30 multiple-choice questions with answers covering the Introductory concepts of Microeconomics, suitable for Class 12 students:
INTRODUCTORY MICRO ECONOMICS
I. Introduction
Which of the following best defines economics?
a) The study of government policies.
b) The study of how societies manage their scarce resources.
c) The study of money and banking.
d) The study of international trade.
Answer: b)
Microeconomics primarily focuses on:
a) The behavior of the economy as a whole.
b) The decisions of individual consumers and firms.
c) Government budget and fiscal policy.
d) Inflation and unemployment rates.
Answer: b)
The scope of economics includes:
a) Production and consumption only.
b) Distribution and exchange only.
c) Production, consumption, distribution, and exchange.
d) Government regulation of industries.
Answer: c)
The subject matter of economics revolves around:
a) Unlimited wants and abundant resources.
b) Limited wants and abundant resources.
c) Unlimited wants and scarce resources.
d) Limited wants and scarce resources.
Answer: c)
An economy is best described as:
a) A collection of wealthy individuals.
b) A system where people earn and spend money.
c) A system that organizes production, distribution, and consumption of goods and services.
d) A set of government institutions.
Answer: c)
The central problems of an economy arise due to:
a) Technological advancements.
b) Government intervention.
c) Scarcity of resources.
d) Abundance of goods.
Answer: c)
The question "What to produce?" in an economy is related to:
a) How goods and services should be produced.
b) The distribution of income among individuals.
c) The types and quantities of goods and services to be produced.
d) The efficiency of resource allocation.
Answer: c)
The question "How to produce?" in an economy is related to:
a) The target consumers for the goods and services.
b) The techniques and methods of production.
c) The overall level of output in the economy.
d) The pricing of goods and services.
Answer: b)
The question "For whom to produce?" in an economy is related to:
a) The location of production units.
b) The determination of wages and salaries.
c) The distribution of goods and services among individuals.
d) The quality standards of the products.
Answer: c)
Scarcity in economics implies:
a) The absence of any resources.
b) Limited availability of resources compared to wants.
c) Wastage of available resources.
d) Unequal distribution of income.
Answer: b)
Choice in economics arises because of:
a) Availability of unlimited resources.
b) Existence of a single want.
c) Scarcity of resources and the need to satisfy multiple wants.
d) Government regulations on consumption.
Answer: c)
Human wants are generally considered to be:
a) Limited.
b) Easily satisfied.
c) Unlimited.
d) Equal to the available resources.
Answer: c)
Utility in economics refers to:
a) The usefulness of a commodity.
b) The satisfaction derived from consuming a commodity.
c) The price of a commodity.
d) The availability of a commodity.
Answer: b)
Which of the following is an example of a good in economics?
a) A service provided by a doctor.
b) The feeling of happiness.
c) A mobile phone.
d) The weather.
Answer: c)
Goods that are tangible and can be seen and touched are called:
a) Services.
b) Intangible goods.
c) Material goods.
d) Abstract goods.
Answer: c)
Services are characterized by being:
a) Tangible and storable.
b) Intangible and non-storable.
c) Tangible and non-storable.
d) Intangible and storable.
Answer: b)
Value in economics can be defined as:
a) The physical quantity of a good.
b) The monetary worth of a good or service.
c) The utility derived from a good.
d) The cost of producing a good.
Answer: b)
Price is generally expressed in terms of:
a) Utility.
b) Satisfaction.
c) Money.
d) Value.
Answer: c)
Price is a mechanism that helps in:
a) Creating unlimited resources.
b) Eliminating scarcity.
c) Allocating scarce resources.
d) Increasing human wants.
Answer: c)
Wealth in economics refers to:
a) The total amount of money in a country.
b) The stock of assets that have economic value.
c) The natural resources available in a country.
d) The happiness and well-being of the people.
Answer: b)
Which of the following is NOT considered wealth in economics?
a) Gold and silver.
b) Machinery and equipment.
c) Human skills and knowledge.
d) Clean air and sunshine (without ownership).
Answer: d)
The fundamental economic problem is:
a) Unemployment.
b) Inflation.
c) Scarcity.
d) Poverty.
Answer: c)
Opportunity cost is:
a) The cost of producing a good.
b) The next best alternative forgone when making a choice.
c) The total expenditure incurred.
d) The price paid for a good.
Answer: b)
Positive economics deals with:
a) Value judgments and opinions.
b) What ought to be.
c) Facts and cause-and-effect relationships.
d) Ethical considerations in economic decisions.
Answer: c)
Normative economics deals with:
a) Objective analysis of economic data.
b) What is actually happening in the economy.
c) Subjective opinions and what the economy should be like.
d) The formulation of economic laws.
Answer: c)
Which of the following is a normative statement?
a) The unemployment rate is 5%.
b) Government spending has increased by 10%.
c) The government should increase taxes to reduce inequality.
d) Inflation is currently at 3%.
Answer: c)
A centrally planned economy primarily solves its central problems through:
a) Price mechanism and market forces.
b) Government planning and control.
c) Consumer preferences and demand.
d) The interaction of supply and demand.
Answer: b)
A market economy primarily solves its central problems through:
a) Centralized decision-making.
b) Government regulations.
c) The forces of supply and demand.
d) Traditional customs and practices.
Answer: c)
A mixed economy combines elements of:
a) Only capitalism and socialism.
b) Only market and tradition.
c) Capitalism and socialism with government intervention.
d) Only tradition and government control.
Answer: c)
The basic concepts of wants, utility, goods, value, price, and wealth are fundamental to understanding:
a) Macroeconomic policies.
b) The behavior of individual economic units.
c) International trade agreements.
d) Government budget formulation.
Answer: b)
