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Economics MCQs

  • Goods produced to produce yet other goods is called

    (A) final goods
    (B) capital
    (C) investment
    (D) resources

    The answer is: (B) capital

  • Which economic term is used to represent inequality in income distribution?

    (A) GDP
    (B) GNP
    (C) Gini
    (D) HDI

    The answer is: (C) Gini

  • The value of the good or service forgone by choosing another investment is called

    (A) opportunity cost
    (B) purchasing power parity
    (C) disposable income
    (D) consumer price index

    The answer is: (A) opportunity cost

  • The central role of markets is to determine the

    (A) quality of goods
    (B) quantity of goods
    (C) level of income
    (D) price of goods

    The answer is: (D) price of goods

  • Subsidies are used to encourage _____ of a commodity.

    (A) consumption
    (B) production
    (C) saving
    (D) inflation

    The answer is: (B) production

  • Which from the following economic resources cannot be converted into commodity?

    (A) Land
    (B) Labour
    (C) Capital
    (D) All of these can be converted into commodity

    The answer is: (B) Labour

  • Which from the following are features of a modern economy?

    (A) Specialization
    (B) Division of Labor
    (C) Financial Markets
    (D) All of the above

    The answer is: (D) All of the above

  • When no firm or consumer is large enough to affect the market price, the market is assumed to have

    (A) perfect competition
    (B) imperfect competition
    (C) no competition
    (D) none of these

    The answer is: (A) perfect competition

  • Which from the following are the results of imperfect competition in the markets?

    (A) Monopolies
    (B) Externalities
    (C) Public goods
    (D) All of the above

    The answer is: (D) All of the above

  • When one event occurred before another event, the fallacy in economic reasoning that the first event caused the second event is called

    (A) the post hoc fallacy
    (B) failure to hold other things constant
    (C) the fallacy of composition
    (D) normative fallacy

    The answer is: (A) the post hoc fallacy