Economics Practice MCQ Page 3

Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 1106   If fish and milk cost$3 and $2 respectively and the income of the Catt family in table1 increases to$15 ten it should consume
  1. 1fish and 6 gallons of milk
  2. 5 fish and no milk
  3. 2 fish and 4 gallons of milk
  4. 3 fish and 3 gallons of milk
  5. An amount that cannot be determined from table1
Question: 1107   With the income of the Catt family in table 1 held constant at$15 and the price of fish at $3, suppose that the price of milk rises to $3 per gallon. The combination of milk and fish that maximizes utility is now
  1. 3 fish and 2 gallon of milk
  2. 2 fish and 3gallon of milk
  3. 1 fish and 4 gallon of milk
Question: 1110   The total benefit enjoyed by consumers in figure 4 from consuming 50 watermelons is the area abc ($250).
  1. The area abc ($250).
  2. The area b0gc ($500)
  3. The area a0gc ($750)
  4. The distance 0a ($20)
  5. The distance 0b ($10)
Question: 1112   The total cost to consumers in figure 4of eating 50 watermelons is
  1. The area abc ($250)
  2. The area b0gc ($500)
  3. The area b0gc ($500)
  4. The area b0gc ($500)
  5. The distance 0b ($ 10)
Question: 1113   The consumer surplus of all consumers in figure 4 from 50 watermelons is.
  1. The area abc ($250)
  2. The area b0gc ($500)
  3. The area b0gc ($500)
  4. The distance 0a ($20)
  5. The distance 0b ($10)
Question: 1115   The value of the 50th watermelon to consumers in figure 4 is
  1. The area abc ($250)
  2. The area b0gc ($500)
  3. The area aogc ($750)
  4. The distance 0a ($20)
  5. The distance 0b ($10)
Question: 1116   Which of the following is not a direct result of the law of diminishing marginal utility?
  1. Season tickets often cost less per event than single tickets
  2. Stores often offer buy one get one free rather than half price sales
  3. Many companies offer volume discounts
  4. Few people eat five or more hamburgers in the same day.
Question: 1119   When the price of a good rises, the income effect is most likely to
  1. Increase consumption of the good and other similar goods
  2. Decrease consumption of the good and other similar goods
  3. Decrease consumption of the good and not change consumption of other similar goods
  4. Decrease consumption of t he good and increase consumption of other similar goods.
  5. Not change consumption of any goods.
Question: 1120   When the price of good rises, the substitution effect is most likely to
  1. Increase consumption of the good and other similar goods
  2. Decease consumption of the good and other similar goods
  3. Decrease consumption of the goods and not change consumption of other similar goods.
  4. Decrease consumption of the goods and not change consumption of other similar goods.
  5. Not change consumption of any goods.
Question: 1122   For which of the following goods would an increase in price lead to the largest income effect on quantity demanded?
  1. Housing
  2. Soft drinks
  3. Refrigerators
  4. Gasoline
  5. Fruit
Question: 1124   If a household in consumer equilibrium spends $40 per month on beef and $20 per month on pork, then
  1. Beef is more expensive than pork
  2. Beef gives more total utility than pork
  3. The last pound of beef yields the same marginal utility as the last pound of pork
  4. The last dollar spent on beef yields the same marginal utility as the last dollar spent on pork
  5. Beef has a higher marginal utility than pork
Question: 1125   If the marginal utility of a commodity wear negative then
  1. Less of it would be preferred to more
  2. The household would only consume it if it were free
  3. The household should buy more of it to make its marginal utility positive
  4. The law of diminishing marginal utility would be violated.The household’s consumer surplus must be large

Answers to the questions of Economics on this page

Following list gives the correct choice for the answer of the Economics mcqs.
1106 . D       1107 . A       1110 . C       1112 . B       1113 . A       1115 . E       1116 . C       1119 . B       1120 . D       1122 . A       1124 . D       1125 . A      

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