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.

251. Which of the following is example of external economies of scale?

by
Discount on purchases of raw materials
Technical progress leads to development of machine at low price
Hiring of specialized staff due to increase in scale of production
A firm starts producing by-products
✅ The correct answer is B.
Technical progress leads to development of machine at low price is example of external economies of scale.

252. If the income elasticity is greater than one, the commodity is

by
Necessity item
Luxury item
Inferior good
None
✅ The correct answer is B.
If the income elasticity is greater than one, the commodity is Luxury item. Luxury goods represent normal goods associated with income elasticities of demand greater than one. Consumers will buy proportionately more of a particular good compared to a percentage change in their income.

257. In the long run, any firm will eventually leave the industry if

by
Price does not at least cover average total cost
Price does not equal marginal cost
Economies of sale are being reaped
Price is greater than long run average cost
✅ The correct answer is A.
In the long run, any firm will eventually leave the industry if Price does not at least cover average total cost. Exit is the long-run process of firms reducing production and shutting down in response to industry losses.

258. Which is not a central problem of an economy?

by
What to produce
How to produce
How to maximize private profit
For whom to produce
✅ The correct answer is C.
How to maximize private profit is not a central problem of an economy. Some of the central problems that are faced by every economy of a country are as follows: Production, distribution and disposition of goods and services are the basic economic activities of life. In the course of these activities, every society has to face scarcity of resources.