A profit-maximising firm aims to make the gap between which two amounts as large as possible?
Correct answer C. Total revenue and total cost
Subject / 2,616 questions
Economics MCQs
Economics MCQs are multiple-choice questions on how people, firms and governments use scarce resources, covering demand and supply, market structures, national income, money, inflation, trade and development. They support students and candidates for civil service, lecturer and banking tests. Each question on MCQs360 reveals its answer instantly, helping you confirm concepts as you practise.
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
Which of these costs is most likely to vary with a firm’s output?
Correct answer C. The payroll taxes that are paid on employee wages
In the sense economists use it, what characterises the short run?
Correct answer D. At least one fixed factor of production and firms neither leaving nor entering the industry
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Which statement about average product (AP) and marginal product (MP) is correct?
Correct answer A. If AP exceeds MP, then AP is falling
Engineers at the All-Terrain Bike Company find that raising all inputs by 15% raises output by 15%. If input prices stay constant, what happens as output increases?
Correct answer B. Average costs remain constant
According to most empirical studies, what shape do firms’ cost curves take?
Correct answer C. Slope down to the right and then level off
What term describes the rate at which a firm can replace labour with capital while keeping output unchanged?
Correct answer B. Marginal rate of factor substitution
Which formula gives average fixed cost?
Correct answer A. TFC/q
Which definition of marginal revenue is correct?
Correct answer D. The added revenue that a firm takes in when it increases output by one additional unit
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Which pair of curves can be used on a diagram to show the size of maximum profit?
Correct answer B. The AC and AR curves
As the manager of a firm in a perfectly competitive industry, what decisions would occupy most of your time?
Correct answer C. How much of each input to use
How does the number of available substitutes affect a monopolist’s power to raise its price?
Correct answer C. More; less
Compared with a competitively organised industry, what does a monopoly do?
Correct answer C. Produces less output, charges higher prices and earns economic profits
How do economists characterise the short run?
Correct answer D. At least one fixed factor of production and firms neither leaving nor entering the industry
Which statement correctly describes the long run in economics?
Correct answer B. There are no fixed factors of production
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The ABC Typing Service earns a rate of return above what it needs to keep operating. What does this tell us?
Correct answer C. The firm is earning economic profit
For firms that carry relatively little risk, how does the normal rate of profit compare with the interest rate on risk-free government bonds?
Correct answer A. Approximately equal to
How does marginal revenue compare with price for a monopolist?
Correct answer C. Lower than price for all units other than the first
What name is given to an industry whose economies of scale are so large that a single producer can supply the whole market most efficiently?
Correct answer D. A natural monopoly
Members of the EU find that trade creation is encouraged when their economies are in what condition?
Correct answer A. Highly competitive
About Economics MCQs
Economics studies choices made under scarcity. Microeconomics looks at individual consumers and firms: utility, costs, production, and how prices are set under perfect competition, monopoly and oligopoly. Macroeconomics looks at the whole economy: GDP, unemployment, inflation, interest rates and the balance of payments. Many questions test the link between the two, such as how average and marginal product relate or why the CPI and GDP deflator can move differently.
This collection spans more than forty subtopics. Key areas include market structures and theories of the firm, public goods and asymmetric information, monetary and fiscal policy, aggregate supply and inflation, and economic growth. Development economics covers poverty, human capital, population theories such as Malthus's, and features of developing countries. International topics include trade barriers, regional trading arrangements and monetary union, with a dedicated set on Pakistan's agriculture and irrigation system.
Economics is an optional subject in CSS and PMS, a core subject in lecturer and subject specialist tests, and a regular part of banking and finance recruitment. Indian candidates meet it in UPSC, UGC NET and banking exams, while BCS includes economic questions in Bangladesh. Because many questions turn on precise definitions and graphs, steady MCQ practice sharpens both understanding and speed.
Key facts to remember
- GDP measures the market value of all final goods and services produced within a country.
- A public good is non-rival and non-excludable, like national defence or street lighting.
- Under perfect competition, firms are price takers and maximise profit where price equals marginal cost.
- Malthus argued that population grows geometrically while food supply grows only arithmetically.
- When marginal product is above average product, average product is rising.
- Fiscal policy uses taxation and government spending, while monetary policy uses money supply and interest rates.
- Inflation is a sustained rise in the general price level of an economy.
- An oligopoly is a market dominated by a small number of large sellers.
Exams that include Economics MCQs
Pakistan
- CSS
- PMS
- PPSC
- FPSC
- Lecturer tests
- Banking job tests
India
- UPSC CSE
- UGC NET
- IBPS PO
- SBI PO
- State PSC exams
Bangladesh
- BCS
- Bangladesh Bank recruitment
- Bank job exams
- Government job tests
How to prepare for Economics MCQs
- Draw the cost and revenue curves for each market structure yourself, since many questions test where marginal cost meets marginal revenue.
- Make a comparison sheet of perfect competition, monopoly, monopolistic competition and oligopoly covering number of firms, entry barriers and pricing power.
- Learn the exact definitions of national income measures such as GDP, GNP and the GDP deflator, because options often differ by one word.
- Link each economist to his main theory, for example Malthus to population and Keynes to aggregate demand, to answer theory questions quickly.
- For Pakistan-specific papers, revise the agriculture, irrigation and development subtopics, which combine economic theory with local context.
Frequently asked questions
What are the most important topics in Economics MCQs?
The core topics are demand and supply, costs and production, market structures, national income, money and banking, inflation and unemployment, and international trade. Development topics such as poverty, population and human capital are also common, especially in civil service papers. Questions on public goods and fiscal and monetary policy appear frequently too.
Which exams ask Economics MCQs?
Economics MCQs appear in CSS and PMS optional papers, PPSC and FPSC lecturer tests and banking job tests in Pakistan. In India they feature in UPSC, UGC NET and bank PO exams. In Bangladesh, BCS and Bangladesh Bank recruitment tests include economics questions on both theory and policy.
How many Economics MCQs are on MCQs360?
MCQs360 has more than 2,600 Economics MCQs across over forty subtopics, including microeconomics, macroeconomics, development and trade. Each question shows its answer instantly, and the practice is free with no sign-up required, so you can revise one chapter at a time or mix topics for exam-style sets.
How should I prepare for Economics MCQs?
Start by understanding key definitions and diagrams in micro and macroeconomics, then practise MCQs one subtopic at a time. Pay close attention to wording, since options often differ subtly. Review your mistakes weekly and finish with mixed practice sets that combine theory, policy and development questions.
What is the difference between microeconomics and macroeconomics?
Microeconomics studies individual units such as consumers, households and firms, and how they make choices about prices, output and resources. Macroeconomics studies the economy as a whole, including GDP, inflation, unemployment and economic growth. For example, the price of wheat is a micro question, while the national inflation rate is a macro one.
What is a public good?
A public good is non-excludable, meaning people cannot easily be prevented from using it, and non-rival, meaning one person's use does not reduce what is left for others. National defence and street lighting are common examples. Because people can benefit without paying, markets tend to under-supply public goods, so governments usually provide them.
Last reviewed October 2026