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 79 of 88
- A. Adam Smith
- B. David Ricardo
- C. David Smith
- D. Adam Ricardo
Explanation: David Ricardo proposed comparative advantage, showing that countries can gain from trade by specialising according to their relative…
Correct answer: David Ricardo- A. Pledge
- B. Assurance
- C. Collateral
- D. Guaranty
Explanation: Collateral is an asset or security pledged to a lender to guarantee repayment if the borrower defaults.
Correct answer: Collateral- A. Business Crop
- B. Cash crop
- C. Money Crop
- D. Earning Crop
Explanation: A cash crop is cultivated mainly for sale in the market rather than for consumption by the farmer's household.
Correct answer: Cash crop- A. capital asset
- B. solid asset
- C. solid capital
- D. Future asset
Explanation: A capital asset is a long-term asset used in business, such as land, buildings or machinery, rather than an item held for immediate sale.
Correct answer: capital asset- A. Corporate Laws
- B. Secondary Laws
- C. By laws
- D. Internal Laws
Explanation: Bylaws are the internal rules governing the management and operation of an organization, such as procedures for meetings and…
Correct answer: By laws- A. Dealer
- B. Broker
- C. Agent
- D. Commission agent
Explanation: A broker acts as an intermediary who brings buyers and sellers together, usually earning a commission without taking ownership of the…
Correct answer: Broker- A. Open value
- B. Book value
- C. Real value
- D. Artificial value
Explanation: Book value is the amount at which an asset is recorded in a firm's accounting records, usually after depreciation.
Correct answer: Book value- A. Certificates
- B. Sureties
- C. Security bonds
- D. Bond
Explanation: A bond is an interest-bearing debt certificate issued by a government or corporation to borrow money.
Correct answer: Bond1569. Term the written order which directs that a specified sum of money be paid to a specified person ?
- A. Bill of Exchange BE
- B. Bill of Lading
- C. Bearer Cheque
- D. None of them
Explanation: A bill of exchange is a written and generally unconditional order requiring one party to pay a specified sum to a named person or order.
Correct answer: Bill of Exchange BE1570. Bearer cheque is ?
- A. Payable to anyone
- B. payable to person holding it
- C. payable through account only
- D. payable after specific period
Explanation: A bearer cheque is payable to whoever possesses or presents it, without the need for the payee's name to be endorsed.
Correct answer: payable to person holding it- A. Profit in a year
- B. Statements of accounts that shows debit and credit accounts under the broad heads
- C. Performance of a company
- D. Accurate economic position
Explanation: A balance sheet is a statement showing a firm's financial position through broad categories such as assets, liabilities and owners'…
Correct answer: Statements of accounts that shows debit and credit accounts under the broad heads- A. Assembly line
- B. Production line
- C. Both of them
- D. None of them
Explanation: An assembly line or production line moves a product successively through specialised operations until it is finished.
Correct answer: Both of them- A. Adam Smith
- B. Ricardo
- C. Hicks
- D. Barron
Explanation: David Ricardo presented the theory of comparative advantage, showing that countries can gain from trade by specialising according to…
Correct answer: Ricardo- A. Equal
- B. Different
- C. Undetermined
- D. Decreasing
Explanation: Comparative advantage makes trade beneficial when countries face different relative costs or cost ratios for producing goods.
Correct answer: Different- A. The sale of the sub-standard commodity
- B. Sale in a foreign market of a commodity at a price below marginal cost
- C. Sale in a foreign market of a commodity just at marginal cost without too much of profit
- D. Smuggling of goods without paying any customs duty
Explanation: Dumping involves selling a product in a foreign market at an abnormally low price, commonly described in elementary economics as below…
Correct answer: Sale in a foreign market of a commodity at a price below marginal cost- A. Shareholders
- B. Creditors
- C. Debtors
- D. Directors
Explanation: A debenture is a debt instrument issued by a company, so its holder has lent money to the company and is therefore a creditor.
Correct answer: Creditors- A. A share
- B. A debenture
- C. Invest
- D. Capital
Explanation: A share represents a unit of ownership in a company, however small the holding may be.
Correct answer: A share- A. Shares
- B. Debentures and bonds
- C. Commercial paper
- D. Government securities
Explanation: Credit-rating agencies assess debt and money-market instruments such as bonds, debentures, commercial paper and government securities for…
Correct answer: Shares1579. Which of the following payment instruments introduced by the banks is known as plastic money ?
- A. Bearer cheques
- B. Credit Cards
- C. Demand Drafts
- D. Gift Cheques
Explanation: Credit cards are called plastic money because they are plastic payment cards that allow purchases on credit.
Correct answer: Credit Cards- A. an even distribution of income
- B. an incentive to innovate
- C. a wide range of public goods
- D. full employment of labor
Explanation: Competition and the possibility of earning profit give firms in a free market an incentive to develop new products and production methods.
Correct answer: an incentive to innovate