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Economics Mcqs 4423 MCQs [All-Courses]

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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.

All Topics  4423

A good example of a public good is ?
A public transport
B the national health service
C national defence
D rail transport
Correct Answer: national defence
If my neighbour burns garden waste causing my house to fill with smoke this is an example of ?
A a production externality
B a second-best solution
C transaction costs
D a consumption externality
Correct Answer: a consumption externality
In the insurance industry, high-risk customers are more likely to take out insurance. This is an example of ?
A moral hazard
B risk aversion
C adverse selection
D a poor gamble
Correct Answer: adverse selection
In Nash equilibrium each player chooses the best strategy ?
A Assuming other players move first
B dominated by the other players
C given the strategies of other players
D that is a credible threat
Correct Answer: given the strategies of other players
When a market is contestable, incumbent firms must __________ to avoid the entry of new competitors?
A behave like competitive firms
B agree to act together
C differentiate their products
D practice price discrimination
Correct Answer: behave like competitive firms
All of the following are types of imperfect competition except ?
A monopolistic competition
B oligopoly
C monopoly
D unfair competition
Correct Answer: unfair competition
Tax shifting ?
A is the way in which a tax is structured
B is the ultimate distribution of a tax’s burden
C occurs when taxes cause prices to increase but wages to fall
D occurs when house hold can alter their behaviour and do something to avoid paying a tax.
Correct Answer: occurs when house hold can alter their behaviour and do something to avoid paying a tax.
Which of the following is the government most likely to subsidies ?
A Negative externalies
B Positive externalities
C Monopolies
D Oligopolies
Correct Answer: Positive externalities
The government is considering placing a tax on cigarettes to raise revenue to finance health-care benefits. The demand for cigarettes is price inelastic Which of the following statements is True ?
A This tax will not raise much revenue either in the short term or the long term since demand is price inelastic
B The tax on cigarettes may not raise as much revenue as anticipated in the years to com because the demand for cigarettes is likely to become more elastic over time.
C This a very good way to raise revenue both in the short term and in the long term, because there are no substitutes for cigarettes.
D No tax revenue can be raised in this way because sellers of cigarette will just lower their price by the amount of the tax and therefore, the price of cigarettes to consumers will not change
Correct Answer: The tax on cigarettes may not raise as much revenue as anticipated in the years to com because the demand for cigarettes is likely to become more elastic over time.
An example of an indirect tax is ?
A VAT
B inheritance tax
C income tax
D a tax on profits
Correct Answer: VAT
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