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.

71. Under law of demand

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Price of commodity is an independent variable
Quantity demanded is a dependent variable
Reciprocal relationship is found between price and quantity demanded
All of the above
✅ The correct answer is D.
Under law of demand Price of commodity is an independent variable, Quantity demanded is a dependent variable and Reciprocal relationship is found between price and quantity demanded.

73. Which statement relates to macroeconomics?

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Oil prices are rising in Pakistan
Profit rate is high on textile industry
The firms try to make huge profits
The government has failed to control inflation
✅ The correct answer is D.
The government has failed to control inflation relates to macroeconomics. Governments can use wage and price controls to fight inflation, but that can cause recession and job losses. Governments can also employ a contradictory monetary policy to fight inflation by reducing the money supply within an economy via decreased bond prices and increased interest rates.

75. Which one is not a assumption of the theory of demand based on analysis of indifference curves?

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Given scale of preferences as between different combinations of two goods
Diminishing marginal rate of substitution
Constant marginal utility of money
Consumers would always prefer more of a particular good to less of it, other things remaining the same
✅ The correct answer is C.
Constant marginal utility of money is not a assumption of the theory of demand based on analysis of indifference curves. An indifference curve is a graph that shows a combination of two goods that give a consumer equal satisfaction and utility, thereby making the consumer indifferent.

77. In economics, what a consumer is ready to pay minus what he actually pays, is termed as

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Consumer’s equilibrium
Consumer’s surplus
Consumer’s expenditure
None of the above
✅ The correct answer is B.
In economics, what a consumer is ready to pay minus what he actually pays, is termed as Consumer’s surplus. Consumer surplus is defined as the difference between the consumers’ willingness to pay for a commodity and the actual price paid by them, or the equilibrium price.

80. Larger production of ___ goods would lead to higher production in future

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Consumer goods
Capital goods
Agricultural goods
Public goods
✅ The correct answer is B.
Larger production of Capital goods goods would lead to higher production in future. If investment in capital good increases ,in turn it further increases the production of consumer goods in the long run. So, if an economy is investing more in capital goods, it shows signs of growth in near future, an increase in GDP.