Economics MCQs
Economics MCQs for CSS, PMS, and competitive exams covering microeconomics, macroeconomics, market structures, fiscal and monetary policy, development, and trade. Test conceptual clarity, analytical skills, and real-world application of economic principles.
Q: The basic problem of economics is related to
A) Inflation
B) Scarcity
C) Monopoly
D) Efficiency
✅ Correct Answer: B
Explanation: Scarcity forces societies to make choices about resource allocation due to limited availability and unlimited wants.
Q: Resources used in the production of goods and services are collectively known as
A) Capital
B) Inputs
C) Factors of production
D) Utilities
✅ Correct Answer: C
Explanation: Factors of production include land, labor, capital, and entrepreneurship, which are essential for producing goods and services.
Q: Marginal cost refers to
A) Total cost
B) Additional cost of producing one more unit
C) Fixed cost
D) Average cost
✅ Correct Answer: B
Explanation: Marginal cost is the increase in total cost when one more unit of output is produced.
Q: A perfectly competitive market features
A) Single seller
B) Price maker
C) Product differentiation
D) Large number of buyers and sellers
✅ Correct Answer: D
Explanation: Perfect competition exists when many buyers and sellers trade identical products without any market control.
Q: GDP stands for
A) General Development Policy
B) Gross Domestic Product
C) Government Development Plan
D) Global Demand Projection
✅ Correct Answer: B
Explanation: Gross Domestic Product represents the total market value of all final goods and services produced in a country.