Students of class 12 Economics should refer to MCQ Questions Class 12 Economics Introduction to Micro Economics with answers provided here which is an important chapter in Class 12 Economics NCERT textbook. These MCQ for Class 12 Economics with Answers have been prepared based on the latest CBSE and NCERT syllabus and examination guidelines for Class 12 Economics. The following MCQs can help you to practice and get better marks in the upcoming class 12 Economics examination

Chapter 1 Introduction to Micro Economics MCQ with Answers Class 12 Economics

MCQ Questions Class 12 Economics Introduction to Micro Economics provided below have been prepared by expert teachers of grade 12. These objective questions with solutions are expected to come in the upcoming Standard 12 examinations. Learn the below provided MCQ questions to get better marks in examinations.

Question. Which of the following is studied under Micro Economics ?
(a) Individual unit
(b) Economic Aggregate
(c) National Income
(d) None of these

Question. On which base structure of economic problems has been installed?
(a) Unlimited Wants
(b) Limited Resources
(c) Both (a) and (b)
(d) None of the above

Question. Which of the following statement is true?
(a) Human wants are infinite
(b) Resources are limited
(c) Scarcity problem gives birth to choice .
(d) All of these

Question. Which is a central problem of an economy ?
(a) Allocation of Resources
(b) Optimum Utilisation of Resources
(c) Economic Development
(d) All of these

Question. To which factor, economic problem is basically related to:
(a) Choice
(b) Consumer’s Selection
(c) Firm Selection
(d) None of these

Question. Which economy has a co-existence of private and public sectors ?
(a) Capitalist
(b) Socialist
(c) Mixed
(d) None of these

Question. In which economy decisions are taken on the basis of price mechanism ?
(a) Socialist
(b) Capitalist
(c) Mixed
(d) All of these

Question. Production Possibility Curve is:
(a) Concave to the axis
(b) Convex to the axis
(c) Parallel to the axis
(d) Vertical to the axis

Question. Which of the following is studied under Macro Economics ?
(a) National Income
(b) Full. Employment
(c) Total Production
(d) All of these

Question. Which of the following is a source of production ?
(a) Land
(b) Labour
(c) Capital
(d) All of these

Question. Who said, “Economics is a science of wealth.”
(a) Marshall
(b) Robbins
(c) Adam Smith
(d) J.K. Mehta

Question. “Economics is a science of logic.’’ Who said it ?
(a) Hicks
(b) Keynes
(c) Robbins
(d) Marshall

Question. Who was the father of Economics ?
(a) I. B. Say
(b) Malthus
(c) Adam Smith
(d) Joan Robinson

Question. The word ‘micro’ was firstly used by:
(a) Marshall
(b) Boulding
(c) Keynes
(d) Ragnar Frish

Question. Which of the following is not a factor of production ?
(a) Land
(b) Labour
(c) Money
(d) Capital

Question. Consumer behaviour is studied in:
(a) Micro Economics
(b) Income Theory
(c) Mac o Economics
(d) None of these

Question. Who used the word ‘micro’ for the first time:
(a) Marshall
(b) Boulding
(c) Keynes
(d) Ragnar Frisch

Question. What is the shape of production possibility curve:
(a) Concave to the origin
(b) Concave
(c) Straight line
(d) None of the above.

Question. The point of optimum utilization of resources lies on which side of PPC curve:
(a) Towards left
(b) Towards right
(c) Inside
(d) Upwards

Question. Price theory studies the problem of:
(a) What goods to produce and how much to produce
(b) How to produce
(c) For whom to produce
(d) All of the above

Question. Trade off is shown by:

(a) Point N to M
(b) Point R to N
(c) Point N to S
(d) Point R to S

Question. Macro economics deals with:
(a) Theory of distribution
(b) Theory of income and employment
(c) theory of economic growth
(d) All of the above

Question. Economic problem arises because:
(a) Wants are unlimited
(b) Resources are scarce
(c) Alternative uses of resources exist
(d) All of the above

Question. Central problem of an economy can be:
(a) What goods to produce and how much to produce
(b) How to produce
(c) For whom to produce
(d) All of the above

Question. Theory of distribution studies the problem of:
(a) What goods to produce and how much to produce
(b) How to produce
(c) For whom to produce
(d) All of the above

Question. If PPC shifts to the right, it means:
(a) Discovery of new stock
(b) Advancement in technology
(c) Generation of employment
(d) All of the above

Question. Smooth PPC is based on the assumption that:
(a) Infinite production possibilities exist
(b) Limited production possibilities exist
(c) Two production possibilities exist
(d) None of the above

Question. Theory of production studies the problem of
(a) What goods to produce and how much to produce
(b) How to produce
(c) For whom to produce
(d) All of the above

Question. Which point shows under utilisation of resources?

