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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

The optimal level of provision of public goods is where society total willingness to pay per unit is equal to the ?
A variable cost of producing the good
B average cost of producing the good
C marginal cost of producing the good
D total cost of producing the good
Correct Answer: marginal cost of producing the good
The whole class of goods that will be under produced or not produced at all in a completely unregulated market economy are referred to as ?
A Pareto goods
B public goods
C private goods
D free goods
Correct Answer: public goods
imperfect competition occurs ?
A When firms are not profit maximisers
B When firms have some control over price and competition
C When the consumption of the good involves an external benefit
D Whenever firms are losing money.
Correct Answer: When firms are not profit maximisers
The statement everything affects everything else reflects the principle behind ?
A efficiency analysis
B partial equilibrium analysis
C general equilibrium analysis
D equity analysis
Correct Answer: general equilibrium analysis
Externalities are a problem only if ?
A decision makers do not take them into account
B all firms are perfectly competitive
C the externalities are negative
D all firms are monopolistic
Correct Answer: decision makers do not take them into account
A person will continue to pursue an activity up to the point where ?
A Marginal benefit equals marginal damage cost
B marginal benefits equals marginal social cost
C marginal benefit equals marginal private cost
D marginal social cost equals marginal external cost
Correct Answer: marginal benefit equals marginal private cost
If some gain and some lose as the result of a proposed change and it can be demonstrated that the value of the gains would exceed the value of the losses then the change is said to be ?
A technically efficient.
B inefficient.
C potentially efficient
D unequivocally Pareto optimal
Correct Answer: potentially efficient
Markets fail to produce an efficient allocation of resources, but government also fail because ?
A elected officials will act selflessly for the good of society and ignore their own self interest
B the managers of government agencies are trying to maximize the profit of their agency and they ignore the implications that this has on other departments
C the optimal level of public goods may be too expensive for the society to produce
D the measurement of social damages and benefits is difficult and imprecise
Correct Answer: the measurement of social damages and benefits is difficult and imprecise
The idea that when externalities are present private parties can arrive at the efficient solution without government intervention under certain circumstance is known as ?
A The coase theorem
B Arrow’s impossibility theorem
C the drop -in-the bucket problem.
D
Correct Answer: The coase theorem
If a large number of individuals are affected by an external benefit, private bargaining will not work because of ?
A non-rivalry
B the free-rider problem
C the Coase theorem
D the fallacy of composition
Correct Answer: the free-rider problem
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