MCQs on Introduction to Microeconomics

Introduction to Microeconomics is one of the most important topics in economics. Microeconomics is mainly concerned with the behaviour of decision takers like individuals, households or firms within an economy. Here, the word ‘firm’ is used in a generic manner to refer to all kinds of business. The study of microeconomics is in direct contrast to the study of macroeconomics, which looks at the entire economy as a single unit and studies its features accordingly.

We have collated a list of multiple-choice questions on Introduction to Microeconomics below to help the students develop a deeper understanding of the topic.

1. Which of the following is one of the major causes of economic problems?
   1. One of the major causes of economic problems is unlimited human wants
   2. One of the major causes of economic problems is the alternative usage of resources
   3. One of the major causes of economic problems is the scarcity of economic resources
   4. All of the above

Answer: d

2. Which of the following statements about the production possibility curve is accurate?
   1. The main reason for the rightward shift of the production possibility curve is war
   2. The main reason for the rightward shift of the production possibility curve is migration
   3. The main reason for the rightward shift of the production possibility curve is skill development programmes
   4. The main reason for the rightward shift of the production possibility curve is natural disasters

Answer: c

3. Which of the following statements about the production possibility frontier is accurate?
   1. The production possibility frontier can be a straight line when there is a decrease in the production of both goods
   2. The production possibility frontier can be a straight line when more amount of both the goods can be produced
   3. The production possibility frontier can be a straight line when all the resources are equally efficient for the production of both the goods
   4. None of the above

Answer: c

4. Which of the following statements about the marginal cost is true?
   1. When there is an increase in the marginal cost, the production possibility curve is concave to the origin
   2. When there is an increase in the marginal cost, the production possibility curve is convex to the origin
   3. When there is an increase in the marginal cost, the production possibility curve is similar to the origin
   4. None of the above

Answer: a

5. Which of the following statements about the economy is correct?
   1. An economy is a system that helps in the production of goods and also enables people to earn a living
   2. An economy is a system that helps in the production of services and also enables people to earn a living
   3. Both a and b are correct
   4. Both a and b are incorrect

Answer: c

6. Which of the following statements reflect the correct situation related to the allocation of the resources?
   1. Allocation of the resources comes under the causes of economic problems
   2. Allocation of the resources comes under the causes of opportunity cost
   3. Allocation of the resources comes under the causes of central problems
   4. Allocation of the resources comes under the causes of marginal demand

Answer: c

7. Which of the following conclusions is true about the statement ‘Rich people should be taxed more’?
   1. The statement ‘rich people should be taxed more is an example of positive economic analysis
   2. The statement ‘rich people should be taxed more is an example of productive economic analysis
   3. The statement ‘rich people should be taxed more is an example of normative economic analysis
   4. The statement ‘rich people should be taxed more is an example of negative economic analysis

Answer: c

8. Which of the following statements reflects the actual relationship between the marginal opportunity cost and production possibility frontier?
   1. When the marginal opportunity cost remains constant, the production possibility frontier is a downward sloping straight line
   2. When the marginal opportunity cost remains constant, the production possibility frontier is an upward sloping straight line
   3. When the marginal opportunity cost remains constant, the production possibility frontier is a central sloping straight line
   4. There is no relation between the marginal opportunity cost and the production possibility frontier

Answer: a

9. Which of the following statements is the actual meaning of scarcity?
   1. The actual meaning of scarcity is that there is an increase in the resources
   2. The actual meaning of scarcity is that there is a shortage in the resources
   3. The actual meaning of scarcity is that there is no change in the resources
   4. None of the above

Answer: b

10. Which of the following statements about the production possibility curve is true?
    1. If a point falls inside the production possibility curve, it indicates that the resources are over utilised
    2. If a point falls inside the production possibility curve, it indicates that the resources are underutilised
    3. If a point falls inside the production possibility curve, it indicates that there is adequate employment in the economy
    4. If a point falls inside the production possibility curve, it indicates that there is inadequate employment in the economy

Answer: b

11. Which of the following is a sign of a free economy?
    1. The prices are regulated
    2. The prices are partly regulated
    3. The prices are determined with the help of the forces of demand and supply
    4. None of these

Answer: c

12. Which of the following is a part of microeconomics?
    1. Factor pricing
    2. National income
    3. Both a and b are correct
    4. Both a and b are incorrect

Answer: a

13. Which of the following is true, according to Robbins?
    1. Means are undefined
    2. Means are scarce
    3. Means are unlimited
    4. All of the above

Answer: b

14. In which economy do consumers and producers make choices based on market forces of supply and demand?
    1. Market economy
    2. Open economy
    3. Controlled economy
    4. Command economy

Answer: a

15. The branch of economics that deals with the allocation of resources is ______.
    1. Econometrics
    2. Macroeconomics
    3. Microeconomics
    4. None of the above

Answer: c

Also See:

• What Is Secondary Data Meaning and Sources
• Tabular Presentation of Data
• What Are the Sources of Data
• Precautions to Be Taken Before Using Secondary Data
• Diagrammatic Presentation of Data