Economics is an essential subject for students in Class 11, as it helps develop an understanding of the economy, market, and financial systems. To assist you in preparing for exams and assessments, we’ve compiled a list of 50 Multiple Choice Questions (MCQs) covering key topics from the Class 11 Economics syllabus. These MCQs are designed to test your knowledge of fundamental concepts in economics and help you strengthen your preparation.
The topics covered include Microeconomics, Macroeconomics, and Indian Economic Development, which are the three main pillars of Economics at the Class 11 level. Whether you are studying for school exams or competitive tests, these MCQs will help you grasp the basics and improve your understanding of the subject.
MCQs on Economics Class 11
Microeconomics
- What is the main objective of Microeconomics?
- A) Study of the entire economy
- B) Study of individual economic units
- C) Study of national income
- D) Study of unemployment
- Answer: B) Study of individual economic units
- What does the law of demand state?
- A) As price increases, demand decreases
- B) As price decreases, demand decreases
- C) Price has no effect on demand
- D) Price increases with demand
- Answer: A) As price increases, demand decreases
- Which of the following is an example of a perfect competitive market?
- A) Agriculture
- B) Electricity supply
- C) Oil and gas
- D) Banking sector
- Answer: A) Agriculture
- What is meant by the term ‘Elasticity of Demand’?
- A) Change in demand due to change in income
- B) Change in quantity demanded due to change in price
- C) Change in supply due to change in price
- D) None of the above
- Answer: B) Change in quantity demanded due to change in price
- Which of the following is not a characteristic of monopolistic competition?
- A) Large number of sellers
- B) Differentiated products
- C) Price takers
- D) Free entry and exit
- Answer: C) Price takers
- Which of the following does not cause a shift in the demand curve?
- A) Change in income
- B) Change in tastes and preferences
- C) Change in the price of related goods
- D) Change in the price of the good itself
- Answer: D) Change in the price of the good itself
- In the short run, a firm should continue to operate as long as:
- A) Total revenue is greater than total cost
- B) Total revenue covers variable cost
- C) Marginal cost is equal to marginal revenue
- D) Average total cost is greater than marginal cost
- Answer: B) Total revenue covers variable cost
- Which of the following is an example of a public good?
- A) A sandwich
- B) A road
- C) A car
- D) A television
- Answer: B) A road
- What does the term ‘monopoly’ refer to?
- A) Market with many sellers
- B) Market with one seller
- C) Market with many buyers
- D) Market with limited competition
- Answer: B) Market with one seller
- What is the main focus of welfare economics?
- A) Study of unemployment
- B) Study of economic welfare and equity
- C) Study of inflation
- D) Study of monetary policy
- Answer: B) Study of economic welfare and equity
Macroeconomics
- What is the primary goal of Macroeconomics?
- A) Study of individual economic units
- B) Study of aggregate economic variables
- C) Study of the market structure
- D) Study of government policies
- Answer: B) Study of aggregate economic variables
- Which of the following is included in the national income?
- A) Government spending on welfare
- B) Earnings from exports
- C) Transfer payments
- D) Profits of foreign companies
- Answer: B) Earnings from exports
- Which of the following is a component of Gross Domestic Product (GDP)?
- A) Government expenditure
- B) Imports
- C) Transfer payments
- D) Unpaid work
- Answer: A) Government expenditure
- Inflation is best defined as:
- A) A decrease in the supply of money
- B) A decrease in the general price level
- C) A continuous rise in the general price level
- D) An increase in real income
- Answer: C) A continuous rise in the general price level
- Which organization is responsible for formulating monetary policy in India?
- A) Ministry of Finance
- B) Reserve Bank of India
- C) Indian Planning Commission
- D) Securities and Exchange Board of India
- Answer: B) Reserve Bank of India
- Which of the following is not a factor of production?
- A) Land
- B) Labour
- C) Money
- D) Capital
- Answer: C) Money
- What is ‘Fiscal Policy’?
- A) Policies related to government expenditure and taxation
- B) Policies related to controlling inflation
- C) Policies related to money supply
- D) Policies related to foreign exchange rates
- Answer: A) Policies related to government expenditure and taxation
- What is ‘Monetary Policy’?
