McqMate
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 |
26. |
The importance of time element in price determination was firstly analyzed by |
A. | adam smith |
B. | alfred marshall |
C. | david ricardo |
D. | j m keynes |
Answer» B. alfred marshall |
27. |
In the market period, price determination in the case of a perishable commodity is influenced by its |
A. | demand |
B. | supply |
C. | demand as well as the supply |
D. | none of the above |
Answer» A. demand |
28. |
In the short-period, |
A. | all factors are fixed |
B. | some factors are fixed and others are variable |
C. | all factors are variable |
D. | none of the above |
Answer» B. some factors are fixed and others are variable |
29. |
In the long-period, |
A. | all factors are fixed |
B. | some factors are fixed and others are variable |
C. | all factors are variable |
D. | none of the above |
Answer» C. all factors are variable |
30. |
Zero economic profit arises in the long run in the case of |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» A. perfect competition |
31. |
Zero economic profit includes |
A. | zero normal profit |
B. | normal profit |
C. | super normal profit |
D. | average profit |
Answer» B. normal profit |
32. |
Economic efficiency is achieved in the long run in the case of |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» A. perfect competition |
33. |
Consumer surplus will be maximum in the case of |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» A. perfect competition |
34. |
At the optimum short-run level of output, the firm will be |
A. | maximizing total profit |
B. | minimizing total losses |
C. | either maximizing total profit or minimizing total losses |
D. | maximizing profit per unit |
Answer» C. either maximizing total profit or minimizing total losses |
35. |
The short-run supply curve of a perfectly competitive firm is given by |
A. | rising portion of the mc curve over and above the shut-down point |
B. | rising portion of the mc curve over and above the break-even point |
C. | rising portion of the mc curve over and above the ac curve |
D. | rising portion of the mc curve |
Answer» A. rising portion of the mc curve over and above the shut-down point |
36. |
When the perfectly competitive firm and industry are both in long run equilibrium |
A. | p = mr = smc = lmc |
B. | p = mr = sac = lac |
C. | p = mr =lowest point on the lac curve |
D. | all of the above |
Answer» D. all of the above |
37. |
Monopolistic competition is characterized by |
A. | few firms’ selling differentiated products |
B. | many firms selling homogeneous product |
C. | few firms selling homogeneous product |
D. | many firms selling differentiated products |
Answer» D. many firms selling differentiated products |
38. |
The theory of monopolistic competition was popularized by |
A. | marshall |
B. | keynes |
C. | chamberlin |
D. | pigou |
Answer» C. chamberlin |
39. |
A monopolistically competitive market is distinguished from perfect competition by the fact that |
A. | few sellers |
B. | it has few buyers |
C. | it deals with differentiated products |
D. | none of the above |
Answer» C. it deals with differentiated products |
40. |
Excess capacity is a hallmark of |
A. | perfect competition |
B. | monopoly |
C. | oligopoly |
D. | monopolistic competition |
Answer» D. monopolistic competition |
41. |
Monopolistically competitive firms |
A. | are small in size |
B. | have small share in the market |
C. | are large in the size |
D. | both a and b |
Answer» D. both a and b |
42. |
Selling cost assumes paramount importance in |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | none of the above |
Answer» C. monopolistic competition |
43. |
Under monopolistic competition, there can be freedom of entry in the sense that there is freedom to produce |
A. | close substitutes |
B. | perfect substitutes |
C. | complements |
D. | none of the above |
Answer» A. close substitutes |
44. |
A firm under monopolistic competition advertise because |
A. | to compete successfully with rival |
B. | to lower cost of production |
C. | to increase revenue and sales |
D. | since it cannot raise price |
Answer» C. to increase revenue and sales |
45. |
In the case of monopolistic competition, |
A. | short run supply curve cannot be defined |
B. | mr curve cannot be defined |
C. | ar curve cannot be defined |
D. | none of the above |
Answer» A. short run supply curve cannot be defined |
46. |
Under monopolistic competition, super normal profit arise when |
A. | ar=ac |
B. | mr=mc |
C. | ar>ac |
D. | ar<ac |
Answer» C. ar>ac |
47. |
Which of the following condition are met in the long run equilibrium of the monopolistic competitor earning only normal profit |
A. | mc=ac |
B. | p=ac |
C. | p=mr |
D. | p=mc |
Answer» B. p=ac |
48. |
The term group equilibrium is referred to |
A. | duopoly |
B. | monopolistic competition |
C. | perfect competition |
D. | oligopoly |
Answer» B. monopolistic competition |
49. |
Increase or decrease in the level of production by a monopolistically competitive firm have ------- impact on price and output decisions of other firms |
A. | very significant |
B. | significant |
C. | small |
D. | negligible |
Answer» D. negligible |
50. |
Monopolistic competitive firm fixes the price of its product |
A. | independent of the price of close substitutes |
B. | close to the prices of close substitutes |
C. | at a very high level |
D. | none of the above |
Answer» B. close to the prices of close substitutes |
51. |
Under monopolistic competition, an increase in the number of firms producing close substitutes will make the demand curve of each firm |
