What does the scientific method require?
Correct answer A. The scientist be objective
Topic / 16 questions
Application of Economics MCQs
Application of Economics MCQs test the basic tools economists use to think about the world, including the scientific method, positive and normative statements, the circular-flow diagram, factors of production and the production possibilities frontier. They help CSS, PMS and UGC NET candidates build strong foundations. Every question has an instant answer for quick checking.
- 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 statement about the circular-flow diagram is correct?
Correct answer C. The factors of production are owned by households
Which statement best describes economic models?
Correct answer A. Built with assumptions
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In which case is the simplifying assumption most reasonable?
Correct answer C. To model the benefits of trade, an economist assumes that there are two people and two goods
Which of these sources is most likely to yield scientific evidence about an economic theory?
Correct answer D. An economist permanently employed at a leading university analysing the impact of bank regulations on lending to small businesses
Which of these is NOT a factor of production?
Correct answer D. Money
What can be said about points lying on the production possibilities frontier?
Correct answer C. Efficient
How is economic growth shown on a production possibilities diagram?
Correct answer A. A shift in the production possibilities frontier outward
In which of these statements is the economist behaving most like a scientist?
Correct answer D. A reduction in unemployment benefits will reduce the unemployment rate
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Two economists are debating unemployment policy. One says the government should tackle unemployment because it is the greatest social evil; the other insists that inflation is the greatest social evil. Why do they disagree?
Correct answer C. They disagree because they have different values
Which statement about microeconomics and macroeconomics is false?
Correct answer D. The study of very large industries is a topic within macroeconomics
Which of these would NOT move a country’s production possibilities frontier outward?
Correct answer C. A reduction in unemployment
Which one of these statements is normative?
Correct answer A. The unemployment rate should be lower
How are positive statements in economics best described?
Correct answer B. Statements of description that can be tested
Which of these issues falls within the field of microeconomics?
Correct answer C. The impact of oil prices on car production
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Two economists are debating unemployment policy. The first says the government could cut unemployment by one percentage point by raising government spending by 50 billion dollars. The second replies that an extra 50 billion dollars would cut unemployment by only one tenth of one percent, and only temporarily. Why do these economists disagree?
Correct answer A. They disagree because they have different scientific judgements
About Application of Economics MCQs
This introductory topic shows how economic reasoning works. Questions ask what the scientific method requires, how microeconomics differs from macroeconomics, and whether a statement about unemployment policy is positive, meaning testable, or normative, meaning a value judgement. You will interpret the circular-flow diagram linking households and firms, identify land, labour, capital and entrepreneurship as factors of production, and explain why points on the production possibilities frontier represent efficient output. These ideas reappear in every later economics chapter, so it is worth mastering them early.
Exams that include Application of Economics MCQs
Pakistan
- CSS
- PMS
- Lecturer tests
- NTS
India
- UGC NET
- CUET
- UPSC CSE
Bangladesh
- BCS
- University admission tests (DU, RU, JU)
Frequently asked questions
What is the difference between positive and normative statements?
A positive statement describes how the economy is and can be tested with evidence, such as a minimum wage raising unemployment among young workers. A normative statement says how things ought to be and depends on values, such as the government should raise the minimum wage.
What do points on the production possibilities frontier show?
Points on the production possibilities frontier show combinations of two goods that can be produced when all resources are used fully and efficiently. Points inside the curve indicate unemployment or waste, while points outside are unattainable with current resources and technology.
How many Application of Economics MCQs are on MCQs360?
There are 16 Application of Economics MCQs on MCQs360, each with an instant answer and free with no sign-up. They are a good starting point before moving on to topics such as Comparative GDP and Long Term Economic Growth.
Last reviewed October 2026