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.

272. Quality of a commodity that satisfies some human want or need is called

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Service
Demand
Utility
Efficiency
✅ The correct answer is C.
Quality of a commodity that satisfies some human want or need is called Utility. Within economics the concept of utility is used to model worth or value, but its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or satisfaction within the theory of utilitarianism by moral philosophers such as Jeremy Bentham and John Stuart Mill.

275. An isoquant slopes

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Downward to the left
Downward to the right
Upward to the right
Upward to the left
✅ The correct answer is B.
An isoquant slopes downward to the right. This implies that the Isoquant is a negatively sloped curve. This is because when the quantify of factor K (capital) is increased, the quantity of L (labor) must be reduced so as to keep the same level of output.

276. Price discrimination is not possible in case of

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Perfect competition
Monopoly
Monopolistic competition
Oligopoly
✅ The correct answer is A.
Price discrimination is not possible in case of Perfect competition. Price discrimination is not possible under perfect competition, even if the two markets could be kept separate. Since market demand in each market is perfectly elastic, every seller would try to sell in that market in which could get the highest price. Competition would make the price equal in both the markets. However, price discrimination is possible and profitable only when markets are imperfect.

277. A monopolist is able to maximize his profits when

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His output is maximum
He charges high price
His average cost is minimum
His marginal cost is equal to marginal revenue
✅ The correct answer is D.
A monopolist is able to maximize his profits when his marginal cost is equal to marginal revenue. The profit-maximizing choice for the monopoly will be to produce at the quantity where marginal revenue is equal to marginal cost: that is, MR = MC.

279. The kinked demand curve model of oligopoly assumes that

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Response to a price increase is less than the response to a price decrease
Response to a price increase is more than the response to a price decrease
Elassticity of demand is constant regardless of whether price increases or decreases
Elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases
✅ The correct answer is A.
The kinked demand curve model of oligopoly assumes that response to a price increase is less than the response to a price decrease. In an oligopolistic market, the kinked demand curve hypothesis states that the firm faces a demand curve with a kink at the prevailing price level. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.

280. With which of the theories of wages, is the name of John Stuart Mill associated?

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Marginal productivity theory of wages
Wages-fund theory
Subsistence theory of wages
Iron aw of wages
✅ The correct answer is B.
With Wages-fund theory, the name of John Stuart Mill associated. Mill said that wages mainly depend upon demand for and supply of labour or the proportion between population and capital available.