MCQ on Economics:  

• Economics is the social science that describes the factors that determine the production, distribution, and consumption of goods and services.
• Economic activities in the production, exchange, distribution, consumption, and activities closely related to it under the premise of certain economic relations. 
• In economic activities, there is a problem of obtaining greater benefits with less consumption. 
• Economic relations are the mutual relations formed by people in economic activities. Among all kinds of economic relations, production relations are the dominant ones.
• There are two types of economics studied macroeconomics and microeconomics which are not diametrically opposed or different. 
• Macroeconomics is the subtype of economics that deals with the study of the behavior and performance of an economy as a whole.
• Microeconomics is the subtype of economics deals with the study of individuals, households, and firms’ behavior in decision making and allocation of resources.
• The mother of all economic problems is scarcity. Scarcity refers to the limited availability of a resource in comparison to limitless wants.

MCQ on Economics for UPSC / Class 12 : 

1. What is economics?

(1) Economics is a study of the usage of resources and how we can make those resources valuable under distinct captivity.

(2) Economics is a study of Ecology and Nomenclature. 

(3) Economics is “the social science that studies the production, distribution, and consumption of goods and services.”

(4) Both (1) and (3) 

Answer: 4

2. Who is known as the father of economics?

(1) Adam Smith

(2) Paul Krugman

(3) David Ricardo

(4) John Maynard Keynes

Answer: 1

3. Who is the Mother Teresa of economics?

(1) Amartya Sen 

(2) Paul Krugman

(3) David Ricardo

(4) Abhijit Banerjee

Answer: 1

4. Who is the ‘Father of Indian Economic Planning’?

(1) Sir M. Vishweshwaraiah.

(2) Dr. B.R Ambedkar 

(3) Amartya Sen.

(4) Abhijit Banerjee.

Answer: 1

5. Who is the father of capitalism?

(1) Adam Smith

(2) Paul Krugman

(3) David Ricardo

(4) John Maynard Keynes

Answer: 1

6. Who is the “Father of Indian Economic Reforms”.

(1) Narasimha Rao

(2) Dr. B.R Ambedkar 

(3) Amartya Sen.

(4) Abhijit Banerjee.

Answer: 10

7. Who is considered the founder of Microeconomics?

(1) Adam Smith

(2) John Keynes

(3) Friedrich Hayek

(4) Milton Friedman

Answer: 1

8. Who is considered the founder of modern Macroeconomics?

(1) Adam Smith

(2) John Keynes

(3) Friedrich Hayek

(4) Milton Friedman

Answer: B

9. What is an economic activity: 

(1) Production

(2) consumption 

(3) capital formation

(4) All of these 

Answer: 4

10. Who is the father of mixed economy?

(1) Adam Smith

(2) Paul Krugman

(3) David Ricardo

(4) John Maynard Keynes

Answer: 1

11. What is Adam Smith’s main idea?

(1) wealth is created through productive labor.

(2)  wealth is created through money

(3) wealth is created through the product idea.

(4) None of these 

Answer: 1

12. What are the 3 natural laws?

(1) The Law of Self Interest

(2) The Law of Competition

(3) The Law of Supply and Demand

(4) All of these 

Answer: 4

13. An increase in supply _____ the price and _____ the quantity demanded.

(1) lowers, raises

(2) raises, lowers

(3) lowers, lowers

(4) raises, raises

Answer: 1

14. Macroeconomics is also called the_______

(1) Theory of money

(2) Theory of national income

(3) Theory of income

(4) Theory of inflation

Answer: 3

15. In a monopolistic competition, a business obtains its maximum-profit position where

(1) MR > MC

(2) MR < MC

(3) MR = MC

(4) MR + MC = 1

Answer: C

16. MRP’ means:

(1) Middle rest period

(2) Maximum retail price

(3) Minimum retail price

(4) Material retail price

Answer: 2

17. Which of the following best represents the concept of Net Domestic Product (NDP)?

(1) GDP – Income from abroad

(2) GDP + Income from abroad

(3) GNP – Depreciation

(4) GDP – Depreciation

Answer: 4

18. The concept of Five Year Plans in India was introduced by__________

(1) Lord Mountbatten

(2) Jawaharlal Nehru

(3) Indira Gandhi

(4) Lal Bahadur Shastri

Answer: 2

19. The branch of economics concerned with the use of statistical methods to obtain empirical results for economic relations is known as_________

(1) Microeconomics

(2) Macroeconomics

(3) Econometrics

(4) Keynesian Economics

Answer: C

20. What is demonetization?

(1) It involves introducing a new currency in the economy.

(2) It involves reducing the official value of a currency with other currencies.

(3) It involves stripping a currency unit of its status as legal tender.

(4) It involves increasing the official value of a currency with other currencies.

Answer: 3

21. The branch of economics concerned with the behavior of markets, firms, and households is known as_____

(1) Microeconomics

(2) Macroeconomics

(3) Econometrics

(4) Bayesian Economics

Answer: 1

22. What is the name of the book written by J.M. Keynes?

(1) Wealth of Nation

(2) Political economy

(3) The General Theory of Employment, Interest, and Money

(4) None of these

Answer: C

23. The mother of all economic problems is —–

(1) scarcity

(2) Economic Activities 

(3) Price

(4) Resource 

Answer: 1

24. The supply of a good refers to

(1) Stock available for sale

(2) Total stock in the warehouse

(3) Actual production of the good

(4) Quantity of the good offered for sale at a particular price per unit of time

Answer: 4

25. Which of the following is defined by the law of demand__________

(a) The law of demand states, with the increase in price there is a decrease in quantity demanded

(b) The law of demand states, with an increase in price there is an increase in quantity demanded

(c) The law of demand states, with an increase in price there is  decreased demand

(d) The law of demand states, with an increase in price there is increased demand

Answer: 1

26. The capital that is consumed by an economy or a firm in the production process is known as_________

(1) Capital loss

(2) Production cost

(3) Dead-weight loss

(4) Depreciation

Answer: 4

27. The Demand of a commodity refers to____________

(1) Desire for the commodity

(2) Need for the commodity

(3) Quantity demanded of that commodity

(4) Quantity that consumers are able and willing to buy at various prices during any particular period of time

Answer: 4

28. Which of the following statements is true?

(1) Microeconomics is concerned chiefly with the economy as a whole.

(2) Macroeconomics is concerned chiefly with individual markets.

(3) Governments have no influence over market prices.

(4) When economists study the price in a market, their chief aims are to understand why the price is what it is and why it may change.

Answer: 4

29. What would be shown on a graph that illustrated the effects?

(1) An excess demand at the initial equilibrium price.

(2) An excess demand at the new equilibrium price.

(3) An excess supply at the initial equilibrium price.

(4) An excess supply at the new equilibrium price.

Answer: 1

30. Which of the following statements is false?

(1) An economic model is a theory based on key variables and expressed in formal terms.

(2) An economic model is tested by seeing how accurate its predictions are.

(3) Testing economic models are rarely tricky.

(4) The words ‘Ceteris Paribus mean other things remaining the same.

Answer: C