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: A public good is
A) Sold in public sector
B) Free for poor
C) Always free
D) Non-excludable and non-rival
✅ Correct Answer: D
Explanation: Public goods are available to all without competition for consumption.
Q: Perfect competition results in
A) Free entry
B) Price wars
C) Many sellers and identical products
D) One seller and unique product
✅ Correct Answer: C
Explanation: Perfect competition assumes many sellers producing identical goods.
Q: Monopoly leads to
A) Price wars
B) Many buyers and sellers
C) Free entry
D) Single seller domination
✅ Correct Answer: D
Explanation: A monopoly exists when one seller controls the entire market.
Q: Law of diminishing returns applies when
A) Inputs increase beyond optimal
B) Costs decrease
C) Profits rise
D) Wages increase
✅ Correct Answer: A
Explanation: After a point, additional input yields lower per-unit output.
Q: Division of labor enhances
A) Efficiency
B) Errors
C) Monotony
D) Costs
✅ Correct Answer: A
Explanation: Specialization increases productivity and efficiency.