MCQ Collection
Accounting and Finance MCQs
Practice Accounting and Finance questions with answers and explanations.
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Correct Answer: B. Quantity demanded generally falls when price rises, other things equal
Explanation:
The law describes an inverse price-quantity relationship.
Other determinants are held constant.
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Correct Answer: B. Additional satisfaction from consuming one more unit
Explanation:
Marginal utility measures the change in total satisfaction.
It often declines as consumption increases.
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Correct Answer: B. Unemployment caused by insufficient aggregate demand during downturns
Explanation:
Recessions reduce production and labor demand.
Cyclical unemployment falls as economic activity recovers.
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Correct Answer: C. Government financial support that lowers cost or encourages an activity
Explanation:
Subsidies may support consumption, production, investment, or positive externalities.
They also create fiscal costs and may distort incentives.
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Correct Answer: C. Quantity supplied generally rises when price rises, other things equal
Explanation:
Higher prices usually make additional production more attractive.
The relationship is positive, ceteris paribus.
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Correct Answer: C. Additional satisfaction generally falls as more units are consumed
Explanation:
Successive units usually add less satisfaction than earlier units.
This helps explain downward-sloping demand.
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Correct Answer: C. Ability to produce a good at lower opportunity cost than another producer
Explanation:
Comparative advantage depends on relative opportunity costs, not absolute productivity.
Specialization and trade can benefit all parties.
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Correct Answer: D. Using taxes and transfers to alter the distribution of income or wealth
Explanation:
Redistribution may support equity, poverty reduction, or social insurance.
It can occur through progressive taxes and targeted benefits.
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Correct Answer: D. A change in the product's own price
Explanation:
Own-price changes alter quantity demanded along the existing curve.
Other determinants shift the entire curve.
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Correct Answer: D. A market with many firms, identical products, and free entry
Explanation:
Individual firms are price takers in perfect competition.
No single firm can influence the market price.
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Correct Answer: D. A fall in a currency's value relative to other currencies
Explanation:
Depreciation makes foreign currency more expensive in a flexible-rate system.
It can affect import prices, exports, and inflation.
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Correct Answer: A. A government payment made without receiving a current good or service in return
Explanation:
Pensions, unemployment benefits, and social assistance are transfers.
They redistribute income rather than directly purchase output.
