All Free Economics MCQs with Answers

• A. cash goods
• B. consumer items
• C. consumer goods
• D. cash items

Explanation: Consumer goods directly satisfy human wants through use or consumption, such as food, clothing, and household appliances.

• A. Monopolized shop
• B. Monopolized area
• C. Closed shop
• D. Monopolized market

Explanation: A closed shop is a workplace in which employees must belong to the recognized trade union.

• A. Capital assets
• B. Running capital
• C. Capital goods
• D. Hard capital

Explanation: Capital goods are producer goods such as machinery, tools, and equipment used to produce other commodities.

• A. Authorized amount of stock for issue by corporation
• B. The total stated or par value of the permanently invested capital of corporation
• C. Both of them
• D. None of them

Explanation: Capital stock may refer to the corporation’s authorized share capital and, in accounting usage, the total par value of its permanently…

• A. Net assets
• B. Solid asset
• C. Holdings
• D. Capital

Explanation: Capital is the stock of goods, assets and money that can be used to generate future income.

• A. Break even
• B. Breakeven point
• C. Both of them
• D. None of them

Explanation: A firm breaks even when its total return equals its total investment or cost, and the specific level at which this occurs is the…

• A. Bonus
• B. Overtime
• C. Prize
• D. Gift

Explanation: A bonus is an additional payment made by an employer beyond normal wages, often awarded for performance or as a gratuity.

• A. Free exchange
• B. Liberal Exchange
• C. Barter
• D. Bilateral Trade

Explanation: Barter is the direct exchange of goods or services for other goods or services without using money.

• A. Bankruptcy
• B. Default
• C. Total loss
• D. Crash

Explanation: Bankruptcy is the legal process used when a debtor cannot meet obligations to creditors in full.

• A. A precise list or enumeration of financial transactions
• B. Money deposited for checking savings or breakage use
• C. A customer having business or credit relationship with a firm
• D. All of these

Explanation: An account may mean a financial transaction record, money held for banking use, or a customer relationship maintained by a business.

• A. technology
• B. input costs
• C. government regulation
• D. all of the above

Explanation: Technology, input prices, and government regulations can all shift the supply curve by changing producers’ costs or productive capacity.

• A. quantity demanded equals quantity supplied
• B. Excess demand and excess supply are zero
• C. The market is cleared by the equilibrium price
• D. All of the above

Explanation: At equilibrium, the quantity buyers want equals the quantity sellers offer, so neither excess demand nor excess supply remains.

• A. a nonlinear relationship
• B. a positive linear relationship
• C. a scatter diagrams
• D. a negative linear relationship

Explanation: When higher values on the horizontal axis correspond to lower values on the vertical axis, the variables move in opposite directions.

• A. Production technology
• B. Consumption decisions
• C. how society decides what how and for whom to produce
• D. the best way to run society

Explanation: Economics studies how scarce resources are allocated among unlimited wants, including what to produce, how to produce it, and for whom.

• A. provides no information because prices in a market system are managed by planning boards.
• B. tells consumers to buy less pork
• C. tells producers to produce more beef.
• D. tells consumers to buy more beef.

Explanation: A higher beef price signals stronger returns to beef producers, encouraging them to supply more beef.

• A. With a large enough computer, central planners could guide production more efficiently than markets.
• B. Market participants act as if guided by an invisible hand to produce outcomes that maximize social welfare
• C. The strength of a market system is that it tends to distribute resources evenly across consumers.
• D. Taxes help prices communicate costs and benefits to producers and consumers.

Explanation: The invisible-hand principle says that self-interested market decisions can coordinate resources toward greater overall welfare when…

• A. inoculations against disease
• B. cigarettes
• C. food
• D. education
• E. stereo equipment

Explanation: Food generally provides mainly private benefits, while inoculations, education, cigarettes, and stereo equipment can create significant…

• A. the action is ethical
• B. The action produces marginal costs that exceed marginal benefits.
• C. The action produces marginal benefits that exceed marginal costs.
• D. The action makes money for the person.

Explanation: A rational person undertakes an action when its marginal benefit is greater than its marginal cost, because the additional gain then…

• A. economical
• B. unlimited
• C. Efficient
• D. Scarce

Explanation: Trade-offs arise because human wants exceed the resources available to satisfy them.

• A. The richest 10 per cent of the population has had a bigger percentage increase in incomes over the past 10 years than the poorest 10 percent
• B. Inflation is rising
• C. The proportion of people's income paid in taxes is higher under this government than under the previous one.
• D. Inequality in the distribution of income is a more serious problem than unemployment

Explanation: Option d expresses a value judgment about which problem is more serious, so it cannot be settled by facts alone.