MCQ on Economics

Economics MCQ Questions and Answers Pdf

What is economics ?

In general terms, economics is a social science that studies human behavior patterns; It is a science that studies human behavior as a relationship between the end and scarce resources that have alternative uses; The basic function of economics is to study how individuals, homes, organizations and nations use their limited resources to maximize profits.

Here Below we provides a list of MCQ on Economics outlined by experts who suggest the most important MCQ for various competitive exams. The below MCQ takes you directly to the corresponding topic where the detailed article along with MCQs is provided for a smooth, effortless searching experience. Before going ahead to solved MCQ Questions on Economics with Answers papers or taking up mock tests, make sure you cover the basic concepts of economics and solve some sample questions before appearing in Exam. Multiple Choice Questions on Economics with Answers Pdf listed below range from the basic to the most advanced Questions, thereby having you covered. Have a look at the list of MCQ below:


MCQ Questions on Economics with Answers Pdf

1. Economics is derived from the Greek word oikonomikus which means_________

(a) Business Management

(b) Economics

(c) House Management

(d) Wealth Management

Answer: C

Read : MCQ on Business Economics 

2. Who is the father of Economics?

(a) Alfred Marshall

(b) Adam Smith

(c) Lionel Robbins

(d) Samuelson

Answer: B


3. Economics is a ________.

(a) Positive science

(b) Normative science

(c) None

(d) Both

Answer: D


4. The relationship between price and demand is ____________.

(a) Direct

(b) Positive

(c) Negative

(d) None of these

Answer: C


5. 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


6. The capital that is consumed by an economy or a firm in the production process is known as___________

(a) Capital loss

(b) Production cost

(c) Dead-weight loss

(d) Depreciation

Answer: D


7. 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


8. Which among the following statement is INCORRECT?

(a) On a linear demand curve, all the five forms of elasticity can be depicted

(b) If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.

(c) If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.

(d) The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.

Answer: B


9. Law of demand shows ___________ relationship between price and quantity demanded.

(a) Positive

(b) Negative

(c) Direct

(d) None of the above

Answer: B


10. Sales Maximization Concept is given by_____________

(a) Adam Smith

(b) Samuelson

(c) Marshall

(d) Baumol

Answer: D


11. Extension and contraction of demand for a good occurs as a result of______________

(a) Change in the quality of good

(b) Change in the price of a good

(c) Availability of cheaper substitutes

(d) Increases in Income

Answer: B


12. 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


13. The supply of a good refers to__________

(a) Stock available for sale

(b) Total stock in the warehouse

(c) Actual production of the good

(d) Quantity of the good offered for sale at a particular price per unit of time

Answer: D


14. The goal of a pure market economy is to meet the desire of______.

(a) Consumers

(b) Companies

(c) Workers

(d) The government

Answer: A


15. The cost of one thing in terms of the alternative given up is called___________

(a) Real cost

(b) Production cost

(c) Physical cost

(d) Opportunity cost

Answer: D


16. An exceptional demand curve is one that moves__________

(a) Upward to the right

(b) Downward to the right

(c) Horizontally

(d) Upward to the left.

Answer: A


17. In the case of a Giffen good, a fall in its price tends to____________

(a) Demand remain constant

(b) Demand increases

(c) Reduce the demand

(d) Abnormal change in demand.

Answer: C


18. What would be the value of elasticity of demand, if the demand for the good is perfectly inelastic?

(a) 0

(b) 1

(c) Infinity

(d) Less than Zero

Answer: A


19. Who has given the concept of consumer surplus_________

(a) Marshall

(b) Robbins

(c) Pigou

(d) None of these

Answer: A


20. When price floor is set above equilibrium price it will result in?

(a) Shortage

(b) Surpluses

(c) Equilibrium

(d) None of the above

Answer: B


21. The economist's objections to monopoly rest on which of the following grounds?

(a) There is a transfer of income from consumers to the monopolist

(b) There is welfare loss as resources tend to be misallocated under monopoly

(c) Both A and B are incorrect

(d) Both A and B are correct

Answer: D


22. What is Gross Domestic 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 monetary value of all finished goods and services made within a country during a specific period.

