Free Microeconomics MCQs with Answers
1,742 Microeconomics MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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1,742 questions · page 76 of 88
- A. Changes in price caused by changes in demand
- B. The rate of change of sales
- C. The responsiveness of demand to price changes
- D. The value of sales at a given price
Explanation: Price elasticity of demand measures how strongly the quantity demanded responds to a change in price.
Correct answer: The responsiveness of demand to price changes- A. Increasing government spending
- B. Increasing public ownership of firms
- C. Increasing the role of markets
- D. Removing the profit motive
Explanation: Central planning allocates resources through government decisions, whereas markets coordinate production through prices and private…
Correct answer: Increasing the role of markets- A. A new investor
- B. A old investor
- C. A member of the stock exchange who cannot meet his obligations
- D. None of the above
Explanation: In stock-market terminology, a lame duck is a member who cannot fulfil financial obligations arising from transactions.
Correct answer: A member of the stock exchange who cannot meet his obligations- A. Reliance Industries Ltd.
- B. British Gas
- C. General Motors
- D. State Bank
Explanation: Reliance Industries has historically been reported as holding the record for the largest number of shareholders among the listed companies…
Correct answer: Reliance Industries Ltd.- A. Milton Friedman
- B. Adam smith
- C. Alfred Marshal
- D. Karl Marx
Explanation: The statement is associated with Milton Friedman’s view that a business’s primary economic responsibility is to conduct business…
Correct answer: Milton Friedman- A. interest
- B. Profit
- C. rent
- D. wages
Explanation: Profit is the reward earned by the entrepreneur for organising production and bearing business risk.
Correct answer: Profit- A. Capital
- B. Interest
- C. Profit
- D. None of these
Explanation: Capital is a factor of production because tools, machinery, buildings and equipment help produce goods and services.
Correct answer: Capital- A. Bullish
- B. Bearish
- C. Falling
- D. Crashing
Explanation: A bearish market is one in which investors expect prices to fall and selling pressure dominates.
Correct answer: Bearish- A. Golden bonus
- B. Golden shake hand
- C. Friendly handshake
- D. Golden handshake
Explanation: A golden handshake is a substantial payment or benefits package offered to a senior employee on retirement or departure.
Correct answer: Golden handshake- A. Controlling Banks
- B. Controlling cooperation
- C. Controlling markets
- D. None of them
Explanation: Deregulation means removing or reducing government rules and controls over markets so that prices, entry and business decisions are…
Correct answer: Controlling markets- A. A big company
- B. Stock Exchange
- C. Joint stock
- D. A multinational company
Explanation: A stock exchange is an organised market where securities such as shares and bonds are bought and sold.
Correct answer: Stock Exchange- A. Free market economy
- B. Laissez faire also Laisser faire
- C. Open market economy
- D. Liberal market economy
Explanation: Laissez-faire means allowing private commerce to operate with little or no government interference.
Correct answer: Laissez faire also Laisser faire1513. What is Dumping ?
- A. Sale of goods in large quantities with high quality
- B. Sale of goods in large quantities with low quality
- C. Sale of goods in large quantities and at a low price
- D. Sale of goods in large quantities with high price
Explanation: Dumping occurs when goods are exported and sold at an unusually low price, often below their normal value or domestic price.
Correct answer: Sale of goods in large quantities and at a low price- A. Limited Company
- B. Society
- C. Corporation
- D. Cooperative
Explanation: A cooperative is owned and managed by the people who use its services, such as its members or customers.
Correct answer: Cooperative- A. Adam smith
- B. David Ricardo
- C. David smith
- D. Adam Ricardo
Explanation: Adam Smith is widely called the father of economics because his 1776 work, The Wealth of Nations, provided a foundational systematic…
Correct answer: Adam smith- A. Bankruptcy
- B. Default
- C. Total loss
- D. Crash
Explanation: Bankruptcy is the legal or financial condition in which a debtor cannot meet obligations to creditors.
Correct answer: Bankruptcy- A. Wall street
- B. NASDAQ
- C. Nikkei index
- D. Yahoo index
Explanation: Wall Street is the common collective term for the U.S. securities industry and its firms, including brokers, dealers and underwriters.
Correct answer: Wall street1518. Interest that is calculated as a simple percentage of the original principal amount is called ?
- A. Market interest
- B. Easy interest
- C. Compound interest
- D. Simple interest
Explanation: Simple interest is calculated only on the original principal, using the formula principal multiplied by rate and time.
Correct answer: Simple interest- A. Rearranged loans
- B. Rescheduled loans
- C. Altered loans
- D. None of these
Explanation: Rescheduled loans have their repayment timetable or maturity extended to make instalments easier for the borrower to meet.
Correct answer: Rescheduled loans- A. Limited company
- B. Registered company
- C. Public company
- D. Public limited company
Explanation: A registered company in this context is one that has filed the required statement with the SEC and met its disclosure requirements.
Correct answer: Registered company