Basic Fundamentals of Economics Basics MCQ For UGC NET. UPSC, CS FOUNDATION and other competitive Exams

Test Series 1

 Basic Fundamentals of Economics Basics MCQ For UGC NET. UPSC, CS FOUNDATION  and other competitive Exams

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Multiple Choice Questions on Economics

1. Micro economics theory deals with 
(a) Economic behavior of individual economic decision making units;
(b) Economy as a whole ; (c) Trade relations ; (d) Economic growth of the society


2. Which of the following is a central problem of every economy 

(a) Abundance of resources ; (b) Scarcity of economic resources ; (c) Poverty; (d) Moral and ethical values


3. Equilibrium relates to which of these
(a) Market condition which oscillate ; (b) Market state of falling price;
(c) Market condition of rising price ; (d) Market conditions which once achieved tends to persist


4. General equilibrium analysis refers to 
(a) Behaviour of individual economic decision making units and individual markets in isolation; (b) Behaviour of all the individual decision making units and market viewed in totality;
(c) Both ; (d) (d) none


5. Normative economic theory deals with
    (a)  What is or how the economic problem facing the society are solved; 

    (b)  How the problem should be solved ; (c) What to Produce ; (d) How to produce 



6. In a mixed economy which sector(s) is/ are found
(a) Private Only ; (b) Public sector only ; (c) None ; (d) Both a and b


7. In economic theory the term “means” refers to 
(a) Resources ; (b) Arithmetic mean ; (c) A characteristic ; (d) None 



8. Market equilibrium of a commodity is determined by 
(a) Balancing of demand and supply position ; (b) Aggregate demand ; (c) Aggregate supply; (d) Government intervention 



9. Cetris Paribus means 
(a) Holding demand constant ; (b) Holding supply constant ; (c) Price being constant; (d) Other things being constant



10. Economic resources are 
(a) Unlimited ; (b) Limited in supply and use ; (c) Limited in supply but have alternative uses; (d) Unproductive


11. Which of the following is/ are not an economic resource
(a) Land ; (b) Capital ; (c) Labour ; (d) Air


12. Which of the following is/ are an economic resource
(a) Land ; (b) Capital ; (c) Labour ; (d) All the three


13. Which of the following is/ are a non-economic resource
(a) Air (b) Water ; (c) Sunlight ; (d) All the three


14. Which of these resources would be called as land in economics
(a) Coal mines of Bihar ; (b) Water resources of Uttaranchal ; (c) Mineral deposits of Jharkhand; (d) All the three


15. Which of these is not land in economics
(a) Tehri Dam ; (b) Forest reserves of Assam ; (c) Fish reserves in the Bay of Bengal; (d) Herbal plant of Uttaranchal


16. Which of these would be classified as capital in economics 
(a) Bhankra Dam ; (b) Indira canal ; (c) Golden triangle ; (d) All the three


17. Capital in economics means 

(a) Factor of production ; (b) Fund brought in by the entrepreneur; (c) Investment in shares, bank deposits ; (d) All the above


18. Scarcity of resources leads to
(a) Unsatisfaction of human wants ; (b) Evaluation of alternative uses of scarce resources; (c) Both ; (d) None


19. Who defined economics as “ Science which deals with wealth”
(a) J. (B) Say ; (b) (A) (C) pigou ; (c) Alfred Marshall ; (d) Robbins


20. Economics cannot be considered a perfect science because 
(a) Human behaviour is unpredictable
(b) It is difficult to make correct prediction of economic variables
(c) Economist do not have common opinion about a particular economic event (d) All the three


21. In economic goods includes material things which.......... 
(a) Can be transferred ; (b) Can be exchanged for one another ; (c) Both ; (d) None


22. In economic wealth is the stock of all those material and immaterial objects which......... 
(a) Are transferable ; (b) Have utility ; (c) Are scarce ; (d) All the three


23. In addition to three Central problem of economy, the additional problem(s) raised by the Modern economists is / are 
(a) Are the resources fully utilized or not ;
(b) How efficient is the production and distribution system;(c) Whether the capacity to produce or grow is increasing or is static ; (d) All the three


24. The basic assumption of an economic analysis is/ are (a) Cetris paribus ; (b) Rational behavior ; (c) Both ; (d) None


25. The terms Micro economic and Macro economics were coined by 
(a) Professor A Samulson ; (b) Giffen ; (c) Prof. Ragner Frisch ; (d) Eagle


