Question. The meaning of Greek word ‘oikonomia’ is …….
(a) Wealth Management
(b) House Management
(c) Business Economics
(d) Business Management
Answer: B
Question. ……….evaluates and pass value judgment
(a) Positive science
(b) Pure science
(c) Social Science
(d) Normative Science
Answer: D
Question. In Business economics ‘Means’ refers to-
(a) Human wants
(b) Resources
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: B
Question. Which of the following is an economic activity?
(a) Housewife doing household duties
(b) Listening to music on radio
(c) Medical facility rendered by charitable trust
(d) Teaching one’s own son at home.
Answer: C
Question. The law of Scarcity-
(a) Does not apply to developed and rich countries
(b) Applies only to less developed countries
(c) Implies that the consumers’ want will be satisfied in a socialist economy
(d) Implies that consumers’ want will never be completely satisfied.
Answer: D
Question. Consider the following and decide, which economy (if any) is without scarcity
(a) American economy
(b) Indian economy between 1947- 2000
(c) Pre independent Indian economy
(d) None of the above
Answer: D
Question. Inventory does not includes
(a) Raw Material
(b) Work in progress
(c) Finished goods
(d) None of the above
Answer: D
Question. What does the scarcity of resource implies…
(a) We must develop way to decrease
(b) Not all wants can be satisfied
(c) Resources can not satisfy any want
(d) Resources are very scarce and shall not be used at all
Answer: B
Question. Rational decision making requires-
(a) One’s choice never vary
(b) One’s choice be consistent with one’s goal
(c) One makes choices that do not involve trade-offs
(d) One must be graduate to make decision
Answer: B
Question. …….. DefinedBusiness Economics in terms of the use of economic analysis in the formulation of business policies?
(a) J.B Say
(b) Alfred Marshall
(c) Walker
(d) Joel Dean
Answer: D
Question. Business Economics is also known as…………
(a) Managerial Economics
(b) Social Economics
(c) Environmental Economics
(d) Money Market Economics
Answer: A
Question. ………. is the technique of predicting future demand of goods and services on the basis of past behavior of factor.
(a) Demand analysis
(b) Demand Forecasting
(c) Market analysis
(d) Price analysis
Answer: B
Question. In Business economics ‘ends’ refers to-
(a) Human wants
(b) Resources
(c) Both (a) and (b)
Answer: A
Question. Which of the following would be considered a disadvantage of allocating resources using a market system?
(a) Income will tend to be unevenly distributed.
(b) Significant unemployment may occur.
(c) It cannot prevent the wastage of scarce economic resources.
(d) Profits will tend to be low.
Answer: A
Question. Which of the following is an economic activity?
(a) Boy helping his friend to solve puzzle.
(b) Teams playing friendly football match
(c) A teacher teaching to class
(d) Watching Television
Answer: C
Question. Scarcity in Economics is an.
(a) Relative concept
(b) Absolute concept
(c) Irrelevant concept
(d) Not a concept at all
Answer: A
Question. ………..refers to the process of selecting an appropriate alternative that will provide the most efficient means of attaining a desired end, from two or more alternative courses of action?
(a) Problem solving
(b) Problem analyzing
(c) Managerial expertise
(d) Decision making
Answer: D
Question. …………explains the relationship between input and output
(a) Cost theory
(b) Supply theory
(c) Demand theory
(d) Production theory
Answer: D
Question. The meaning of the word ‘Economic’ is closely connected with the word-
(a) Scarce
(b) Unlimited
(c) Restricted
(d) Both (a) and (b)
Answer: A
Question. Pragmatic approach means -
(a) Realistic
(b) Both (a) and (b)
(c) Neither (a) nor (b)
Answer: B
Question. Economics is a …………
(a) Science
(b) Art
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Adam smith published his masterpiece “An enquiry into the nature and causes of wealth of nation” in the year ………….
(a) 1776
(b) 1786
(c) 1756
(d) 1766
Answer: A
Question. Which of the following statement is not correct?