(a) Point N
(b) Point M
(c) Point R
(d) Point S

Question. Production possibility curve (PPC) is defined as different combination of goods and services that can be produced by whom when the resources are fully employed?
(a) Firm
(b) Industry
(c) Economy
(d) All of the above

Question. Who wrote ‘Nature and Causes of Wealth of Nations’?
(a) Adam Smith
(b) Alfred Marshall
(c) Samuelson
(d) Robbins

Question. PPC is also called:
(a) Opportunity cost curve
(b) Transformation curve
(c) Production possibility frontier
(d) All of the above

Question. PP’ shifts rightwards to P1P1′. It shows:

(a) Improvement in technology in good X
(b) Improvement in technology in good Y
(c) Improvement in technology in both good X and good Y
(d) Stagnation

Question. If production of good X rises by 1 unit and that of good Y falls from 15 to 12.5 units then, marginal opportunity cost of X is:
(a) 27.5
(b) 2.5
(c) 15
(d) 12.5

Question. Shape of PPC is:
(a) Downward slopping concave to the origin
(b) Downward sloping convex to the origin
(c) Downward sloping straight line to the origin
(d) All of the above

Question. If PPC shifts to the left, it means:
(a) Resources are destroyed
(b) More unemployment
(c) Use of outdated technology
(d) All of the above

Question. PPC can effectively explain the central problem of:
(a) What to produce
(b) How to produce
(c) Economic growth
(d) All of the above

Question. Price theory deals with:
(a) Product pricing
(b) Factor pricing
(c) Welfare economics
(d) All of the above

Question. Assumption of PPC is/are:
(a) There are only two goods
(b) Resources are not specific
(c) Resources are fully employed
(d) All of the above

Question. If earthquake takes place, then what will happen to PPC?
(a) Shifts inward
(b) Remains same
(c) Shifts outward
(d) All of the above

Question. Slope of PPC between point N and M is:

(a) 3
(b) 20
(c) 2.5
(d) 3.5

Question. Which point is not attainable?

(a) Point N
(b) Point M
(c) Point R
(d) Point S

Fill in the blanks:

Question. Every person has ………………… quantity of goods.
Answer : Few
Question. Opportunity cost ………………….. in production list.
Answer : Changes
Question. Economic growth is related to ………………………… economics.
Answer : Macro
Question. Mixed economy is composed of ………………………. and …………………………
Answer : Socialism, Capitalism

State true or false:

Question. Production possibility curve is convex towards main point.
Answer : False
Question. An economy can be capitalist, socialist or opportunist.
Answer : False
Question. Macro-economics is the study of the problems of unemployment, price inflation etc.
Answer : True

Match the following:

‘A’	‘B’
1. The mechanism of micro-economics	(a) Capitalist economy
2. Basic financial problem	(b) All resources are efficiently used
3. No state inteference	(c) Price analysis
4. No restrictions on trade	(d) Limitation and election
5. Main assumptions of production possibility curve	(e) Open economy.

Answer :

‘A’	‘B’
1. The mechanism of micro-economics	(c) Price analysis
2. Basic financial problem	(d) Limitation and election
3. No state inteference	(a) Capitalist economy
4. No restrictions on trade	(e) Open economy.
5. Main assumptions of production possibility curve	(b) All resources are efficiently used

Assertion and Reason Type Questions

(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true

Question. Assertion (A) Microeconomics and macroeconomics are two branches of economics which are studied in isolation of each other.
Reason (R) In economic sense, what applies in microeconomics doesn’t holds true in macroeconomics 

Question. Assertion (A) Positive science relates to the statements which are based upon value judgement.
Reason (R) Every economic statement can be classified either as positive science or normative science.

Question. Assertion (A) Economics is the study of management of human resources in the presence of scarcity of resources.
Reason (R) Resources are not scarce always but they are scarce in relation to the human wants. 

Question.Assertion (A) Study of the central problem of “how to produce” depends upon the problem of choice of “what to produce”.
Reason (R) All the central problems of an economy are interdependent on each other. 

