JAIBP Stage 2 – Economics: 200 Important MCQs
1. 1. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
2. 2. Who defined economics as the study of human behavior in relation to ends and scarce
means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
3. 3. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
4. 4. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
5. 5. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
6. 6. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
7. 7. If the government hires more police at the expense of fewer teachers, this trade-off is
an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
8. 8. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
9. 9. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
10. 10. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
11. 11. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
12. 12. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
13. 13. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
14. 14. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
15. 15. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
16. 16. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
17. 17. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
18. 18. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
19. 19. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
20. 20. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
21. 21. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
22. 22. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
23. 23. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
24. 24. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
25. 25. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
26. 26. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
27. 27. If the government hires more police at the expense of fewer teachers, this trade-off
is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
28. 28. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
29. 29. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
30. 30. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
31. 31. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
32. 32. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
33. 33. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
34. 34. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
35. 35. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
36. 36. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
37. 37. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
38. 38. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
39. 39. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
40. 40. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
41. 41. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
42. 42. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
43. 43. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
44. 44. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
45. 45. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
46. 46. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
47. 47. If the government hires more police at the expense of fewer teachers, this trade-off
is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
48. 48. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
49. 49. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
50. 50. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
51. 51. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
52. 52. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
53. 53. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
54. 54. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
55. 55. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
56. 56. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
57. 57. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
58. 58. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
59. 59. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
60. 60. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
61. 61. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
62. 62. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
63. 63. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
64. 64. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
65. 65. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
66. 66. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
67. 67. If the government hires more police at the expense of fewer teachers, this trade-off
is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
68. 68. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
69. 69. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
70. 70. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
71. 71. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
72. 72. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
73. 73. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
74. 74. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
75. 75. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
76. 76. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
77. 77. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
78. 78. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
79. 79. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
80. 80. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
81. 81. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
82. 82. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
83. 83. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
84. 84. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
85. 85. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
86. 86. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
87. 87. If the government hires more police at the expense of fewer teachers, this trade-off
is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
88. 88. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
89. 89. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
90. 90. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
91. 91. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
92. 92. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
93. 93. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
94. 94. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
95. 95. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
96. 96. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
97. 97. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
98. 98. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
99. 99. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
100. 100. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
101. 101. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
102. 102. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
103. 103. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
104. 104. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
105. 105. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
106. 106. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
107. 107. If the government hires more police at the expense of fewer teachers, this
trade-off is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
108. 108. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
109. 109. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
110. 110. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
111. 111. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
112. 112. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
113. 113. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
114. 114. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
115. 115. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
116. 116. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
117. 117. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
118. 118. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
119. 119. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
120. 120. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
121. 121. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
122. 122. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
123. 123. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
124. 124. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
125. 125. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
126. 126. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
127. 127. If the government hires more police at the expense of fewer teachers, this
trade-off is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
128. 128. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
129. 129. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
130. 130. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
131. 131. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
132. 132. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
133. 133. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
134. 134. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
135. 135. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
136. 136. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
137. 137. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
138. 138. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
139. 139. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
140. 140. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
141. 141. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
142. 142. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
143. 143. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
144. 144. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
145. 145. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
146. 146. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
147. 147. If the government hires more police at the expense of fewer teachers, this
trade-off is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
148. 148. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
149. 149. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
150. 150. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
151. 151. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
152. 152. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
153. 153. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
154. 154. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
155. 155. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
156. 156. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
157. 157. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
158. 158. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
159. 159. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
160. 160. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
161. 161. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
162. 162. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
163. 163. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
164. 164. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
165. 165. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
166. 166. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
167. 167. If the government hires more police at the expense of fewer teachers, this
trade-off is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
168. 168. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
169. 169. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
170. 170. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
171. 171. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
172. 172. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
173. 173. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
174. 174. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
175. 175. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
176. 176. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
177. 177. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
178. 178. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
179. 179. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
180. 180. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
181. 181. What is the core problem that economics seeks to address?
A. Inflation
B. Unemployment
C. Scarcity of resources ✅
D. Trade deficit
182. 182. Who defined economics as the study of human behavior in relation to ends and
scarce means with alternative uses?
A. Adam Smith
B. David Ricardo
C. Lord Robbins ✅
D. John Stuart Mill
183. 183. Which of the following is an example of a need rather than a want?
A. Foreign travel
B. Designer clothing
C. Shelter ✅
D. Luxury car
184. 184. Microeconomics is primarily concerned with:
A. National output
B. Inflation trends
C. Individual market behavior ✅
D. Unemployment rate
185. 185. The real cost of a decision in economics is known as:
A. Financial burden
B. Price paid
C. Opportunity cost ✅
D. Average cost
186. 186. Which of the following best describes a production possibility curve?
A. Shows income distribution
B. Represents demand vs. supply
C. Depicts maximum combinations of goods that can be produced ✅
D. Measures unemployment
187. 187. If the government hires more police at the expense of fewer teachers, this
trade-off is an example of:
A. Fiscal surplus
B. Economic growth
C. Opportunity cost ✅
D. Marginal utility
188. 188. The study of entire economic systems is known as:
A. Microeconomics
B. Macroeconomics ✅
C. Monetary theory
D. Industrial economics
189. 189. Which of the following is a feature of a mixed economy?
A. Only private enterprise
B. Only government control
C. Combination of market and government control ✅
D. No regulation
190. 190. Merit goods are provided by government because:
A. They are harmful
B. They are not needed
C. People underconsume them ✅
D. They have high price elasticity
191. 191. In economics, capital refers to:
A. Money
B. Loans
C. Man-made assets used in production ✅
D. Land
192. 192. Rent is the income earned from:
A. Labor
B. Capital
C. Land ✅
D. Enterprise
193. 193. Which of the following is NOT a factor of production?
A. Money ✅
B. Labor
C. Capital
D. Land
194. 194. Which industry is classified under primary industry?
A. Banking
B. Retail
C. Agriculture ✅
D. Manufacturing
195. 195. The entrepreneur earns income in the form of:
A. Interest
B. Rent
C. Wages
D. Profit ✅
196. 196. Diminishing returns set in when:
A. Output increases at an increasing rate
B. Output increases at a decreasing rate ✅
C. Cost falls with output
D. Profit becomes zero
197. 197. Which factor of production is considered the ‘risk taker’?
A. Labor
B. Enterprise ✅
C. Capital
D. Land
198. 198. Fixed capital includes:
A. Stocks
B. Cash
C. Buildings and machines ✅
D. Raw materials
199. 199. Marginal product refers to:
A. Cost of each worker
B. Increase in total product from one more unit of input ✅
C. Profit per item
D. Total revenue
200. 200. Sunk cost is defined as:
A. Variable cost
B. Fixed cost
C. Cost that cannot be recovered ✅
D. Future expenditure