(a) Business Economics refers to the integration of economic theory with business practice
(b) Business Economics is not only valuable to business decision makers, but also useful for managers of ‘not-for-profit’ organisations
(c) theories of Economics provide the tools which explain various concepts such as demand, supply, costs, price, competition etc
(d) Business Economics is concerned only with Micro Economics
Answer: D
Question. Normative Science explains-
(a) “What is”
(b) “What ought to be”.
(c) “What will”
(d) Both (a) and (b)
Answer: B
Question. The study of economic behavior of an individual firm or industry in national economy is called as ……
(a) Micro Economics
(b) Macro Economics
(c) Business Economics
(d) Behavioral Economics
Answer: A
Question. Which of the following is not an economic activity?
(a) Housewife doing household duties
(b) Manufacturing of garments at subsidized rate.
(c) Medical facility rendered by charitable trust
(d) A CA doing his own practice.
Answer: A
Question. Human wants are…... and means to satisfy these wants are…...
(a) Limited, scarce
(b) Unlimited, unlimited
(c) Unlimited, scarce
(d) Limited, Unlimited
Answer: C
Question. Which of the following involves Business decision making?
(a) Continue or shut down decision
(b) Launching of new product
(c) Proper debt and equity mix
(d) All of the above
Answer: D
Question. The word ‘Economics’ originates from the word ………………
(a) Oikomnomikos
(b) Oikonomia
(c) Eikonomikos
(d) Ekconomics
Answer: B
Question. We mainly study the following in Macro-Economics: ………………
(a) External value of money
(b) Product pricing
(c) National income and output
(d) (a) and (c)
Answer: D
Question. Micro and macro are not two independent approaches to economic analysis but they are complementary to each other.
(a) False
(b) True
(c) Partly true
(d) Partly false
Answer: B
Question. Economic theories are….…
(a) Simplistic
(b) Old
(c) Both (a) and (b)
Answer: C
Question. What is the “fundamental premise of the economics?”
(a) Natural Resources will always be scarce
(b) Individuals are capable of establishing goals and acting in manner consistent with achievement of those goals
(c) Individuals chose alternative for which they believe the net gain to be the greatest.
(d) No matter what the circumstance, individual choice always involves a trade- off
Answer: C
Question. Positive Science explains-
(a) “What is”
(b) “What was”
(c) “What ought to be”
(d) “What will”
Answer: A
Question. The study of behavior of consumers in the market and the effect of changes in the determinants of demand is called as
(a) Demand analysis
(b) Demand forecasting
(c) Cost analysis
(d) Market analysis
Answer: A
Question. Positive science is-
(a) Descriptive
(b) Prescriptive
(c) Explanatory
(d) Imaginary
Answer: A
Question. The word ‘Economics’ originates from the ………… world ‘Oikonomia’
(a) Roman
(b) French
(c) Greek
(d) European
Answer: C
Question. ……..also called as ‘Price Theory’ as it explains the composition of total production.
(a) Micro economics
(b) Macro Economics
(c) Demand theory
(d) Supply theory
Answer: A
Question. Business economics is not affected by external factors
(a) True
(b) False
(c) Partially true
(d) Cannot be commented
Answer: B
Question. State which of the following statement is not true
(a) Business economics is interdisciplinary
(b) There are three types of economy- Socialist Economy, Capitalist Economy and Mixed Economy
(c) Business Economics used the theory of Market and Private Enterprises
(d) The term Micro-Economics is Derived from Greek work ‘Makros’
Answer: D
Question. ……enables the firm to recognise the behaviour of costs when variables such as output, time period and size of plant changes.
(a) Cost analysis
(b) Accounting cost
(c) Production analysis
(d) Demand analysis
Answer: A
Question. Normative science is-
(a) Descriptive
(b) Prescriptive
(c) Explanatory
(d) Imaginary
Answer: B
Question. Degree of market power is determined by-
(a) Cost analysis
(b) Market structure analysis
(c) All of the above
Answer: B
Question. ……….. systematized the concept in the form the book which was entitled as, ‘‘An Enquiry intothe Nature and Cause of the Wealth of Nations’’
(a) George Bernard Shaw
(b) Adam Smith.
