CA Foundation Economics MCQ with Answers PDF

Dear readers, today we are going to share CA Foundation Economics MCQ with Answers PDF for all of you. Here in this article, we have also provided a direct download link for the CA Foundation Economics MCQ with Answers PDF for all those who are studying from the Chartered Accountants. It can be very useful for them.

The full form of CA is the Chartered Accountants. The Chartered Accountants (CA) Foundation Course is the entrance level for the chartered accountancy course. It is offered by the Institute of Chartered Accountants of India which is also known as ICAI in the short form. ICAI is the World’s second-largest professional accounting body and the largest professional accounting body in India.

It is under the ownership of the Ministry of Corporate Affairs, Government of India. After passing secondary school examinations (Class-X) the candidate can register for CA Foundation and after qualifying for the 12th examination appear in the foundation exam. Institute of Chartered Accountants of India has allowed provisional registration for 10th class passed students.

CA Foundation Economics MCQ with Answers PDF

CA Foundation Economics Chapter Wise Weightage Syllabus

Chapter Name	May 2018	November 2018	May 2019	November 2019	November 2020
CA Foundation Economics MCQ with Answers (60 Marks)
1. Nature and Scope of Economics	10	10	10	10	11
2. Theory of Demand and Supply	16	12	15	8	9
3. Theory of Production and Cost	19	5	8	20	11
4. Meaning and Type of Market	13	23	16	16	17
5. Business Cycles	2	10	11	12	12
CA Foundation BCK MCQ Questions and Answers (40 Marks)
6. Introduction to Business and BCK	10	7	7	9	8
7. Business Environment	4	8	7	2	4
8. Business Organisation	9	5	7	2	5
9. Government Policies for Business Growth	4	5	7	5	7
10. Organizations Facilitating Business	6	5	6	2	6
11. Common Business Terminologies	7	10	7	14	10
Total Marks	100	100	100	100	100

CA Foundation Economics Chapter 1 MCQ with Answers PDF

Nature and Scope of Business Economics CA Foundation MCQ Economics Chapter 1- Introduction:

1. The term ‘Economics’ owes its origin to the Greek word.

(a) Aikonomia
(b) Wikonornia
(c) Oikonomia
(d) None of the above

Answer: (c) Oikonomia

2. Adam Smith published his masterpiece “An enquiry into the nature and causes of the wealth of nations” in the year __________.

(a) 1776
(b) 1786
(c) 1789
(d) 1790

Answer: (a) 1776

3. Oikonomia means __________.

(a) Industry
(b) Management of household
(c) Services
(d) None of these

Answer: (b Management of household

4. Economists regard decision-making as important because:

(a) The resources required to satisfy our unlimited wants and needs are finite or scarce.
(b) It is crucial to understand how we can best allocate our scarce resources to satisfy society’s unlimited wants and needs.
(c) Resources have alternative uses.
(d) All of the above.

Answer: (d) All of the above.

5. ‘Economics is the science of choice making’. It implies:

(a) No choice is to be made
(b) Choice to be made between alternative uses
(c) Choice to be made between means and ends
(d) None of the above

Answer: (b) Choice to be made between alternative uses

6. Which one is the feature of Marshall’s definition?

(a) Limited ends
(b) Scarce means
(c) Study of wealth as well as the study of man
(d) Study of allocation of resources

Answer: (c) Study of wealth as well as the study of man

7. According to Robbins, ‘means’ are:

(a) Scarce
(b) Unlimited
(c) Undefined
(d) All of these

Answer: (a) Scarce

8. Economics is the study of:

(a) How society manages its unlimited resources
(b) How to reduce our wants until we are satisfied
(c) How society manages its scarce resources
(d) How to fully satisfy our unlimited wants.

Answer: (c) How society manages its scarce resources

9. In Economics, we use the term scarcity to mean:

(a) Absolute scarcity and lack of resources in less developed countries.
(b) Relative scarcity i.e. scarcity about the wants of the society.
(c) Scarcity during times of business failure and natural calamities.
(d) Scarcity caused on account of excessive consumption by the rich.

