Free Microeconomics MCQs with Answers

• A. market forces
• B. key economic indicators
• C. thesis and antithesis
• D. causes of inflation

Explanation: Demand and supply are market forces because buyers' willingness to purchase and sellers' willingness to produce interact to determine…

• A. all participants get some satisfaction
• B. scarce resources are put into goods that are in demand
• C. economic output is distributed to those who can pay the price
• D. all of the above

Explanation: A market economy directs scarce resources toward goods consumers demand and distributes output mainly according to ability and willingness…

• A. Foreman
• B. Union official
• C. Stock holder
• D. CEO

Explanation: A foreman occupies an intermediate position between workers and higher management, so the role is difficult to classify strictly as either…

• A. partnership
• B. proprietorship
• C. trust
• D. corporation

Explanation: A corporation is a separate legal entity owned by shareholders, who may be numerous, absent from daily operations and protected by limited…

• A. everything needed for the production of goods and services including human energy
• B. everything found in the ground
• C. everything that is made by people
• D. none of the above

Explanation: Economic resources are the inputs used to produce goods and services, including human effort, natural materials, machinery and…

• A. must be combined in the production of goods and service
• B. must be used separately to produce goods and service
• C. have no function in the production of goods and service
• D. create a balance between humans and their environment

Explanation: Land, labour, capital and entrepreneurship are the four factors of production, and production normally requires their coordinated…

• A. Antitrust laws
• B. Increasing white-collar membership
• C. Expansion of the manufacturing sector
• D. Loss of membership

Explanation: Trade unions may face declining membership as industries shrink, employment patterns change and unionisation becomes less common in some…

• A. closed
• B. multinational
• C. restricted
• D. monopolistic

Explanation: A multinational corporation operates across national borders through branches, subsidiaries or other business activities.

• A. supplies the real needs of people
• B. creates artificial demands
• C. helps the wealthy get richer
• D. none of the above

Explanation: Advertising can influence preferences and persuade consumers to want products beyond their basic needs, creating artificial or induced…

• A. corporation
• B. government
• C. commune
• D. union

Explanation: Industrial capitalism required large-scale finance, production and ownership, making the corporation the key economic unit.

• A. hard work and thrift
• B. predestination
• C. turning the other cheek
• D. buying indulgences

Explanation: According to the Protestant Ethic thesis, capitalism was encouraged by values such as disciplined hard work, saving and thrift.

• A. is quite strong
• B. is diluted by private and state monopolies
• C. does not exist
• D. has been replaced by planning

Explanation: Modern market economies contain competition, but it is often weakened by private monopolies, oligopolies and state-owned monopolies.

• A. inducement
• B. direction
• C. command
• D. tradition

Explanation: A market system coordinates production through inducements such as prices, profits and consumer demand.

• A. have lack of control
• B. have no sense of accomplishment
• C. are an anonymous group
• D. all of the above

Explanation: Highly specialized work can reduce workers’ control, weaken their sense of accomplishment and make them feel like anonymous parts of a…

• A. using existing technology
• B. obtaining the highest output in the least amount of time
• C. ignoring the time factor
• D. making do with as few workers as possible

Explanation: Economic efficiency means producing the greatest possible output from given resources, often expressed as obtaining maximum output with…

• A. Tradition
• B. Command
• C. Free Market
• D. BOTH market and command

Explanation: Western industrial economies generally combine market mechanisms with government direction, regulation and public provision.

• A. how to get rid of it
• B. what to produce how produce it and for whom to produce it
• C. there is no problem it is divided equally
• D. how to keep it away from enemies

Explanation: Even when a society has a surplus, it must decide what to produce, how to produce it and for whom to distribute it.

• A. ability to accumulate vast amounts of capital in a short time
• B. capacity for protracted periods of employment
• C. ability to profit from the labor of its employees
• D. necessity to exhibit the latest technology

Explanation: A corporation can pool the savings of many investors and raise very large amounts of capital, often more quickly and on a larger scale…

• A. restricted guarded and private
• B. esthetic visible tangible
• C. communal private public
• D. ambiguous hermetic contraceptive

Explanation: The standard broad forms of property ownership are communal, private, and public.

• A. raw materials
• B. impetus to upward mobility
• C. factors of production
• D. external devices

Explanation: Land, labour, capital, and entrepreneurship are the four traditional factors of production because they provide the resources and…