CBSE Class 12 Introductory Microeconomics by Pavan | Practice Test to Test Your Knowledge
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  3. CBSE Class 12 Introductory Microeconomics
CBSE Class 12 Introductory Microeconomics

CBSE Class 12 Introductory Microeconomics

Comprehensive mock test on Consumer Theory, Production, and Market Structure. Features microeconomic concepts, mathematical applications, and economic analysis.

2025-07-19
Pavan Pavan
CBSE Class 12 Microeconomics Grade 12

Duration

30 min

Questions

26

Marking

Negative

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Questions Preview

What is the primary issue discussed in the context of scarcity in an economy?

A
The abundance of resources relative to needs
B
The limitation of resources compared to societal needs
C
The overproduction of goods and services
D
The equilibrium between supply and demand

What does the Production Possibility Frontier (PPF) illustrate?

A
The maximum possible production combinations of two goods given the economy's resources
B
The government’s production capacity
C
The optimal consumption choices for consumers
D
The demand curve for a product

What is meant by the term 'opportunity cost' in economics?

A
The cost of an additional unit of a good in terms of the next best alternative
B
The cost of production in the market
C
The total monetary cost of producing a good
D
The cost paid for the labor used in production

What is a major issue in the allocation of scarce resources in an economy?

A
Choosing how to utilize the resources to maximize production
B
The redistribution of income among different regions
C
The environmental impact of production processes
D
Managing the externalities of production

Which of the following is a key characteristic of a market economy?

A
Government makes all economic decisions
B
Economic activities are organized through government planning
C
Prices are determined by free market competition
D
The government directly owns all resources

In a centrally planned economy, who makes the key economic decisions?

A
The consumers
B
The government
C
Private individuals
D
Market forces

What type of economy is characterized by both market and government intervention?

A
Planned economy
B
Mixed economy
C
Command economy
D
Traditional economy

Which concept refers to the social science that deals with the production, distribution, and consumption of goods and services?

A
Sociology
B
Economics
C
Political Science
D
Anthropology

What does positive economics focus on?

A
What ought to be
B
What is
C
Moral questions
D
Personal preferences

Which economic issue deals with the distribution of goods and services among individuals?

A
Production
B
Allocation
C
Consumption
D
Distribution

What is the 'price mechanism' that coordinates activities in a market economy?

A
Supply and demand
B
Market clearing
C
Price signals
D
Fiscal policy

What is the opportunity cost of a decision?

A
The cost of choosing the best alternative
B
The benefit from choosing the next best alternative
C
The value of the chosen option
D
The cost of production in terms of resources used

Which of the following is a feature of a market economy?

A
Government controls the production of goods
B
Private ownership of resources
C
Public welfare is the primary concern
D
Government sets prices for goods

Which of the following is the correct definition of macroeconomics?

A
The study of the behavior of individual consumers and firms
B
The study of the economy as a whole, focusing on aggregate measures
C
The study of international trade
D
The study of the production and distribution of money

What term refers to the total value of all final goods and services produced within a country?

A
Gross Domestic Product (GDP)
B
Consumer Price Index (CPI)
C
Gross National Income (GNI)
D
Market Price

Which of the following is a central problem of an economy?

A
How to allocate limited resources to meet unlimited wants
B
How to prevent inflation
C
How to increase savings
D
How to reduce the unemployment rate

Which of the following is true about a centrally planned economy?

A
Private ownership of resources is encouraged
B
Government makes all decisions regarding production and distribution
C
Prices are determined by the forces of supply and demand
D
There is minimal government interference

In which type of economy is the price mechanism responsible for resource allocation?

A
Market economy
B
Centrally planned economy
C
Traditional economy
D
Mixed economy

What is meant by the term 'microeconomics'?

A
The study of individual markets and agents
B
The study of national income and unemployment
C
The study of global trade relations
D
The study of government intervention in the economy

What is the central objective of studying economics?

A
Maximizing profits
B
Addressing resource allocation and scarcity
C
Promoting equal wealth distribution
D
Minimizing government interference

What is the concept of 'scarcity' in economics?

A
The situation where there is more than enough of a good or service
B
The lack of resources to meet unlimited wants
C
The ability to produce enough goods and services for all
D
The absence of competition in the market

Which of the following is an example of a service?

A
A car
B
A haircut
C
A loaf of bread
D
A laptop

Which of the following is true about a production possibility frontier (PPF)?

A
It represents all possible combinations of goods that can be produced with available resources
B
It shows the maximum possible consumption combinations of goods
C
It reflects the government’s planned production choices
D
It shows the opportunity costs of producing goods

What economic problem arises due to limited resources and infinite wants?

A
Unemployment
B
Scarcity
C
Inflation
D
Deflation

What is the primary difference between positive and normative economics?

A
Positive economics involves evaluation of economic policies, while normative economics focuses on facts and figures
B
Positive economics studies how the economy works, while normative economics studies how the economy should work
C
Normative economics focuses on the long term, while positive economics focuses on the short term
D
Positive economics uses value judgments, while normative economics avoids them

What is the main subject of macroeconomics?

A
The behavior of individual markets
B
The performance of the economy as a whole
C
The analysis of government policy
D
The behavior of firms in the market