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Economics Mcqs 4423 MCQs [All-Courses]

Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

If consumption when young and when old are both normal goods, an increase in the interest rate ?

A will always increase the quantity of saving

B will always decrease the quantity of saving

C will increase the quantity of saving if the substitution effect outweighs the income effect

D will increase the quantity of saving if the income effect outweighs the substitution effect

Review Detailed Answer

Correct Answer: will increase the quantity of saving if the substitution effect outweighs the income effect

If income where to double and prices were to to double the budget line would ?

A stay the same

B rotate inward

C shift outward in a parallel fashion

D rotates outward

Review Detailed Answer

Correct Answer: stay the same

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 A pair of socks is ?

A an inferior effect

B a Geffen good

C a normal good

D none of these answers

Review Detailed Answer

Correct Answer: a normal good

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?

A Z to point X

B X to point X

C X to point Z

D Y to point X

Review Detailed Answer

Correct Answer: Z to point X

If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ?

A a substitute good

B a normal good

C a complementary good

D an inferior good

Review Detailed Answer

Correct Answer: an inferior good

Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having an abundance of good Y, the marginal rate of substitution of good Y for good X (the slope of the indifference curve) ?

A rises

B stays the same

C could rise or fall depending on the relative prices of the two goods.

D falls

Review Detailed Answer

Correct Answer: rises

The consumer’s optimal purchase of any two goods is the point where ?

A the budget constraint crosses the indifference curve

B the two highest indifference curves cross

C the consumer reaches the highest indifference curve subject to remaining on the budget constraint

D the consumer has reached the highest indifference curve

Review Detailed Answer

Correct Answer: the consumer reaches the highest indifference curve subject to remaining on the budget constraint

The slope at any point on an indifference curve is known as ?

A the marginal rate of substitution

B the marginal rate of trade-off.

C the trade-off rates

D the marginal rate of indifference

Review Detailed Answer

Correct Answer: the marginal rate of substitution

A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ?

A right shoes and left shoes

B petrol from BP and petrol from shell

C kit-Kat chocolate snacks and Twix chocolate snacks

D coke and Pepsi

Review Detailed Answer

Correct Answer: right shoes and left shoes

If leisure is a normal good, an increase in the wage ?

A will always increase the quantity of labor supplied

B will increase the amount of labor supplied if the substitution effect outweighs the income effect

C will increase the amount of labor supplied if the income effect outweighs the substitution effect

D will always decrease the amount of labor supplied

Review Detailed Answer

Correct Answer: will increase the amount of labor supplied if the substitution effect outweighs the income effect

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

If consumption when young and when old are both normal goods, an increase in the interest rate ?

If income where to double and prices were to to double the budget line would ?

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 A pair of socks is ?

Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?

If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ?

The consumer’s optimal purchase of any two goods is the point where ?

The slope at any point on an indifference curve is known as ?

A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ?

If leisure is a normal good, an increase in the wage ?