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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

As the wage rate per hour increases, the opportunity cost of leisure ?
A remains constant
B increases since the cost of forgoing one hour of work increases
C decreases since the customer now has more income to spend
D may increase of decrease depending on the individual’s preferences.
Correct Answer: increases since the cost of forgoing one hour of work increases
Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ?
A income effect is zero
B substitution effect outweighs the income effect
C income effect outweighs the substitution effect
D income effect and the substitution effects are equal
Correct Answer: income effect outweighs the substitution effect
Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ?
A will have no effect on labour supply
B will decreases labour supply
C could cause either an increases or a decrease in labour supply
D will increase labour supply.
Correct Answer: will decreases labour supply
Constrained choice is relevant for households ?
A making spending decision but not labour-supply decision.
B making both spending and labour-supply decisions
C considered to be ‘poor’ but not for those who are considered to be ‘rich’
D making labour-supply decisions but not spending decisions.
Correct Answer: making both spending and labour-supply decisions
The greatest advantage of a negative income tax is that it ?
A generates a smaller disincentive to work than most alternative anti-poverty policies.
B reduces the cost to the government of fighting poverty
C would not provide benefits to lazy people
D ensures that the poor actually receive what the government thinks they need does all these answers.
Correct Answer: generates a smaller disincentive to work than most alternative anti-poverty policies.
An increase in the minimum wage will cause a relatively large increase in unemployment among ?
A unskilled workers if the demand for labour is relatively inelastic
B unskilled workers if the demand for labour is relatively elastic
C skilled workers if the demand for labour is relatively elastic
D skilled workers if the demand for labour is relatively inelastic
Correct Answer: unskilled workers if the demand for labour is relatively elastic
Suppose two economists are arguing about policies that deal with unemployment. One economist says. The government could lower unemployment by one percentage point if it would just increase government spending by 50 billion dollars the other economist responds Nonsense and poppycock! If the government spent an additional 50 billion dollars it would reduce unemployment by only one tenth of one percent. and that effect would only be temporary! These economists ?
A None of these answers
B Disagree because they have different scientific judgments
C really don’t disagree at all. It just appears that they disagree
D disagree because they have different values
Correct Answer: Disagree because they have different scientific judgments
Which of the following issues is related to microeconomics ?
A the impact of oil prices on car production
B The impact of money on inflation
C The impact of technology on economics growth
D The impact of the deficit on saving
Correct Answer: the impact of oil prices on car production
Positive statements are ?
A Macroeconomic
B Microeconomics
C statements of description that can be tested
D Statements of prescription that involve value judgments.
Correct Answer: statements of description that can be tested
Which of the following statements is normative ?
A Large government deficits cause an economy to grow more slowly
B People work harder if the wage is higher
C The unemployment rate should be lower
D Printing too much money causes inflation
Correct Answer: The unemployment rate should be lower
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