1. |
Which of the following industry is most closely approximates the perfectly competitive model. |
A. | automobiles |
B. | cigarette |
C. | newspaper |
D. | wheat farming |
Answer» D. wheat farming |
2. |
Under perfectly competitive market an individual seller is a |
A. | price taker |
B. | price maker |
C. | individual seller can influence the price |
D. | none of the above |
Answer» A. price taker |
3. |
Uniform price is a feature of |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» A. perfect competition |
4. |
Which of the following is not a feature of a perfectly competitive market |
A. | large number of buyers and sellers |
B. | homogeneous product |
C. | group behaviour |
D. | perfect competition |
Answer» C. group behaviour |
5. |
A perfectly competitive firm gets only normal profit when |
A. | mc = mr |
B. | ac = ar |
C. | ac < ar |
D. | mc = ar |
Answer» B. ac = ar |
6. |
Which one of the following is a feature of a perfect competition |
A. | group behavior |
B. | selling cost |
C. | homogeneous product |
D. | differentiated product |
Answer» C. homogeneous product |
7. |
Average revenue curve under perfect competition is |
A. | upward sloping |
B. | downward sloping |
C. | horizontal straight line |
D. | vertical straight line |
Answer» C. horizontal straight line |
8. |
Marginal revenue curve under perfect competition is |
A. | upward sloping |
B. | downward sloping |
C. | horizontal straight line |
D. | vertical straight line |
Answer» C. horizontal straight line |
9. |
Average revenue curve under imperfect competition is |
A. | upward sloping |
B. | downward sloping |
C. | horizontal straight line |
D. | vertical straight line |
Answer» B. downward sloping |
10. |
Marginal revenue curve under imperfect competition is |
A. | upward sloping |
B. | downward sloping |
C. | horizontal straight line |
D. | vertical straight line |
Answer» B. downward sloping |
11. |
Perfect competition prevails when the demand for the output of each producer is |
A. | elastic |
B. | perfectly elastic |
C. | inelastic |
D. | perfectly inelastic |
Answer» D. perfectly inelastic |
12. |
Equilibrium price is determined under perfect competition by |
A. | the market demand |
B. | the market supply |
C. | the interaction between market demand and market supply |
D. | none of the above |
Answer» C. the interaction between market demand and market supply |
13. |
In the market period, market supply curve is |
A. | perfectly elastic |
B. | perfectly inelastic |
C. | elastic |
D. | inelastic |
Answer» B. perfectly inelastic |
14. |
Given the supply of a commodity, in the market period, the price of a commodity is determined by |
A. | the market demand curve alone |
B. | the market supply curve alone |
C. | the market demand curve and the market supply curve |
D. | none of the above |
Answer» A. the market demand curve alone |
15. |
Total profit is maximum when |
A. | total revenue is equal to total cost |
B. | total revenue is greater than total cost |
C. | the positive difference between total revenue and total costs is largest. |
D. | all of the above |
Answer» C. the positive difference between total revenue and total costs is largest. |
16. |
Total profits are maximized where |
A. | tr equals tc |
B. | tr curve and tc curve are parallel |
C. | tr curve and tc curves are parallel and tc exceeds tr |
D. | tr curve and tc curves are parallel and tr exceeds tc |
Answer» D. tr curve and tc curves are parallel and tr exceeds tc |
17. |
The equality between MC and MR is |
A. | a necessary condition for equilibrium of the firm under perfect condition |
B. | a sufficient condition for equilibrium of the firm under perfect competition |
C. | a necessary but not sufficient condition for equilibrium of the firm under perfect condition |
D. | a necessary and sufficient condition for equilibrium of the firm under perfect condition |
Answer» C. a necessary but not sufficient condition for equilibrium of the firm under perfect condition |
18. |
The condition of equilibrium of the industry under perfect competition is |
A. | mc = mr |
B. | mc = ac |
C. | mc = mr = ar |
D. | mc = ac = ar |
Answer» D. mc = ac = ar |
19. |
In the short-run, a competitive firm can earn |
A. | normal profit |
B. | super normal profit |
C. | loss |
D. | either a or b or c depending upon the level of average cost. |
Answer» D. either a or b or c depending upon the level of average cost. |
20. |
If price is equal to average cost, in the short-run, the competitive firm can earn |
A. | only normal profit |
B. | super normal profit |
C. | loss |
D. | all of the above |
Answer» A. only normal profit |
21. |
If price is greater than average cost, in the short-run, the competitive firm can earn |
A. | normal profit |
B. | super normal profit |
C. | loss |
D. | all of the above |
Answer» B. super normal profit |
22. |
If price is less than average cost, in the short-run, the competitive firm can earn |
A. | normal profit |
B. | super normal profit |
C. | loss |
D. | all of the above |
Answer» C. loss |
23. |
Break-even point is a point where price is equal to |
A. | ac |
B. | avc |
C. | afc |
D. | mc |
Answer» A. ac |
24. |
Shut-down point is a point where price is equal to |
A. | ac |
B. | avc |
C. | afc |
D. | mc |
Answer» B. avc |
25. |
In the long run, a competitive firm can earn |
A. | normal profit |
B. | super normal profit |
C. | loss |
D. | any of the above |
Answer» A. normal profit |
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