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.

81. Quantity demanded is a

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Flow concept
Stock concept
Both ‘a’ and ‘b’
None of the above
✅ The correct answer is A.
Quantity demanded is a Flow concept. The quantity of the current production of a commodity which moves from a factory to the market is called flow. The aggregates of macroeconomics are of two kinds some are stocks, typically the stock of capital ‘k’ which is a timeless concept.

82. Mixed economy means an economy where

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Both agriculture and industry are equally promoted by the state
There is co-existence of public sector along with private sector
There is importance of small scale industries along with heavy industries
Economy is controlled by military as well as civilian rulers
✅ The correct answer is B.
Mixed economy means an economy where there is co-existence of public sector along with private sector. All modern economies are mixed where the means of production are shared between the private and public sectors. Also called dual economy.

83. Which form of market structure is characterised by interdependence in decision-making as between the different competing firms?

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Oligopoly
Perfect competition
Imperfect competition
None of the above
✅ The correct answer is A.
Oligopoly form of market structure is characterised by interdependence in decision-making as between the different competing firms. An oligopoly is a market form wherein a market or industry is dominated by a small number of large sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher prices for consumers. Oligopolies have their own market structure.

85. If there are implicit costs of production

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Economic profit will be equal to accounting profit
Economic profit will be less than accounting profit
Economic profits will be zero
Economic profit will be more than accounting profit.
✅ The correct answer is B.
If there are implicit costs of production Economic profit will be less than accounting profit. Economic profit is total revenue minus opportunity cost. Accounting profit is total revenue minus explicit cost. Opportunity costs are higher than explicit costs because opportunity costs also include implicit costs.

86. Ceteris Paribus means

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Other things remaining same
All variables are independent
Enable economists to simplify reality
That no other assumptions are made
✅ The correct answer is A.
Ceteris Paribus means other things remaining same. The Latin phrase ceteris paribus – literally, “holding other things constant” – is commonly translated as “all else being equal.” A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same.

88. In the case of an inferior good, the income elasticity of demand is

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Positive
Zero
Negative
Infinite
✅ The correct answer is C.
In the case of an inferior good, the income elasticity of demand is Negative. A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes.

89. Which of the following markets comes closest to perfect market?

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Wheat market
Cigarette market
Cold drinks market
Stock market
✅ The correct answer is A.
Wheat market comes closest to perfect market. A perfectly competitive firm is called a price taker, because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. When a wheat grower wants to know what the going price of wheat is, he or she has to go to the computer or listen to the radio to check.