Answer: (b) Relative scarcity i.e. scarcity about the wants of the society.

10. What implication(s) does resource scarcity have for the satisfaction of wants?

(a) Not all wants can be satisfied.
(b) We will never be faced with the need to make choices.
(c) We must develop ways to decrease our individual wants.
(d) The discovery of new natural resources is necessary to increase our ability to satisfy wants.

Answer: (a) Not all wants can be satisfied.

11. Adam Smith defined Economics in terms of:

(a) The Science of welfare
(b) The Science of scarcity
(c) The Science of wealth
(d) The Science of wealth and welfare

Answer: (c) The Science of wealth

12. Who defines Economics in terms of Dynamic Growth and Development?

(a) Robbins
(b) Paul A Samuelson
(c) Adam Smith
(d) None of these

Answer: (b) Paul A Samuelson

13. In every economic system, scarcity imposes limitations on __________.

(a) Households, business firms, governments and the nation as a whole.
(b) Households and business firms, but not the governments.
(c) Local and state governments, but not the federal government.
(d) Households and governments, but not business firms.
(e) Business firms, governments, and the nation as a whole.

Answer: (a) Households, business firms, governments and the nation as a whole.

14. Economic goods are considered scarce resources because they __________.

(a) Cannot be increased in quantity.
(b) Do not exist in adequate quantity to satisfy the requirements of the society.
(c) Are of primary importance in satisfying social requirements.
(d) Are limited to man-made goods.

Answer: (b) Do not exist in adequate quantity to satisfy the requirements of the society.

15. ‘Economics is the study of mankind in the ordinary business of life was given by:

(a) Adam Smith
(b) Lord Robbins
(c) Alfred Marshall
(d) Samuelson

Answer: (c) Alfred Marshall

16. Consider the following and decide which, if any, economy is without scarcity:

(a) The pre-independent Indian economy, where most people were farmers.
(b) A mythical economy where everybody is a billionaire.
(c) Any economy where income is distributed equally among its people.
(d) None of the above

Answer: (d) None of the above

17. Human wants are in response to satisfying their wants?

(a) Unlimited
(b) Limited
(c) Scarce
(d) Multiple

Answer: (a) Unlimited

18. Economic goods are considered as scarce resources because __________.

(a) Inadequate quantity to satisfy the needs of the society
(b) Not possible to increase in quantity
(c) Limited hands to make goods
(d) Primary importance in satisfying social requirements

Answer: (a) Inadequate quantity to satisfy the needs of the society

19. The meaning of the time element in Economics is:

(a) Calendar time
(b) Clock time
(c) Operational time in which supply adjusts with the market demand
(d) None of the above

Answer: (c) Operational time in which supply adjusts with the market demand

20. All wants of an individual are not of:

(a) Equal importance
(b) Immediate importance
(c) Fixed importance
(d) All of the above

Answer: (a) Equal importance

21. __________ refers to the process of selecting an appropriate alternative that will provide the most efficient means of attaining the desired end, from two or more alternative courses of action.

(a) Decision making
(b) Strategy
(c) Problem Solving
(d) Effectiveness

Answer: (a) Decision making

22. Business Economics is __________.

(a) Abstract and applies the tools of Microeconomics.
(b) Involves the practical application of economic theory in business decision-making.
(c) Incorporates tools from multiple disciplines.
(d) (b) and (c) above.

Answer: (d) (b) and (c) above.

