Economics is a study of the usage of resources and how we can make those resources valuable under distinct captivity. It involves an intense study of production, distribution, and consumption of goods and services.
Economics is not just about money; it is also about making correct choices, balancing them with the money, and improving an individual’s overall well-being. Some important MCQs on economics are given to analyse your understanding of the topic. The answers are also given for your reference.
Economics MCQs
Q1. What do you mean by the supply of goods?
- a) Stock available for sale
- b) Total stock in the warehouse
- c) The actual production of the goods
- d) Quantity of the goods offered for sale at a particular price per unit of time
Answer:- d
Q2. What do you mean by ‘under conditions of a perfect competition in the product market’?
- a) MRP = VMP
- b) MRP > VMP
- c) VMP > MRP
- d) None of the above
Answer:- a
Q3. Which of the following is the relation that the law of demand defines?
- a) Income and price of a commodity
- b) Price and quantity of a commodity
- c) Income and quantity demanded
- d) Quantity demanded and quantity supplied
Answer:- b
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Q4. What do you mean by a mixed economy?
- a) Modern and traditional industries
- b) Public and private sectors
- c) Foreign and domestic investments
- d) Commercial and subsistence farming
Answer:- b
Q5. What do you mean by the demand of a commodity?
- a) Desire for the commodity
- b) Need for the commodity
- c) Quantity demanded of that commodity
- d) Quantity of the commodity demanded at a certain price during any particular period of time
Answer:- d
Q6. Starting from the time of independence, why did India follow a planned economy?
1.India followed a five-year plan and required an outlook.
2.Directive Principles of Indian Constitution indicated the planned vision of India.
3.There was no indication whatsoever from the five year plans regarding how much of each and every good and service is to be produced.
Choose the correct statements from the given options
- a) Only 2
- b) 2 and 3
- c) 1 and 3
- d) All of the above
Answer:- b
Q7. What do you mean by Gross National Product?
- a) The total value of goods and services produced in the country
- b) The total value of all the transactions in the country
- c) The depreciation in the total value of goods and services produced in the country
- d) The total value of goods and services produced in the country and the net factor income from abroad
Answer:- d
Q8. Which of the following is the reason for the decline in the child sex ratio in India?
- a) Low fertility rate.
- b) Female foeticide
- c) Incentives for a boy child from the government
- d) None of the above
Answer:- b
Q9. What factors are taken into consideration while revising the poverty line periodically?
- a) By conducting a survey every five years
- b) Survey carried out by National Sample Survey Organisation
- c) Both a and b
- d) None of the above
Answer:- c
Q10. In India, which banks/institutions have the highest share in the disbursement of credit to agriculture and allied activities?
- a) Cooperative banks
- b) Regional Rural Banks
- c) Commercial banks
- d) Microfinance institutions
Answer:- c
Q11. Which of the following is/are linked with the financial sector of India and controlled by the Reserve Bank of India (RBI)?
- a) Commercial bank
- b) Money lenders
- c) Stock exchange operations
- d) All of the above
Answer:- c
Q12. What does price flooring mean?
- a) Shortage
- b) Surpluses
- c) Equilibrium
- d) None of the above
Answer:- b
Q13. What is Gross National Product?
- a) The total value of goods and services manufactured in the country
- b) The total value of all the transactions in the country
- c) The reduction in the total value of goods and services produced in the country
- d) The total worth of goods and services generated in the country and the net factor income from abroad.
Answer:- d
Q14. Why is the unemployment rate low in India statistically?
- Unemployment is calculated only from the age group of 15 years to 59 years.
- Unemployment survives only when an individual cannot find a job.
- People are not interested in working outside the domestic area.
Choose the correct option.
- a) Only 3
- b) 2 and 3
- c) Only 2
- d) All of the above
Answer:- c
Q15. What does the bowed-out shape of the production possibilities curve illustrate?
- a) Law of increasing marginal cost
- b) The production is inefficient
- c) The production is unattainable
- d) The demand is relatively elastic
Answer:- a
Q16. What is the main economic problem faced by the society?
- a) Unemployment
- b) Inequality
- c) Poverty
- d) Scarcity
Answer:- d
Q17. What does “Capitalism” refer to?
- a) The use of market
- b) Government ownership of capital
- c) Private ownership of capital goods
- d) Private ownership of homes and& cars
Answer:- c
Q18. The goal of a pure market economy is to meet the desire of ______ .
- a) Consumers
- b) Companies
- c) Workers
- d) The government
Answer:- a
Q19. What does the law of demand mean?
- a) As the quantity demanded rises, the price rises.
- b) As the price rises, the quantity demanded rises.
- c) As the price rises, the quantity demanded falls.
- d) As the supply rises, the demand rises.
Answer:- c
Q20. Which of the following is an example of an agricultural price support program?
- a) A price ceiling
- b) A price floor
- c) Equilibrium pricing
- d) None of the above
Answer:- b
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