Case Study Based MCQ Questions Introduction to Micro Economics Class 12 Economics

Direction Read the following case study and answer questions 49 to 53 on the basis of the same.
Economics is about how people make decisions given their limited resources. The decisions are taken with regard to the basic economic activities such as production and consumption of goods and services and saving and investment. However, taking decision is not easy or simple. One must estimate the wants and the availability of resources while taking decisions on production of goods and services. Similarly, distribution of the produced goods in the society needs to be done properly.
The basic problems central to any economy, therefore, relate to production, consumption and distribution.

Question. Economics is always about making choice with given ……… .
(a) goods
(b) production
(c) investment
(d) resources 

Question. Which of the following components impacts the production decision in an economy?
(a) Wants
(b) Availability of resources
(c) Both (a) and (b)
(d) Neither (a) nor (b) 

Question. The basic central problem of an economy is related to
(a) production
(b) consumption
(c) distribution 
(d) All of these   

Question. Unlimited human wants are the most dominant reason behind the economic problems. Choose from the options below.
(a) True
(b) False
(c) Partially true
(d) Incomplete statement   

Question. Assertion (A) The third economic problem is related to the economic activity of distribution.
Reason (R) Government needs to decide the distribution of goods depending upon the economic situation of the population.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true,but Reason (R) is not the correct explanation of Assertion A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true 

Direction Read the following case study and answer questions 54 to 58 on the basis of the same.
Economists frequently distinguish between ‘positive’ and ‘normative’ economics. Positive economics is concerned with the development and testing of positive statements about the world that are objective and verifiable. Normative statements derive from an opinion or a point of view. Thus, the words ‘should’, ‘ought to’ or ‘it is better to’ frequently occur.
The validity of normative statements can never be tested. Positive statements, on the other hand, can be tested, at least in theory, if not always in practice.
For anyone working at a management position, it is helpful to distinguish between positive and normative statements. Managers and the people they work with, or are advised by, are likely to make liberal use of both, although normative statements may sometimes be disguised as ositive statements. Whilst both types of statement may deserve attention, better management decisions are likely to result when the distinction between them is recognised. It is often possible to rephrase ormative statements in such a way that they become positive ones. For example, the normative statement ‘‘the subsidies of the European Union’s Common Agricultural Policy (CAP) should be removed’’ could be rephrased as the positive statement ‘‘removing CAP subsidies will raise farm prices in developing countries’’. The validity of the latter statement could, in theory, be tested.

Question. Assertion (A) Positive economics is concerned with the development and testing of positive statements.
Reason (R) As the economy grows, validity of the facts becomes difficult with the same piece of information.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion A)
(b) Both Assertion (A) and Reason (R) are true,but Reason (R) is not the correctnexplanation of Assertion (A) 
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true 

Question. The validity of normative science can ……… be tested using any statistical method.
(a) always
(b) never
(c) sometimes
(d) None of these   

Question. ‘‘Removal of Common Agricultural Policies related to subsidies will raise farm prices in developing countries.’’The above statement is a … economics.
(a) positive
(b) normative
(c) Both (a) and (b)
(d) Neither (a) nor (b) 

Question. People working at management positions use both positive and normative statements due to which of the following reasons?
(a) It helps in understanding different situations that may prevail in the organisation
(b) It helps to deal with changingmarket conditions related to production
(c) It helps in understanding the impact of economics in the economy
(d) All of the above 

(HOTS) Questions

Question. Unemployment is reduced due to the measures taken by the government. State its economic value in the context of production possibilities frontier.
Ans. When unempolyment is reduced or employment is raised then production will increase. PPC will shift outwards, country’s GDP will rise.

Question. Th e government has started promoting foreign capital. What is its economic value in the context of production possibilities frontier? 
Ans. It will increase inflow of foreign capital. Its economic value is rise in production potential.

Question. Unemployment is reduced due to the measures taken by the government. State its economic value in the context of production possibilities frontier. 
Ans. When unemployments is reduced or employment is raised then production will increase. PPC will shift outwards, country’s GDP will rise.

Question. Large number of technical training institutions have been started by the government. State its economic value in the context of production possibilities frontier.
Ans. Its economic value is that production potential of the country will rise. PPC will shift outwards.

Question. Large number of technical training institutions have been started by the government. State its economic value in the context of production possibilities frontier.
Ans. Its economic value is that production potential of the country will rise. PPC will shift outwards.

We hope the above multiple choice questions for Class 12 Economics for Chapter 1 Introduction to Micro Economics provided above with answers based on the latest syllabus and examination guidelines issued by CBSE, NCERT and KVS are really useful for you. Introduction to Micro Economics is an important chapter in Class 12 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of class 12 students. Please go through these and let us know if you have any feedback in the comments section.