All Free Economics MCQs with Answers

• A. theories
• B. concepts
• C. scientific laws
• D. generalization

Explanation: Social sciences develop concepts, theories, and generalizations, but human behavior is influenced by context and is less predictable than…

• A. suicide
• B. mental illness
• C. sex
• D. all of the above

Explanation: Durkheim’s classic study Suicide showed how an apparently personal act could be explained through social forces and patterns.

• A. its primary concern is to record events of the past
• B. historians do not use computers
• C. it does not study people
• D. it is not based on evidence

Explanation: History mainly reconstructs and records past events, whereas social sciences generally analyse social relationships and institutions…

• A. production of goods and services
• B. consumption of goods and services
• C. distribution of goods and services
• D. all of the above

Explanation: Economics examines how scarce resources are used in production, how goods and services are distributed, and how they are consumed.

• A. eliminated social classes
• B. made all social classes equal
• C. created a class of industrial workers
• D. none of the above

Explanation: Industrialisation produced factories and a new wage-earning working class, commonly called the industrial proletariat.

• A. selecting and defining a topic
• B. verifying a hypothesis
• C. analyzing data
• D. replicating an experiment

Explanation: An investigation begins by selecting a research topic and defining its scope and question.

• A. controlled conditions
• B. precision
• C. organization of the data
• D. all of the above

Explanation: Reliable scientific observation requires controlled conditions where possible, precise measurement and systematic organisation of…

• A. change the nature of the physical environment
• B. adapt to the environment
• C. take over the environment
• D. regulate the environment

Explanation: Manipulating social arrangements, institutions and relationships helps people respond to conditions and fit their conduct to the…

• A. a case studies
• B. participant observation
• C. sample survey
• D. laboratory experiment

Explanation: A case study is an intensive investigation of one person, group, institution or other social unit.

• A. rules for behavior
• B. social philosophy
• C. systematic and methodical study
• D. study of individual behavior

Explanation: Social sciences are defined by the systematic and methodical study of society, social relationships and human behaviour.

• A. an implicit or social contract
• B. a relative-wage contract
• C. employment at will
• D. an explicit contract

Explanation: An implicit or social contract is an unspoken understanding that workers expect wages not to be reduced arbitrarily, even when no written…

• A. cope with unforeseen changes
• B. maximize growth.
• C. minimize conflict within the firm
• D. both options one and three

Explanation: Organizational slack gives a firm a cushion to absorb unforeseen changes and reduces internal conflict by allowing different groups some…

• A. To increase competition
• B. To reduce uncertainty
• C. To achieve faster growth
• D. To achieve economies of scale

Explanation: Firms generally merge to reduce uncertainty, grow faster, or obtain economies of scale, while increasing competition is not a normal…

• A. Owners
• B. Customers
• C. Employees
• D. None of the above

Explanation: Owners, customers, and employees all have an interest in the company's decisions and performance, so each is a stakeholder.

• A. horizontal
• B. vertical
• C. homogeneous
• D. conglomerate

Explanation: A merger between two clothing firms combines businesses operating at the same stage and in the same industry, making it horizontal.

• A. horizontal
• B. vertical
• C. conglomerate
• D. homogeneous

Explanation: A fiber producer supplies an input to a clothing firm, so their merger combines different stages of the same production chain.

• A. contestable
• B. perfectly competitive
• C. oligopolistic
• D. export-oriented

Explanation: Sales maximization is associated with managerial firms, especially oligopolies, where firms compete through advertising, product…

• A. managers need to be paid enough to stop them leaving the company
• B. objectives such as profit are not maximized
• C. short-run profits are maximized
• D. long-run profits are maximized

Explanation: Satisficing means choosing an acceptable or satisfactory outcome rather than pushing an objective such as profit to its maximum possible…

• A. Like other firms in their industry.
• B. growth maximisers.
• C. leading firms in their industry
• D. unlike other firms in their industry

Explanation: Satisficing firms seek an acceptable level of performance rather than the theoretical optimum, so their behaviour is generally similar to…

• A. Williamson's
• B. classical economic
• C. Marxist
• D. monetarist

Explanation: Galbraith’s technostructure is the managerial group that controls large corporations, an idea consistent with Williamson’s managerial…