Answer: D


23. Under conditions of perfect competition in the product market___________

(a) MRP = VMP

(b) MRP> VMP

(c) VMP> MRP

(d) None of the above

Answer: A


24. Who is assumed as father of Economics?

(a) Adam smith

(b) Robinson

(c) Marshall

(d) George Bernard

Answer: A


25. When supply of a commodity decreases on a fall in its price, its is called____________

(a) Expansion of supply

(b) Increase in supply

(c) Contraction of supply

(d) Decrease in supply.

Answer: C


26. Which utility approach suggests that utility can be measured and quantified?

(a) Ordinal

(b) Cardinal

(c) Both a & b

(d) Diminishing marginal utility.

Answer: B


27. ---------------------- of a commodity is the additional utility derived by a consumer, by consuming one more unit of that commodity.

(a) Marginal utility

(b) Total utility

(c) Average utility

(d) Maximum utility

Answer: A


28. At what point does total utility starts diminishing?

(a) When marginal utility is positive

(b) When it remains constant

(c) When marginal utility is increasing

(d) When marginal utility is negative.

Answer: D


29. 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


30. Which statistical measure helps in measuring the purchasing power of money?

(a) Arithmetic average

(b) Index numbers

(c) Harmonic mean

(d) Time series

Answer: B


31. 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


32. Fisher's ideal index number is_____________

(a) Arithmetic mean of Laspeyre's and Paasche's index

(b) Harmonic mean of Laspeyre's and Paasche's index

(c) Geometric mean of Laspeyre's and Paasche's index

(d) None of the above

Answer: C


33. Which among the following statement is INCORRECT?

(a) Welfare economics is based on value judgements

(b) Welfare economics is also called 'economics with a heart'

(c) Welfare economics focuses on questions about equity as well as efficiency

(d) The founder of Welfare economics was Alfred Marshall

Answer: D


34. Consumer’s surplus is also known as____________

(a) Indifference surplus

(b) Elasticity of supply

(c) Buyer’s surplus

(d) Indifference surplus.

Answer: C


35. According to Marshall, the basis of consumer surplus is__________

(a) Law of equi-marginal utility.

(b) Law of proportions

(c) Law of diminishing marginal utility

(d) All of the above

Answer: C


36. Demand is a function of __________

(a) Income

(b) Advertisement

(c) Consumers

(d) Price

Answer: D


 37. _________ is the total value of all final goods and services produced by the country in certain year.

(a) National Income

(b) Personal income

(c) Corporate income

(d) Foreign income

Answer: A


38. Relationship between price and supply is________.

(a) Positive

(b) Negative

(c) Direct

(d) None of the above

Answer: A



39. Under ______, price is determined by the interaction of total demand and total supply in the market.

(a) Perfect competition

(b) Monopoly

(c) Imperfect competition

(d) All of the above

Answer: A


40. Under perfect competition, price is determined by the interaction of total demand and ________.

(a) Total supply

(b) Total cost

(c) Total utility

(d) Total production

Answer: A


41. Identify the natural product from the list of items given below:

(a) Textile

(b) Wheat flour

(c) Cotton

(d) Tomtao sauce

Answer: C


42. GDP stands for Gross Domestic Product. What does it show? Pick up the correct statement given below:

(a) It shows how big is the economy of a country in a given year in terms of its total output.

(b) It shows what the total product of a country in a given year without counting the country’s total resources.

(c) It shows the number of people involved in production in a particular year.

(d) It shows the total value of trade trans-actions of a country in a particular year.

Answer: A


43. How do big private companies contribute in the development of a nation?

(a) By increasing the demands for their products through advertisements.

(b) By increasing their profits.

(c) By increasing productivity of the country in the manufacturing of industrial goods.

(d) By providing private hospital facilities for the rich.

Answer: C


44. The term used for rapid integration or interconnection between countries is known as____________

(a) Privatization

(b) Globalization

(c) Liberalization

(d) Socialization

Answer: B


45. Perfectly elastic demand curve is a _________ curve.

(a) U shaped

(b) L shaped

(c) Horizontal

(d) Vertical

Answer: C


46. If demand is perfectly elastic then e is ___________

(a) E

(b) e <1

(c) e> 1

(d) e = 0

Answer: A


47. Relatively inelastic demand is _________

(a) e p = 0

(b) e p> 1

(c) e p <1

(d) e p = 1

Answer: B


48. Unitary inelastic demand is _________

(a) e p = 0

(b) e p> 1

(c) e p <1

(d) e p = 1

Answer: D