(c) Alfred Marshall
(d) A. C. Pigou
Answer: B
Question. Wants can be satisfied by consumpotion of………../ are economic wants
(a) Goods
(b) Services
(c) Goods and services
(d) None of the above
Answer: C
Question. …….also called as ‘Income Theory’ as it explains level of total production, total consumption, total savings and total investment and the rice or fall in these levels.
(a) Micro economics
(b) Macro economics
(c) Demand Theory
(d) Supply theory
Answer: B
Question. Macro Economics deals with
(a) External value of money
(b) Employment and economic growth
(c) General price level
(d) All of above
Answer: D
Question. In a free market economy, when consumers increase their purchase of a good and the level of _______ exceeds
(A) Demand, supply
(B) Supply, demand
(C) Prices, demand
(D) Profit, supply
Answer: A
Question. We mainly study the following in Micro-Economics: ………………
(a) General price level
(b) National income and output
(c) Location of industry
Answer: C
Question. ……..analyses cause and effect relationship but does not pass any value judgment.
(a) Positive or pure science
(b) Normative science
(c) None of the above
(d) All of above
Answer: B
Question. Which of the following is the best general definition of the study of Economics?
(a) Inflation and unemployment in a growing economy.
(b) Business decision making under foreign competition.
(c) Individual and social choice in the face of scarcity.
(d) The best way to invest in the stock market.
Answer: C
Question. Till 19th century Economics was known as
(a) Political Economy
(b) Social Economy
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A
Question. Which of the following does not involve Business decision making?
(a) Lease or purchaseof an asset
(b) Deciding which movie to watch on weekend
(c) In-house production or outsource
(d) Which production method should be used for manufacturing of goods?
Answer: B
Central Economic Problem MCQs with Answrs
Question. The economy which uses all its recourses on production of …… goods only, con not provide for future growth prospect.
(a) Consumer goods only
(b) Capital goods only
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A
Question. Which of the following statement is true in context with economic problem of ‘ for whom to produce’
(a) Higher the income, higher will be the buying capacity and higher will be his demand for goods in general.
(b) Higher the income, lower will be the buying capacity and higher will be his demand for goods in general
(c) Goods will be produced for those who do not have buying capacity
(d) income one will be able to make depends only on the amount of work he does
Answer: A
Question. While solving the question of ’ how to produce’ the economy should consider-
(a) Labour intensive technique
(b) Capital intensive technique
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Distribution and sharing of national product relates to the problem of
(a) How to provide for economic growth
(b) What to produce
(c) How to produce
(d) For whom to produce
Answer: D
Question. Discounts, price cutting, Advertisements, etc in capitalist economy are-
(a) Types of government regulation
(b) Effects of consumer sovereignty.
(c) Method of handling competition.
(d) None of the above.
Answer: C
Question. Capital intensive technique would get chosen in
(a) Capital surplus economy
(b) Labour surplus economy
(c) Developed economy
(d) Developing economy
Answer: A
Question. Capitalist economy is also known as-
(a) Free market economy
(b) Controlled market economy
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: A
Question. Free market economy driving force is-
(a) Welfare of the people
(b) Profit motive
(c) Rising income and level of living
(d) None of the above
Answer: B
Question. An economy can spend on all its recourses on current consumption without making provision for economic growth
(a) True
(b) False
(c) Partially true
(d) Cannot be commented at all
Answer: B
Question. Laissez-faire economy is another term used for
(a) Mixed economy
(b) Capitalist economy
(c) Socialist economy
(d) None of the above
Answer: B
Question. Consumer Sovereignty means-
(a) that buyers ultimately determine which goods and services will be produced and in what quantities.
(b) consumer will pay only how much
(c) consumer will help the producer in manufacture of goods or rendering of services
(d) consumer have unlimited purchasing power.
Answer: A
Question. There is no freedom of choice in-
(a) Capitalist economy
(b) Socialist economy
(c) Mixed economy
(d) All of the above
Answer: B
Question. Which of the following statement is not true-
(a) There are various alternative techniques of producing a commodity.
