( Best 300+ ) Micro Economics MCQ

by Mr. DJ

Micro Economics MCQ

Micro Economics MCQ Definition: Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

Micro Economics MCQ

51. ______is primarily done by observing or testing on real-life data or analysing the pattern of some specific events in order to identify the nature or the class of trend that specific phenomenon maintains.
A) Empirical research
B) Action research
C) Laboratory research
D) Exploratory research
Answer:A

52. _____ has distinguished between different types of societies on basis of economic system.
A) Joseph W. Eaton
B) Max Webber
C) Karl Marx
D) Alphons Silbermann
Answer:C

53. Mannheim defines ________as the sum of those methods by which a society tries to influence human behavior to maintain a given order.
A) Social control
B) Constitution
C) Policing
D) Democracy

Answer:A

54. Implicit costs are:
A) Equal to total fixed costs.
B) Comprised entirely of variable costs.
C) “Payments” for self-employed resources.
D) Always greater in the short run than in the long run.

Answer:C

55. Which would be an implicit cost for a firm? The cost:
A) Of worker wages and salaries for the firm.
B) Paid for leasing a building for the firm.
C) Paid for production supplies for the firm.
D) Of wages foregone by the owner of the firm.

Answer:D

56. If a firm’s revenues just cover all its opportunity costs, then:
A) Normal profit is zero.
B) Economic profit is zero.
C) Total revenues equal its explicit costs.
D) Total revenues equal its implicit costs.

Answer:B

57. Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which is true?
A) The firm will earn accounting and economic profits.
B) The firm will face accounting and economic losses.
C) The firm will face an accounting loss, but earn economic profits.
D) The firm may earn accounting profits, but will face economic losses.

Answer:D

58. Suppose that a firm produces 200,000 units a year and sells them all for Rs.10 each. The explicit costs of production are Rs.1,500,000 and the  implicit costs of production are Rs. 300,000. The firm has an accounting profit of:
A) Rs. 500,000 and an economic profit of Rs. 200,000.
B) Rs. 400,000 and an economic profit of Rs. 200,000.
C) Rs. 300,000 and an economic profit of Rs. 400,000.
D) Rs. 200,000 and an economic profit of Rs. 500,000.

Answer:A

59. The short run is a time period in which:
A) All resources are fixed.
B) The level of output is fixed.
C) The size of the production plant is variable.
D) Some resources are fixed and others are variable.

Answer:D

60. The law of diminishing returns states that:
A) As a firm uses more of a variable resource, given the quantity of fixed
resources, the average product of the firm will increase.
B) As a firm uses more of a variable resource, given the quantity of fixed
resources, marginal product of the firm will eventually decrease.
C) In the short run, the average total costs of the firm will eventually
diminish.
D) In the long run, the average total costs of the firm will eventually
diminish.

Answer:B

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