23. Business Economics is also known as?

(a) Applied Economics
(b) Managerial Economics
(c) Micro Economics
(d) All of the above

Answer: (b) Managerial Economics

24. The question of choice arises because our productive resources __________.

(a) Are limited
(b) Can be employed in alternatives
(c) Both (a) & (b)
(d) None of the above

Answer: (c) Both (a) & (b)

25. The management of a business unit generally needs to make __________.

(a) Strategic Decision
(b) Tactical Decision
(c) Operational Decision
(d) All of the above

Answer: (d) All of the above

CA Foundation Economics Chapter 2 MCQ with Answers PDF

Theory of Demand and Supply CA Foundation MCQ Economics Chapter 21. Demand for a commodity refers to:

(a) Desire is backed by the ability to pay for the commodity.
(b) Need for the commodity and willingness to pay for it.
(c) The quantity demanded of that commodity at a certain price.
(d) The quantity of the commodity demanded at a certain price during any particular period.

Answer: (d) The quantity of the commodity demanded at a certain price during any particular period.

2. Demand is the ________.

(a) the desire for a commodity given its price and those of related commodities.
(b) the entire relationship between the quantity demanded and the price of good other things remaining the same.
(c) willingness to pay for a good if income is larger enough.
(d) ability to pay for a good.

Answer: (b) the entire relationship between the quantity demanded and the price of good other things remains the same.

3. The quantity demanded is always expressed as ________.

(a) Separately in isolation
(b) Separately with quantity supplied
(c) At a given price
(d) None of these

Answer: (c) At a given price

4. The quantity demanded is a ________.

(a) Flow
(b) Stock
(c) Single isolated purchase
(d) Concept without reference to time.

Answer: (a) Flow

5. In economics, Effective Demand for a thing depends on:

(a) Desire
(b) Means to purchase
(c) Willingness to use those means for that purchase
(d) All of the above.

Answer: (d) All of the above.

6. All of the following are determinants of demand except:

(a) Tastes and preferences.
(b) Quantity supplied.
(c) Income of the consumer.
(d) Price of related goods.

Answer: (b) Quantity supplied.

7. Which of the following will affect the demand for non-durable goods?

(a) Disposable income
(b) Price
(c) Demography
(d) All of the above

Answer: (d) All of the above

8. The term “Ceteris Paribus” refers to ________.

(a) Other things being equal
(b) Other things also change
(c) Other things may change
(d) None of the above

Answer: (a) Other things being equal

9. Ceteris Paribus, the demand for a commodity is inversely related to its price. This happens because of:

(a) Income Effect
(b) Substitution Effect
(c) Both (a) & (b)
(d) None of above

Answer: (c) Both (a) & (b)

10. ________ is/are the types of Related Commodities.

(a) Complementary
(b) Substitutes
(c) Complementary and Substitutes
(d) Complementary or Substitutes

Answer: (c) Complementary and Substitutes

11. Which one of the following set of Commodities represents Complementary goods?

(a) Tea and Sugar
(b) Automobile and Petrol
(c) Pen and ink
(d) All of the above

Answer: (d) All of the above

12. ________ are those goods which are consumed together or simultaneously.

(a) Complementary
(b) Substitutes
(c) Similar
(d) Un-related

Answer: (a) Complementary

13. When two commodities are complementary, a fall in the price of one (other things being equal) will cause the demand for the other to ________.

(a) Fall
(b) Rise
(c) Remain constant
(d) Fall substantially

Answer: (b) Rise

14. Two Commodities are called ________ when they satisfy the same want and can be used with ease in place of one another.

(a) Substitutes
(b) Complementary
(c) Un-related
(d) Opposite

Answer: (a) Substitutes

15. There is a ________ relation between the demand for a product and the price of its substitutes.

(a) Direct
(b) Positive
(c) Indirect
(d) Both (a)&(b)

Answer: (d) Both (a)&(b)

16. Highly-priced goods are consumed by status-seeking rich people to satisfy their need for conspicuous consumption. This is called as ________.

(a) Veblen Effect
(b) Snob Effect
(c) Helen Effect
(d) None of these

Answer: (a) Veblen Effect

17. ________ are the commodities for which the quantity demanded rises only up to a certain level of in-come and decreases with an increase in money income beyond this level.