(b) A society cannot satisfy each and every want of society.
(c) If society uses all the resources for current consumption and no provision is made for future production, the society’s production capacity would not increase..
(d) None of above
Answer: D
Question. An entrepreneur will produce goods and services choosing that technique of production which renders his cost of production……
(a) Minimum.
(b) Maximum.
(c) Exactly similar to other competitors.
(d) Higher compared to other competitor
Answer: A
Question. While solving the question of ’ how to produce’ the choice of appropriate method of production depends upon-
(a) Availability of factor of production
(b) Price of different factor of production
(c) Both (a) and (b)
Answer: C
Question. Under capitalist economies, the answer to the fundamental questionswhat, how and for whom to produce are obtained by–
(a) Market forces of demand and supply.
(b) Government regulation
(c) Cost benefit analysis
(d) All of the above.
Answer: A
Question. Which of the following is not the feature of capitalist economy:
(a) Right to private property.
(b) Freedom of economic choice.
(c) Collective ownership
(d) Consumer Sovereignty
Answer: C
Question. In deciding ‘ how to produce’ the economy should decide on-
(a) Types to goods to be produced
(b) Consumer goods or capital goods
(c) Method of production
(d) Quantity of goods to be produced
Answer: C
Question. In a free market economy, when consumers increase their purchase of a good and the level of _______ exceeds ______ then prices tend to rise.
(a) Supply, demand
(b) Demand, supply
(c) Prices, demand
(d) Profits, supply
Answer: B
Question. Which of the following is not a central economic problem?
(a) What to produce?
(b) When to produce?
(c) How to produce?
(d) For whom to produce?
Answer: B
Question. For analysing ownership and utilisation of recourses, economies are classified into-
(a) Mixed economy
(b) Capitalist economy
(c) Socialist economy
(d) All of the above
Answer: D
Question. Productive efficiency means -
(a) Recourses are employed in their most valued uses
(b) Total number of goods produced is more
(c) Goods and services are produced at least cost without wastage
(d) Best recourse are employed
Answer: A
Question. Mixed economy is characterised by-
(a) Existence of private, public and joint sector
(b) Planned development
(c) Balanced regional development
(d) All of the above
Answer: D
Question. Capitalist economy is characterised by-
(a) Profit motive
(b) Competition among buyers and sellers
(c) Inequality of income.
(d) All of the above
Answer: D
Question. Labour intensive technique would get chosen in
(a) Capital surplus economy
(b) Labour surplus economy
(c) Developed economy
(d) Developing economy
Answer: B
Question. Under………..economy, government has no control over price fluctuations (a) Mixed economy
(a) Free Market
(b) Socialist economy
(c) None of the above
Answer: A
Question. Which type of economy gives rise to most efficient allocation of recourse and capital in the standard Micro- Economic framework?
(a) free market economy
(b) Mixed economy
(c) Controlled market economy
(d) None of the above
Answer: A
Question. The problem of ‘ for whom to produce’ deals with
(a) Share of different people in total output of goods and services
(b) How to distribute and share the
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Identify the correct statement-
(a) In capitalist economy, people are not free to spend their income as they like
(b) In socialist economy right to work is guaranteed but the choice of occupation gets restricted.
(c) In Socialist economy, a relative inequality in income is an important feature
(d) In Socialist economy, people are not allowed to choose between available range of choice
Answer: B
Question. In a free market economy the allocation of resources is determined by –
(a) Votes taken by consumers
(b) A central planning authority
(c) Consumer preference
(d) The level of profits of firms
Answer: C
Question. Which of the following is not a micro economic subject matter?
(a) The price of mangoes
(b) The cost of producing a fire truck for the fire department of Delhi, India.
(c) The quantity of mangoes produced for the mangoes market.
(d) The national economy’s annual rate of growth.
Answer: D
Question. A capitalist economy uses _____ as the principal means of allocating resources.