- A) Policy controlling government spending
- B) Policy controlling taxation
- C) Policy controlling money supply
- D) Policy controlling unemployment
- Answer: C) Policy controlling money supply
- Which of the following is a direct tax?
- A) Sales tax
- B) Income tax
- C) Excise tax
- D) Value Added Tax
- Answer: B) Income tax
- What is the main purpose of ‘Quantitative Easing’?
- A) To decrease interest rates
- B) To increase government spending
- C) To control inflation
- D) To increase money supply in the economy
- Answer: D) To increase money supply in the economy
Indian Economic Development
- The Indian economy is primarily:
- A) Industrial
- B) Agricultural
- C) Service-based
- D) Mining-based
- Answer: B) Agricultural
- What is the main objective of planning in India?
- A) To promote regional disparities
- B) To increase centralization of economic control
- C) To reduce poverty and promote economic growth
- D) To increase imports
- Answer: C) To reduce poverty and promote economic growth
- Which of the following is a characteristic of the Indian economy?
- A) Low unemployment
- B) High standard of living
- C) Large informal sector
- D) Developed infrastructure
- Answer: C) Large informal sector
- What does the term ‘Green Revolution’ refer to in India?
- A) Increase in industrial production
- B) Increase in agricultural production through modern technology
- C) Increase in foreign investments
- D) Increase in service sector growth
- Answer: B) Increase in agricultural production through modern technology
- Which of the following is a major challenge to economic development in India?
- A) High savings rate
- B) Poor infrastructure
- C) High literacy rate
- D) High inflation rate
- Answer: B) Poor infrastructure
- What is the primary goal of the National Rural Employment Guarantee Act (NREGA)?
- A) To provide free healthcare
- B) To provide job opportunities in rural areas
- C) To promote foreign trade
- D) To increase industrial production
- Answer: B) To provide job opportunities in rural areas
- Which of the following is a major feature of India’s economic reforms?
- A) Full government control of industries
- B) Liberalization, Privatization, and Globalization (LPG)
- C) Focus on import substitution
- D) Increase in trade barriers
- Answer: B) Liberalization, Privatization, and Globalization (LPG)
- Which of the following is the biggest sector in India’s economy by contribution to GDP?
- A) Agriculture
- B) Manufacturing
- C) Services
- D) Mining
- Answer: C) Services
- Which institution is responsible for regulating the banking system in India?
- A) Securities and Exchange Board of India (SEBI)
- B) Reserve Bank of India (RBI)
- C) Indian Finance Ministry
- D) Ministry of Commerce
- Answer: B) Reserve Bank of India (RBI)
- The poverty line in India is determined based on:
- A) Per capita income
- B) Income inequality
- C) Minimum consumption level
- D) Employment rate
- Answer: C) Minimum consumption level
- Microeconomics
- Which of the following is an example of a homogeneous product?
A) Soap
B) Rice
C) Toothpaste
D) All of the above
Answer: D) All of the above - The shape of a perfectly elastic demand curve is:
A) Horizontal
B) Vertical
C) Downward sloping
D) Upward sloping
Answer: A) Horizontal - Which of the following market structures is characterized by one seller and many buyers?
A) Monopoly
B) Oligopoly
C) Monopolistic competition
D) Perfect competition
Answer: A) Monopoly - In the case of inelastic demand, an increase in price leads to:
A) An increase in total revenue
B) A decrease in total revenue
C) No change in total revenue
D) A shift in demand curve
Answer: A) An increase in total revenue - What is the main characteristic of a monopolist’s demand curve?
A) It is perfectly elastic
B) It is downward sloping
C) It is upward sloping
D) It is vertical
Answer: B) It is downward sloping - Which of the following is true for an equilibrium price?
A) The quantity demanded exceeds quantity supplied
B) The quantity supplied exceeds quantity demanded
C) The quantity demanded equals the quantity supplied
D) There is no effect on the market
Answer: C) The quantity demanded equals the quantity supplied - What happens when a firm is producing at a level where marginal cost equals marginal revenue?
A) The firm is making the maximum profit
B) The firm is making no profit
C) The firm is incurring losses
D) The firm is losing customers
Answer: A) The firm is making the maximum profit - Which of the following will shift the demand curve for a good to the right?
