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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.

Which of the following statements is true if the government places a price ceiling on petrol at Rs150 per litre and the equilibrium price is Rs100 per litre ?

A A significant increase in the demand for petrol could cause the price ceiling to become a binding constraint.

B A significant increase in the supply for petrol could cause the price ceiling to become a binding constraint.

C There will be a shortage of petrol

D There will be surplus of petrol

Review Detailed Answer

Correct Answer: A significant increase in the demand for petrol could cause the price ceiling to become a binding constraint.

The surplus caused by a binding price floor will be greatest if ?

A demand is inelastic and supply in elastic

B supply is inelastic, and demand is elastic

C both supply and demand are elastic

D both supply and demand are inelastic

Review Detailed Answer

Correct Answer: both supply and demand are elastic

Which of the following statements about a binding price ceiling is true ?

A The shortage created by the price ceiling is greater in the short ran than in the long run.

B The surplus created by the price ceiling is greater in the short run than in the long run

C The surplus created by the price ceiling is greater in the long run than in the short run

D The shortage created by the price ceiling is greater in the long run than in the short run

Review Detailed Answer

Correct Answer: The shortage created by the price ceiling is greater in the long run than in the short run

For a price ceiling to be binding constraint on the market the government must set it ?

A above the equilibrium price

B below the equilibrium price

C precisely at the equilibrium price

D at any price because all price ceilings are binding constraints

Review Detailed Answer

Correct Answer: below the equilibrium price

Which of the following statements about the burden of a tax is correct ?

A The tax burden generated from a tax placed on a good consumer perceive to be a necessity will fall most heavily on the sellers of the good

B The burden of a tax falls on the side of the market (buyers or sellers) from which it is collected

C The distribution of the burden of a tax is determined by the relative elasticities of determined by legislation.

D The tax burden falls most heavily on the side of the market (buyers and sellers) that is most willing to leave the market when price movements are unfavorable to them.

Review Detailed Answer

Correct Answer: The distribution of the burden of a tax is determined by the relative elasticities of determined by legislation.

A tax placed on a good that is a necessity for consumers will likely generate a tax burden that ?

A falls more heavily on sellers

B falls entirely on sellers

C falls more heavily on buyers.

D is evenly distributed between buyers and sellers.

Review Detailed Answer

Correct Answer: falls more heavily on buyers.

When a tax is collected from the buyers in a market, ?

A the tax burden falls most heavily on the buyers.

B the buyers bear the burden of the tax

C the sellers bear the burden of the tax

D the tax burden on the buyers and sellers in the same as an equivalent tax collected from the sellers

Review Detailed Answer

Correct Answer: the tax burden on the buyers and sellers in the same as an equivalent tax collected from the sellers

Within the supply and demand model, a tax collected from the sellers of a good shift the ?

A demand curve downward by the size of the tax per unit.

B supply curve downward by the size of the tax per unit

C demand curve upward by the size of the tax per unit.

D supply curve upward by the size of the tax per unit

Review Detailed Answer

Correct Answer: supply curve upward by the size of the tax per unit

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

Which of the following statements is true if the government places a price ceiling on petrol at Rs150 per litre and the equilibrium price is Rs100 per litre ?

The surplus caused by a binding price floor will be greatest if ?

Which of the following statements about a binding price ceiling is true ?

For a price ceiling to be binding constraint on the market the government must set it ?

Which of the following statements about the burden of a tax is correct ?

A tax placed on a good that is a necessity for consumers will likely generate a tax burden that ?

When a tax is collected from the buyers in a market, ?

Within the supply and demand model, a tax collected from the sellers of a good shift the ?