(a) Demand
(b) Supply
(c) Efficiency
(d) Prices
Answer: D
Question. …… determines which goods and services will be produced and in what quantity
(a) Buyer
(b) Seller
(c) Government
(d) All of the above
Answer: A
Question. The Central Economic problem is that of-
(a) Allocating the scarce recourse in such a manner that society’s unlimited wants are satisfied as far as possible
(b) Giving jobs to poor and backward.
(c) Guaranteeing that the production occurs in most efficient manner
(d) All of above
Answer: A
Question. Freedom of choice is the advantage of …………….
(a) Socialism
(b) Capitalism
(c) Mixed economy
Answer: B
Question. In deciding ‘what to produce’ economy should consider production of
(a) Capital Goods
(b) Consumer goods
(c) Both (a) and (b)
(d) Neither (a) not (b)
Answer: C
Question. Which of the following is the cause of central economic problem?
(a) Scarcity of recourses
(b) Unlimited wants
(c) Alternative use
(d) All of the above
Answer: D
Question. In Mixed economy, private sector-
(a) Are absolutely free to make any type of decisions
(b) Works only for social objectives
(c) Are regulated directly and / or indirectly by government
(d) Does not exists at all
Answer: C
Question. National income is more often evenly distributed in-
(a) Mixed economy
(b) Command economy
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: B
Question. State which of the following statement is false
(a) In a mixed economy, the aim is to develop a system which tries to include the best features of both market economy while excluding the demerits of both
(b) Mixed economy does not exist in real world
(c) In Mixed economy, the state imposes necessary measures to control and to regulate the private sector to ensure that they function in accordance with the welfare objectives of the nation
(d) In Mixed economy,it is very difficult to maintain a proper balance between the public and private sectors.
Answer: B
Question. Which of the following is not a feature of capitalist economy-
(a) Right to private property
(b) Profit motive
(c) Freedom of enterprise
(d) Equal distribution of income
Answer: D
Question. Which of the following is not one of the four central questions that the study of economics is supposed to answer?
(a) Who produces what?
(b) When are goods produced?
(c) How are goods produced?
Answer: B
Question. Under …………the resources are of a central planning authority and therefore, market forces have no role in the allocation of resources
(a) Free market economy.
(b) Socialist economy.
(c) Mixed economy.
(d) Traditional economy.
Answer: B
Question. Which of the following not the feature of socialist economy-
(a) Collective ownership
(b) Profit Motive
(c) Absence of economic choice
(d) Relatively equal income distribution
Answer: B
Question. Capitalist economy uses……… to solve economic problem
(a) impersonal forces of market demand and supply.
(b) price mechanism.
(c) external reports
(d) economic theories.
Answer: A
Question. The concept of “competition” in a capitalist economy refers to-
(a) Competition among sellers to sell
(b) Competition among buyers to obtain the goods to satisfy their wants
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Socialist economy is characterised by-
(a) Selective production of goods
(b) Relative equality of income
(c) Secondary role of price mechanism
(d) All of the above
Answer: D
Question. An economic system in which all means of production are owned and controlled by private individuals for profit is called as…………… economy
(a) Capital
(b) Social
(c) Mixed
(d) None of the above
Answer: A
Question. Central Problems arises in case of-
(a) Capitalist Economy
(b) Socialist Economy
(c) Mixed Economy
(d) All of the above
Answer: D
Question. Which of the following applies to socialist economy-
(a) Balance between social objective and economic activity
(b) Private ownership of all recourses and factor of productions
(c) Total absence of government regulation
(d) Market mechanism to solve central economic problem
Answer: A
Question. The Problem of ‘What to Produce’ covers the issue relating to-
(a) What goods are to be produced?
(b) What quantities of goods are to be produced?
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. In Mixed economy there are ….. sectors of industries
(a) One
(b) Two
(c) Three
(d) Four
Answer: C
Question. The concept of socialist economy was propounded by…….
(a) Karl Marx and Frederic Engels.
(b) Marshall
(c) J.B Say
(d) Joel Dean
Answer: A
Question. In the context of capitalist economy, which of the following statement if false-
(a) Private property is the mainstay of capitalism
(b) Profit is the driving force in capitalist economy
(c) Decision of customers and businesses determines economic activity.
