Business Economics MCQ Questions and Answers for Practice

1. With which of the following is the concept of marginal cost closely related?

1. Variable cost
2. Fixed cost
3. Opportunity cost
4. Economic cost

2. Which one of the following is also known as Long run average cost curve?

1. Basket Curve
2. Wallet Curve
3. Envelope curve
4. None of above

3. Which of the following statements is false?

1. Statistics is derived from the Latin word status
2. statistics is derived from Italian word statista
3. statistics is derived from in French word statistik
4. none

4. Which of the following is the method of measuring elasticity of demand when change in price of a commodity is substantial?

1. Arc method
2. Point method
3. Percentage method
4. None of these

5. Which of the following is the best formula of the production function?

1. Q = F (L,L,K,E)
2. Q = F (L,E)
3. Q = F (L,L,K,E) T
4. None of above

6. Which of the following is not considered production in Economics?

1. Tilling of soil by farmers
2. Singing a song before friends
3. Construction of Canal by laborers
4. Painting a picture for sale

7. Which of the following is not a characteristic of labour?

1. Its inseparable from laborer
2. It is immobile & passive
3. It is human efforts
4. It is rewarded with wages

8. Which of the following is an example of internal diseconomies?

1. High salary of firm
2. High tax for industry
3. Low tax for industry
4. Labour – management disputes in firm

9. Which of the following is an example of External economies?

1. Low salary of firm
2. tax exemption for industry
3. High tax for industry
4. Labour – management disputes of firm

10. Which of the following is an example of external diseconomies?

1. Lower salary of firm
2. Higher salary of firm
3. Tax exemption by Govt.
4. High Tax Govt. Policy

11. Which of the following does not have non linear shape?

1. Total cost curve
2. Total Variable cost curve
3. Total fixed cost curve
4. None of above

12. which method of data collection covers the widest area?

1. Telephone Interview
2. Mailed Questionnaire
3. Direct Interview
4. All of these

13. When the price of a complementary of commodity X falls, the demand for X

1. Falls
2. Rises
3. Remains unchanged
4. Any of the above

14. When marginal product (MP) & average product (AP) both falls

1. AP lies below MP
2. AP & MP intersect
3. MP Lies below AP
4. None of above

15. Under a Command economy

1. State plays a major role
2. Market plays major role
3. Both a & b
4. Neither a nor b