Economics (Microeconomics & Macroeconomics) MCQs

1. What does microeconomics primarily study?
(A) National income and inflation
(B) Individual consumer and firm behavior
(C) Fiscal and monetary policy
(D) Balance of payments

2. Which of the following is a macroeconomic concept?
(A) Consumer equilibrium
(B) Marginal utility
(C) Gross Domestic Product (GDP)
(D) Price elasticity of demand

3. The law of demand states that, ceteris paribus:
(A) Demand increases with price
(B) Demand decreases with price
(C) Supply decreases with price
(D) Demand and supply are unrelated

4. What is meant by opportunity cost?
(A) The cost of all alternatives
(B) The cost of the next best alternative foregone
(C) The total monetary cost
(D) The cost incurred in marketing

5. Which of these best describes the term “inflation”?
(A) Increase in exports
(B) Decrease in national income
(C) General rise in prices
(D) Rise in foreign reserves

6. In which market structure is there only one seller?
(A) Monopoly
(B) Perfect competition
(C) Oligopoly
(D) Monopolistic competition

7. GDP is the total market value of:
(A) All intermediate goods and services
(B) All goods and services produced by foreigners
(C) All final goods and services produced within a country in a given period
(D) All financial transactions

8. An example of a public good is:
(A) Ice cream
(B) National defense
(C) Shoes
(D) Furniture

9. What is fiscal policy concerned with?
(A) Interest rates
(B) Money supply
(C) Government spending and taxation
(D) Exchange rates

10. What does the term “ceteris paribus” mean?
(A) In conclusion
(B) All things being equal
(C) As soon as possible
(D) Based on assumption

11. What does elasticity measure in economics?
(A) Flexibility of wages
(B) Sensitivity of demand or supply to changes in price or income
(C) Rate of inflation
(D) Increase in money supply

12. The unemployment rate measures:
(A) All people without jobs
(B) Adults who are not working
(C) The percentage of the labor force without a job
(D) The population below poverty line

13. What is a budget deficit?
(A) When government revenue equals expenditure
(B) When government revenue exceeds expenditure
(C) When government expenditure exceeds revenue
(D) When exports exceed imports

14. Which curve shows the trade-off between inflation and unemployment?
(A) Laffer Curve
(B) IS Curve
(C) Phillips Curve
(D) Supply Curve

15. The law of diminishing marginal utility states that:
(A) Total utility increases with each unit consumed
(B) Utility remains constant with additional consumption
(C) Marginal utility decreases as more units are consumed
(D) Utility becomes negative

16. A normal good is one where:
(A) Demand falls when income rises
(B) Demand rises when income falls
(C) Demand rises with income
(D) Supply falls with price

17. What is the main tool of monetary policy?
(A) Government spending
(B) Taxation
(C) Interest rates
(D) Budget deficits

18. Which of the following is a leakage in the circular flow of income?
(A) Investment
(B) Consumption
(C) Taxation
(D) Government spending

19. A firm maximizes its profit when:
(A) Total cost equals total revenue
(B) Marginal cost equals marginal revenue
(C) Average cost equals average revenue
(D) Fixed cost equals variable cost

20. Which indicator measures changes in the cost of living?
(A) CPI
(B) GDP
(C) NNP
(D) GNP

1. What does microeconomics primarily study?
(A) National income and inflation
(B) Individual consumer and firm behavior
(C) Fiscal and monetary policy
(D) Balance of payments

2. Which of the following is a macroeconomic concept?
(A) Consumer equilibrium
(B) Marginal utility
(C) Gross Domestic Product (GDP)
(D) Price elasticity of demand

3. The law of demand states that, ceteris paribus:
(A) Demand increases with price
(B) Demand decreases with price
(C) Supply decreases with price
(D) Demand and supply are unrelated

4. What is meant by opportunity cost?
(A) The cost of all alternatives
(B) The cost of the next best alternative foregone
(C) The total monetary cost
(D) The cost incurred in marketing

5. Which of these best describes the term “inflation”?
(A) Increase in exports
(B) Decrease in national income
(C) General rise in prices
(D) Rise in foreign reserves

6. In which market structure is there only one seller?
(A) Monopoly
(B) Perfect competition
(C) Oligopoly
(D) Monopolistic competition

7. GDP is the total market value of:
(A) All intermediate goods and services
(B) All goods and services produced by foreigners
(C) All final goods and services produced within a country in a given period
(D) All financial transactions

8. An example of a public good is:
(A) Ice cream
(B) National defense
(C) Shoes
(D) Furniture

9. What is fiscal policy concerned with?
(A) Interest rates
(B) Money supply
(C) Government spending and taxation
(D) Exchange rates

10. What does the term “ceteris paribus” mean?
(A) In conclusion
(B) All things being equal
(C) As soon as possible
(D) Based on assumption

11. What does elasticity measure in economics?
(A) Flexibility of wages
(B) Sensitivity of demand or supply to changes in price or income
(C) Rate of inflation
(D) Increase in money supply

12. The unemployment rate measures:
(A) All people without jobs
(B) Adults who are not working
(C) The percentage of the labor force without a job
(D) The population below poverty line

13. What is a budget deficit?
(A) When government revenue equals expenditure
(B) When government revenue exceeds expenditure
(C) When government expenditure exceeds revenue
(D) When exports exceed imports

14. Which curve shows the trade-off between inflation and unemployment?
(A) Laffer Curve
(B) IS Curve
(C) Phillips Curve
(D) Supply Curve

15. The law of diminishing marginal utility states that:
(A) Total utility increases with each unit consumed
(B) Utility remains constant with additional consumption
(C) Marginal utility decreases as more units are consumed
(D) Utility becomes negative

16. A normal good is one where:
(A) Demand falls when income rises
(B) Demand rises when income falls
(C) Demand rises with income
(D) Supply falls with price

17. What is the main tool of monetary policy?
(A) Government spending
(B) Taxation
(C) Interest rates
(D) Budget deficits

18. Which of the following is a leakage in the circular flow of income?
(A) Investment
(B) Consumption
(C) Taxation
(D) Government spending

19. A firm maximizes its profit when:
(A) Total cost equals total revenue
(B) Marginal cost equals marginal revenue
(C) Average cost equals average revenue
(D) Fixed cost equals variable cost

20. Which indicator measures changes in the cost of living?
(A) CPI
(B) GDP
(C) NNP
(D) GNP