Economics: Multiple Choice Questions with Answers


41. Under free exchange markets, the rate of foreign exchange is determined by –

A. Balance of Payments theory

B. Mint par theory

C. Purchasing power parity theory

D. None of the above

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Correct Answer is A

42. Which of the following is known as the long-run average cost curve?

A. Learning curve

B. Envelope curve

C. Equal product curve

D. Phillips curve

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Correct Answer is B

43. Which market structure symbolizes the existence of ‘few sellers’?

A. Oligopoly

B. Monopoly

C. Monopolistic competition

D. Perfect competition

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Correct Answer is A

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44. Which of the following is a characteristic of capital as a factor of production?

A. It never depreciates

B. It is fixed in supply

C. It is an active factor of production

D. It is a passive factor of production

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Correct Answer is D

45. On which law of consumption the concept of consumer’s surplus is based?

A. Engel’s law

B. Law of demand

C. The first law of Gossen

D. The second law of Gossen

Click for Answer/Explanation

Correct Answer is C

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