(a) Inferior Goods
(b) Normal Goods
(c) Consumption Goods
(d) Durable Goods

Answer: (a) Inferior Goods

18. When goods are substitutes, a fall in the price of one (Ceteris Paribus) leads to the quantity demanded of its substitutes.

(a) Rise
(b) Fall
(c) Constant
(d) No effect.

Answer: (b) Fall

19. Which of the following will affect the demand for non-durable goods?

(a) Disposable income
(b) Price
(c) Demography
(d) All of the above

Answer: (d) All of the above

19A. Which of the following pairs of goods is an example of substitutes?

(a) Tea and sugar.
(b) Tea and coffee.
(c) Pen and ink.
(d) Shirt and trousers.

Answer: (b) Tea and coffee.

20. If the price of Pepsi decreases relative to the price of Coke and 7-UP, the demand for:

(a) Coke will decrease.
(b) 7-Up will decrease.
(c) Coke and 7-UP will increase.
(d) Coke and 7-Up will decrease.

Answer: (d) Coke and 7-Up will decrease.

21. Which of the following is an incorrect statement?

(a) When goods are substitutes, a fall in the price of one (ceteris pari¬bus) leads to a fall in the quantity demanded of its substitutes.
(b) When commodities are complements, a fall in the price of one (other things being equal) will cause the demand for the other to rise.
(c) As the income of the consumer increases, the demand for the commodity increases always and vice versa.
(d) When a commodity becomes fashionable people prefer to buy it and therefore its demand increases.

Answer: (c) As the income of the consumer increases, the demand for the commodity increases always and vice versa.

22. What will happen in the rice market if buyers are expecting higher rice prices in the near future?

(a) The demand for rice will increase.
(b) The demand for rice will decrease.
(c) The demand for rice will be unaffected.
(d) None of the above.

Answer: (a) The demand for rice will increase.

23. Conspicuous goods are also known as:

(a) Prestige goods.
(b) Snob goods.
(c) Veblen goods.
(d) All of the above.

Answer: (d) All of the above.

24. A good which cannot be consumed more than once is known as ________.

(a) Durable good
(b) Non-durable good
(c) Producer good
(d) None of the above

Answer: (b) Non-durable good

25. A relative price is ________.

(a) Price expressed in terms of money.
(b) What do you get paid for babysitting your cousin.
(c) The ratio of one money price to another.
(d) Equal to a money price.

Answer: (c) The ratio of one money price to another.

CA Foundation Economics Chapter 3 MCQ with Answers PDF

1. What is Production is Economics:

(a) Creating/Addition of Utility
(b) Production of food grains
(c) Creation of services
(d) Manufacturing of goods

Answer: (a) Creating/Addition of Utility

2. Which of the following is considered production in economics?

(a) Helping a blind person in crossing the road
(b) Group dance performance in a college annual function
(c) Holding a child who is falling from a wall
(d) Performing art in a theatre

Answer: (d) Performing art in a theatre

3. Which of the following is considered production in Economics?

(a) Tilling of soil.
(b) Singing a song before friends.
(c) Preventing a child from falling into a manhole on the road.
(d) Painting a picture for pleasure.

Answer: (a) Tilling of soil.

4. Which of the following statements is true?

(a) The services of a doctor are considered production.
(b) Man can create matter.
(c) The services of a housewife are considered production.
(d) When a man creates a table, he creates matter.

Answer: (a) The services of a doctor are considered production.

5. In Economics, the entire process of ________ is nothing but the creation of utilities in the form of goods and services.

(a) Consumption
(b) Production
(c) Exchange
(d) Distribution

Answer: (b) Production

6. Production is defined as:

(a) Creation of matter
(b) Creation of utility in a matter
(c) Creation of infrastructural facilities
(d) None of the above

Answer: (b) Creation of utility in a matter

7. According to ________, Production is the organized activity of transforming resources into finished products in the form of goods and services, and the objective of production is to satisfy the demand of such transformed “resources”.

