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: Trade-off refers to
A) Avoiding decisions
B) Getting everything desired
C) Sacrificing one thing to gain another
D) Increasing demand
✅ Correct Answer: C
Explanation: Trade-offs arise because resources are limited, requiring choices between alternatives.
Q: Price elasticity of supply measures
A) Speed of inflation
B) Tax impact
C) Responsiveness of quantity supplied to price change
D) Government spending
✅ Correct Answer: C
Explanation: It indicates how much the quantity supplied changes with a change in price.
Q: In a mixed economy, resources are allocated by
A) Custom and tradition
B) Government only
C) Market and government
D) Private individuals only
✅ Correct Answer: C
Explanation: Mixed economies use both market mechanisms and government policies for resource allocation.
Q: GDP per capita measures
A) Total exports
B) Income per worker
C) Average income per person
D) Foreign investment
✅ Correct Answer: C
Explanation: It is calculated by dividing total GDP by the population, indicating average living standards.
Q: Real income adjusts for
A) Savings
B) Tax rates
C) Inflation
D) Interest
✅ Correct Answer: C
Explanation: Real income accounts for inflation, showing the purchasing power of nominal income.