A) A decrease in the price of a substitute good
B) A decrease in consumer income
C) An increase in consumer preferences for the good
D) A decrease in the price of the good
Answer: C) An increase in consumer preferences for the good - The concept of diminishing marginal utility is best illustrated by:
A) The law of demand
B) The law of supply
C) The relationship between total and marginal utility
D) The equilibrium price
Answer: C) The relationship between total and marginal utility
Macroeconomics - Which of the following is an example of a stock variable?
A) National income
B) Money supply
C) Exports
D) Government expenditure
Answer: B) Money supply - What is the main aim of expansionary fiscal policy?
A) To control inflation
B) To reduce unemployment and stimulate growth
C) To reduce the budget deficit
D) To reduce taxes
Answer: B) To reduce unemployment and stimulate growth - Which of the following is a tool of monetary policy?
A) Government spending
B) Taxes
C) Open market operations
D) Subsidies
Answer: C) Open market operations - What does the GDP deflator measure?
A) The total value of goods and services produced
B) The inflation rate
C) The real GDP
D) The difference between nominal GDP and real GDP
Answer: D) The difference between nominal GDP and real GDP - Which of the following is not included in the calculation of GDP?
A) Government expenditure
B) Investment in capital goods
C) The value of intermediate goods
D) Exports
Answer: C) The value of intermediate goods - If a country’s exports exceed its imports, it is said to have:
A) A trade surplus
B) A trade deficit
C) Balanced trade
D) A budget deficit
Answer: A) A trade surplus - Which of the following is a reason for the increase in inflation?
A) High demand in the economy
B) Increased government spending
C) A decrease in the money supply
D) All of the above
Answer: D) All of the above - Which of the following is considered an expansionary monetary policy?
A) Increasing interest rates
B) Reducing government spending
C) Increasing the money supply
D) Increasing taxes
Answer: C) Increasing the money supply - The multiplier effect in economics refers to:
A) The total impact of an initial change in spending on income
B) The increase in inflation due to higher demand
C) The decrease in GDP due to an increase in taxes
D) The change in national income resulting from a decrease in government spending
Answer: A) The total impact of an initial change in spending on income
Indian Economic Development - Which of the following is a feature of the Indian mixed economy?
A) State-owned industries dominate
B) Private sector plays no role
C) Both public and private sectors coexist
D) The economy is entirely state-controlled
Answer: C) Both public and private sectors coexist - The ‘Niti Aayog’ was established to:
A) Plan economic development in India
B) Promote economic liberalization
C) Monitor government spending
D) Manage foreign trade
Answer: A) Plan economic development in India - Which sector of the Indian economy is considered the backbone of economic development?
A) Agricultural sector
B) Industrial sector
C) Service sector
D) Infrastructure sector
Answer: A) Agricultural sector - The main focus of India’s ‘Make in India’ initiative is:
A) Encouraging foreign investment in agriculture
B) Promoting indigenous manufacturing
C) Reducing unemployment in the service sector
D) Promoting foreign exports
Answer: B) Promoting indigenous manufacturing - The primary aim of the Goods and Services Tax (GST) in India is to:
A) Increase taxes on imports
B) Create a unified tax system across the country
C) Increase corporate tax rates
D) Decrease government revenue
Answer: B) Create a unified tax system across the country - Which of the following is the largest source of tax revenue in India?
A) Income tax
B) Customs duties
C) Corporate tax
D) Goods and Services Tax (GST)
Answer: D) Goods and Services Tax (GST) - Which of the following is a reason for India’s population growth?
A) High birth rate
B) High immigration
C) Low death rate
D) All of the above
Answer: D) All of the above - Which of the following is a consequence of high inflation?
A) Increased purchasing power
B) Decreased cost of living
C) Reduced savings and investments
D) Increased foreign investment
Answer: C) Reduced savings and investments - The primary objective of India’s ‘National Health Policy’ is to:
A) Improve the quality of healthcare
B) Expand education
C) Promote foreign investment
D) Increase industrial productivity
Answer: A) Improve the quality of healthcare
These additional 20 MCQs will help you continue your preparation for the Class 11 Economics exams. They cover essential topics related to Microeconomics, Macroeconomics, and Indian Economic Development. Keep practicing these questions, and make sure to revise the concepts behind each answer to fully grasp the subject. Happy studying!
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