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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

Markets sometimes fail to exist because of________?
A externalities
B the free-rider problem
C a and b
D a and c
Correct Answer: a and b
Externalities arise because there is a divergence between ________ and _________?
A private costs, private benefits
B private costs, social costs or benefits
C social costs, social benefit
D insiders, outsiders
Correct Answer: private costs, social costs or benefits
The allocation of resources is not efficient if ?
A the marginal cost of production does not equal society’s marginal benefit
B the distribution is inequitable
C economic growth is low
D unemployment is high
Correct Answer: the marginal cost of production does not equal society’s marginal benefit
We cannot say whether one allocation of resources is better than another allocation because ?
A some people can’t count
B some people may not be permanent resident
C not all economic activity is legal
D We can’t make value judgments to compare different people’s welfare
Correct Answer: We can’t make value judgments to compare different people’s welfare
An allocation is Pareto-efficient if no reallocation of resources would make some people _______ without making others ________?
A worse off; worse off
B better off; better off
C better off; worse off
D equal, unequal
Correct Answer: better off; worse off
Moral hazard means that the act of insuring ____ that the desired outcome will occur?
A reduces the likelihood
B increases the likelihood
C guarantees
D none of the above
Correct Answer: increases the likelihood
A dominant strategy is ?
A a wining strategy
B a losing strategy
C a players best strategy when moving first
D a player’s best strategy whatever the strategies adopted by rivals
Correct Answer: a player’s best strategy whatever the strategies adopted by rivals
The prisoners Dilemma Game demonstrates that ?
A players are better of to act independently
B monopoly is better than competition
C people will always cheat
D players are better off if they co-operate
Correct Answer: players are better off if they co-operate
The reason for the kinked demand curve is that ?
A The oligopolist believes that competitors will match output increase but not output reduction
B The oligopolist believes that competitors will match price increase but not output reduction
C The oligopolist believers that competitors will match price cuts but not price rises
D The oligopolist believes that competitors will match price increase but not output increase
Correct Answer: The oligopolist believers that competitors will match price cuts but not price rises
A natural monopoly has a declining _______ over a large range of output?
A long run marginal cost
B short run marginal cost
C long run average cost
D long run marginal cost
Correct Answer: long run average cost
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