as variable costs, start to increase at a diminishing rate. Then as output rises, the marginal cost increases.

152. Identify the work of Irving Fisher

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A Treatese on Money
Policy against Inflation
The Making of Index numbers
Monetary Theory
✅ The correct answer is C.
The Making of Index numbers is the work of Irving Fisher. Index numbers played an important role in his monetary theory, and his book The Making of Index Numbers has remained influential down to the present day. Fisher’s main intellectual rival was the Swedish economist Knut Wicksell.

154. In long-run, all firms in monopolistic competition

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Earn supernormal profits
Earn normal profits
Incur losses
May earn normal profit, super normal profit or incur losses
✅ The correct answer is B.
In long-run, all firms in monopolistic competition earn normal profits. In the long‐run, the competition brought about by the entry of new firms will cause each firm in a monopolistically competitive market to earn normal profits, just like a perfectly competitive firm.

156. Every factor of production gets rewarded equal to its

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Cost
Marginal product
Price
Increasing return
✅ The correct answer is B.
Every factor of production gets rewarded equal to its Marginal product. No single firm can influence the market price of a factor of production. Therefore, in order to get the equilibrium position, a firm will employ labourers up to a point where their respective marginal revenue productivity is equal to their wage rate.

158. Normal profit is

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Part of total cost
Part of economic profit
Total revenue minus total cost
Total revenue minus implicit cost
✅ The correct answer is A.
Normal profit is Part of total cost. Normal profit is an economic term that describes when a company’s total revenues are equal to its total costs in a perfectly competitive market.

160. The term ‘marginal’ in economics means

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Unimportant
Additional
The minimum unit
Just barely passing
✅ The correct answer is B.
The term ‘marginal’ in economics means Additional. In economics, the term marginal is used to indicate the change in some benefit or cost. when an additional unit is produced. For instance, the marginal revenue is the change in. total revenue when an additional unit is produced.