26. ----------is known as father of economics 

(a) Adam Smith ; (b) Professor A Samulson ; (c) Alfred Marshall ; (d) J R Hicks


27. Which of these are outside the domain of macro economics
(a) Consumer behavior ; (b) National income ; (c) Economic growth; (d) Balance of payment and trade


28. Scarcity of resources means 
(a) Limited resources ; (b) Non – esxistence of resources ; (c) Both ; (d) None


29. Human wants are (a) Unsatisfiable ; (b) Unlimited ; (c) Undefined ; (d) Limited


30. Economics cannot be given the status of science because (a) Of non-uniformity of opinion and approach of economist; (b) Economic behaviour of human being is unpredictable; (c) Measuring rod of money is unstable ; (d) All the three


31. Which of the following is not a central problem of a society 

(a) What to produce ; (b) How to produce ; (c) For whom to produce ; (d) Where to produce


32. The paradox of Diamond is more costly than water is explained by (a) Marginal utility concept ;(b) Scarcity ; (c) Relative cost of production ; (d) All the three


33. Which of these is an economic activity (a) A father teaching his son at home instead of sending to any coaching centre (b) A hair dresser doing hair cut designing on payment
(c) A housewife mending her family cloths on her own
(d) A singer giving a show on his son’s wedding anniversary


34. The term “ Micro” is derived from the .......word which means........ (a) Latin, small ; (b) Greek, small ; (c) English, tiny ; (d) Roman, small


35. Which of the following issue relates to micro-economics (a) Impact of crude price hike on inflation(b) Impact of change in bank rate on bank saving and investment (c) Impact of Information technology on economic growth
(d) Impact of shortage of wheat production on wheat prices


36. Economics modes are (a) Based on some realistic assumptions ; (b) Based on hypothetical assumptions (c) Scientifically tested ; (d) Based on necessity


37. The famous book “An enquiry into the nature and causes of wealth of Nation” was written by – (a) Adam Smith ; (b) Samulson ; (c) Robertson ; (d) JB Say


38. The famous book “An enquiry into the nature and causes of wealth of Nation” was published in- (a) 1776 ; (b) 1750 ; (c) 1850 ; (d) 1886


39. The law of indifference is/are also know by- (a) Law of substitution ; (b) law of equimarginal utility ; (c) Law of diminishing marginal utility (d) All the three


40. Which of the following is not a central problem of a society 
(a) What to produce ; (b) How to produce ; (c) For whom to produce ; (d) What to eat


41. The central problem of how to produce is resolved by 
(a) Demand and supply of factor inputs ; (b) Demand and supply of goods;
(c) Relative prices and availability of factors of production ; (d) Government intervention


42. In free economy the decision about investment, saving and consumption are decided by (a) Price mechanism ; (b) Central bank ;(c) Planning Commission ;(d) Finance budget


43. Which of these statement is true about production possibility curve (PPC/PPF)
    (a)  It shows various combinations of two goods which yield same level of satisfaction
    (b)  It shows various combination of two goods which an economy can produce with a given amount 
of resources
 (c)  It shows various combination of two goods which an economy can produce with a given budget
 (d)  It shows various combination of two goods which an economy can produce with a given time


44. If production possibility frontier is linear it implies
(a) Constant opportunity cost ; (b) Economy is stagnant;(c) Underemployment of factor of production ;(d) With the increase in production, opportunity cost also increases


45. The opportunity cost of consumption is
(a) Lack of capital formation for future ; (b) Greater investment ; (c) Full employment ; (d) Deflation


46. The opportunity cost of capital investment is
   a) Sacrifice of current consumption ; (b) More consumption on luxury items; (c) Lower capital growth in future ; (d) Wastage of Resources


47. Any point beyond PPF is
(a) Attainable ; (b) Unattainable ; (c) Attainable with increase in production facilities ; (d) None


48. If an economy is working at a point left to PPF curve it shows that.........
 (a)  The economy is working at less than the full employment level ;
 (b)  The economy is at full employment level ;
 (c)  The economy is country is faced with excess production ; (d) There is glut of imports


49. Curvature of PPF is due to.........
(a) Increase in opportunity cost ; (b) Decrease in opportunity cost ; (c) Fall in demand; (d) Fall in supply


50. PPF is negative sloped due to
(a) Scarcity of production resources ; (b) Unlimited wants ; (c) Improvement in technology; (d) Increasing opportunity cost