(d) All of above
Answer: D
Question. If there is adequate recourse in an economy, then there is no economy problem at all. This statement is-
(a) False
(b) True
(d) Cannot be commented at all
Answer: A
Question. Under Socialist economy………… takes decision for allocation of recourses
(a) Central planned authority
(b) Seller
(c) Buyer
(d) Foreign diplomats
Answer: A
Question. In Mixed economies, the answer to fundamental question- what, hoe and for whom to produce are obtained by-
(a) Market force of demand and supply
(b) Government regulations.
(c) Cost benefit analysis.
(d) All of the above
Answer: C
Question. …….. economic system depends on both markets and governments for allocation of recourses
(a) Mixed
(b) Socialist
(c) Traditional
(d) Free market
Answer: B
Question. State which of the following statement is not true
(a) If the recourses were unlimited, people would be able to satisfy their wants.
(b) If recourse has only single use, then also economic problem would not arise.
(c) All countries, without exception, face problem of scarcity.
(d) Developed countries do not face Central Economic Problems
Answer: D
Question. Under command economy, all the decision from allocation of recourse to distribution of end product, is taken care by
(a) Producers
(b) Cartels
(c) Central planning authority
(d) Consumer forum,
Answer: C
Question. The term mixed economy denotes
(a) Co-existence of private and public sector in an economy
(b) Co-existence of consumer and producer’s goods industries in an economy
(c) Co-existence of urban and reral sectors in an economy
(d) Co-existence of Large and small industries in an economy
Answer: A
Question. Mixed economy contains the positive feature of-
(a) Capitalist economy
(b) Socialist economy
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Larger production of_____goods would lead to higher production in future.
(a) Consumer goods
(b) Capital goods
(c) Agricultural goods
(d) Public goods
Answer: B
Question. In mixed economy, industries are found in……
(a) Joint Sector
(b) Private sector
(c) Public sector
(d) All of the above
Answer: D
Question. Scarcity is a situation in which …………
(a) Wants exceed the resources available to satisfy them
(b) Something is being wasted
(c) People are poor
(d) None of the above
Answer: A
Question. In Socialist economy, the concept of consumer sovereignty is-
(a) Restricted
(b) Unrestricted
(c) Recognised.
(d) None of the above
Answer: A
Question. Autonomy and freedom is more in-
(a) Socialist economy
(b) Capitalist economy
(d) All of the above
Answer: B
Question. In India areas like atomic energy, defence, etc are in the hands of….
(a) Public sector
(b) Private sector
(c) Joint sector
(d) All of the above
Answer: C
Question. ……….. is the demerit of capitalist economy
(a) Low cost of production
(b) High regulation of government
(c) No incentive for hard work
(d) Inequality of income
Answer: D
Question. Indian economy is an example of………
(a) Mixed economy
(b) Socialist economy
(c) Capitalist economy
(d) None of the above
Answer: A
Question. A Mixed economy focuses on ensuring
(a) Productive efficiency of capitalism
(b) Distributive justice of Socialism
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C
Question. Inequalities of income refers to?
(a) All workers do not get equal wages
(b) Gap between rich and poor
(c) All companies do not earn same profit
(d) All of the above
Answer: B
Question. Price mechanism exists in-
(a) Mixed economy
(b) Socialist economy
(c) Laissez-faire economy
(d) Traditional economy
Answer: C
Question. In Mixed economy, industries in private sectors have…. as their bjective and driving force, while public sector have……..as their objective and driving force ?
(a) profit motive, community welfare
(b) community welfare, profit motive
(c) community welfare, own profit
(d) None of the above
Answer: A
Question. Pure form of socialist economy does not exist in present days
(a) False
(b) True
(c) Partially true
(d) Cannot be commented at all
Answer: B
Question. Socialist economy is also known as-
(a) Free market economy
(b) Mixed economy
(c) Traditional economy
(d) Command economy
Answer: D
Question. Freedom if choice is advantage of-
(a) Mixed economy.
(b) Controlled economy
(c) Capitalist economy
(d) None of the above
Answer: C