Economics
Economics MCQs with Answers and Explanations
Economics MCQs with answers and detailed explanations for CSS, PMS, lecturer and GAT tests. Micro, macro and Pakistan economy questions fully explained. Take a scored quiz instead →
Isoquants in production theory represent combinations of inputs that produce:
AEqual output level
BMaximum marginal revenue
CEqual total cost
DZero variable cost
The law of demand states that, ceteris paribus:
AAs price increases, demand increases
BAs price decreases, quantity demanded increases
CAs income increases, demand decreases
DAs price decreases, supply increases
If two goods are complements, an increase in the price of one good will lead to:
AA decrease in demand for the other good
BAn increase in demand for the other good
CNo change in demand for either good
DAn increase in quantity supplied of both goods
What does price elasticity of demand measure?
AThe responsiveness of quantity demanded to a change in price
BThe total revenue earned by firms at equilibrium
CThe shift of the demand curve due to income changes
DThe effect of supply shifts on market price
When total utility is at its maximum, marginal utility is equal to:
AInfinity
BZero
CNegative one
DOne
An indifference curve represents all combinations of two goods that yield the consumer:
AMaximum profit
BEqual utility or satisfaction
CEqual total expenditure
DMinimum marginal cost
In a perfectly competitive market in the long run, firms earn:
ASupernormal profits
BAbnormal profits
CZero economic profit (normal profit)
DNegative accounting profit
A market situation with a single buyer and many sellers is known as a:
AMonopsony
BOligopoly
CMonopoly
DDuopoly
The marginal cost curve intersects the average total cost (ATC) curve at:
AThe minimum point of ATC
BThe point where profit is maximized
CThe vertical axis origin
DThe maximum point of ATC
What is Giffen’s paradox in microeconomics?
ADemand increases as income increases
BQuantity demanded increases as price increases for an inferior good
CSupply decreases when price rises
DElasticity of demand equals elasticity of supply