(a) James Bates
(b) J.R. Parkinson
(c) Marshall
(d) Both (a) and (b)

Answer: (d) Both (a) and (b)

8. ________ to exchange in the market is an essential component of production.
(a) Intention
(b) Ability
(c) Capacity
(d) Possibility
Answer:
(a) Intention

9. Production does not include work done ________.

(a) Within a household out of love & affection
(b) Voluntary services
(c) For self-consumption
(d) All of the above.

Answer: (d) All of the above.

10. Factors of production refer to :

(a) Inputs
(b) Outputs
(c) Both (a) & (b)
(d) Either (a) or (b)

Answer: (a) Inputs

11. ________ are the factors or resources which make it possible to produce goods and services.

(a) Land, Labour, and Bank
(b) Capital, Owner and manpower
(c) Land, Labour and Entrepreneurial ability
(d) Land, Labour, Capital and Entrepreneurial ability

Answer: (d) Land, Labour, Capital and Entrepreneurial ability

12. Which of the following factors of production is a free gift of nature and refers to Natural resources?

(a) Land
(b) Labour
(c) Capital
(d) Entrepreneurial Ability

Answer: (a) Land

13. Which of the following is not a characteristic of land?

(a) Its supply for the economy is limited.
(b) It is immobile.
(c) Its usefulness depends on human efforts.
(d) It is produced by our forefathers.

Answer: (d) It is produced by our forefathers.

14. Which of the following is not a characteristic of Land?

(a) It is a free gift of nature
(b) It is a mobile factor of production
(c) It is limited in quantity
(d) Its productive power is indestructible

Answer: (b) It is a mobile factor of production

15. Which among the following is not a characteristic of land?

(a) It is an active factor
(b) It has a variety of uses
(c) Its production powers are indestructible
(d) Its supply is limited

Answer: (a) It is an active factor

16. Which of the following statement about factors of production is not true?

(a) Land is a passive factor
(b) Land is a free gift of nature
(c) Land is immobile
(d) Land is perishable

Answer: (d) Land is perishable

17. No two pieces of land and alike. They differ in fertility and situation. Therefore, Land is ________.

(a) Homogenous
(b) Heterogeneous
(c) Bitrogeneous
(d) None of these.

Answer: (b) Heterogeneous

18. Which of the following is correct about Land?

(a) It is mobile
(b) It has single-use
(c) Its supply is fixed
(d) It is homogeneous.

Answer: (c) Its supply is fixed

19. The total supply of Land is ________ from the point of view of the economy. However, it is relatively ________ from the point of view of a firm.

(a) Perfectly Inelastic, Inelastic
(b) Perfectly Inelastic, Relatively Elastic
(c) Perfectly Elastic, Inelastic
(d) Perfectly Elastic, elastic

Answer: (b) Perfectly Inelastic, Relatively Elastic

20. Labour force wants more ________.

(a) Facility
(b) Leisure
(c) Benefit
(d) All of the above

Answer: (b) Leisure

21. Which of the following is not a characteristic of labour?

(a) It is perishable
(b) It has weak bargaining power
(c) Labour and Labour power cannot be separated
(d) Labour is not mobile

Answer: (d) Labour is not mobile

22. The labour-power or efficiency of labour depends upon the ________.

(a) Laborer’s inherent and acquired qualities.
(b) Features of work environment
(c) Incentive to work
(d) All of the above.

Answer: (d) All of the above.

23. Labour is highly perishable in the sense that ________.

(a) A labourer cannot store his labour.
(b) The life of labour is short.
(c) The labourer sells his labour against wages but retains the capacity to work.
(d) The labour is always low priced.

Answer: (a) A labourer cannot store his labour.

24. Without the active participation of labour, land and capital may not produce anything. It means labour is a factor.

(a) Passive
(b) Active
(c) Working
(d) Executing

Answer: (b) Active

25. Human capital refers to:

(a) Savings by individuals
(b) Mobilisation of saving
(c) Human skills and abilities
(d) Productive investment

Answer: (c) Human skills and abilities