A. | inelastic |
B. | elastic |
C. | downward sloping |
D. | perfectly inelastic |
Answer» B. elastic |
52. |
The demand curve faced by the a monopolistically competitive firm is very elastic if the degree of product differentiation is |
A. | very low |
B. | very high |
C. | zero |
D. | moderate |
Answer» B. very high |
53. |
Which one of the following is not a feature of monopolistic competition |
A. | homogeneous products |
B. | differentiated products |
C. | selling cost |
D. | no uniform prices |
Answer» A. homogeneous products |
54. |
The book “The theory of Monopolistic Competition” is written by |
A. | alfred marshal |
B. | e h chamberlin |
C. | joan robinson |
D. | j m keynes |
Answer» B. e h chamberlin |
55. |
The book “The Economics of Imperfect Competition” is written by |
A. | alfred marshal |
B. | e h chamberlin |
C. | joan robinson |
D. | j m keynes |
Answer» C. joan robinson |
56. |
It is assumed that the cost curves of all the firms in the monopolistic competition are |
A. | different due to product differentiation |
B. | never considered in equilibrium |
C. | never formulated |
D. | same in spite of product differentiation |
Answer» D. same in spite of product differentiation |
57. |
Free entry into monopolistically competitive market ensures that all firms will produce at the lowest point of LAC |
A. | always |
B. | sometimes |
C. | never |
D. | cannot say |
Answer» C. never |
58. |
Under monopolistic competition, the long run equilibrium of the firm is established at the |
A. | minimum point of lac |
B. | point where lac is still falling |
C. | point where lac is rising |
D. | minimum point of lmc |
Answer» B. point where lac is still falling |
59. |
In short run a firms in monopolistic competition |
A. | always earns profit |
B. | incurs loss |
C. | earns normal profit only |
D. | may earn normal profit, abnormal profit or incur losses |
Answer» D. may earn normal profit, abnormal profit or incur losses |
60. |
In long run all the firms in the monopolistic competition |
A. | always earns profit |
B. | incurs loss |
C. | earns normal profit only |
D. | may earn normal profit, abnormal profit or incur losses |
Answer» C. earns normal profit only |
61. |
The short run equilibrium level of output of the monopolistic competitor is given by |
A. | price = mc |
B. | price= ac |
C. | mc=mr |
D. | p=mr |
Answer» C. mc=mr |
62. |
When a group of monopolistic competition attains the equilibrium, the firms in the group |
A. | charge different prices, but produce identical outputs |
B. | produce different output, but charge the same price |
C. | charge different price and produce different output |
D. | none of the above |
Answer» B. produce different output, but charge the same price |
63. |
The elasticity of average revenue curve of the monopolistic competitor, depends on |
A. | the extent of product differentiation |
B. | the number of firms |
C. | number of buyers |
D. | both a & b |
Answer» D. both a & b |
64. |
Under monopolistic competition, the demand curve of the product of an individual firm depends on the nature and prices of close substitutes |
A. | true |
B. | false |
C. | not always |
D. | depends on the nature of the product |
Answer» A. true |
65. |
When demand curve is elastic, MR is |
A. | 1 |
B. | 0 |
C. | positive |
D. | negative |
Answer» C. positive |
66. |
The best or optimum level of output for the pure monopolist |
A. | mr=mc |
B. | p=mc |
C. | p=ac |
D. | highest p |
Answer» A. mr=mc |
67. |
Which type of competition leads to maximum exploitation of consumer |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» B. monopoly |
68. |
In the short run, the monopolist |
A. | breaks even |
B. | incurs loss |
C. | makes profit |
D. | any of the above |
Answer» D. any of the above |
69. |
The demand for the product of a monopoly firm is |
A. | inelastic |
B. | elastic |
C. | unitary elastic |
D. | perfectly inelastic |
Answer» B. elastic |
70. |
If the monopolist incurs loss in the short run, then in the long run |
A. | the monopolist go out of business |
B. | the monopolist will stay in the business |
C. | the monopolist break even |
D. | any of the above |
Answer» D. any of the above |
71. |
Which of the form of monopoly regulation is the most advantages to the consumer |
A. | price control |
B. | lump sum tax |
C. | per unit tax |
D. | all of the above |
Answer» A. price control |
72. |
The monopolist who is in |
A. | short run equilibrium will also be in long run equilibrium |
B. | long run equilibrium will also be in short run equilibrium |
C. | long run equilibrium may or may not be in short run equilibrium |
D. | none of the above |
Answer» B. long run equilibrium will also be in short run equilibrium |
73. |
In long run the monopolist can earn abnormal profit because of |
A. | blocked entry |
B. | high selling price |
C. | low cost |
D. | economies of scale |
Answer» A. blocked entry |
74. |
Price discrimination under monopoly is of |
A. | one |
B. | two |
C. | three |
D. | four |
Answer» C. three |
75. |
The market in which there is a single seller is called |
A. | oligopoly |
B. | monopsony |
C. | monopoly |
D. | nine of the above |
Answer» C. monopoly |
76. |
Monopsony refers to |
A. | single seller |
B. | a few sellers |
C. | single buyer |
D. | a few buyers |
Answer» C. single buyer |
77. |
Discriminating monopoly is possible if two markets have |
A. | differing elasticity of demand |
B. | differing average cost |
C. | same elasticity |
D. | different average cost |
Answer» A. differing elasticity of demand |
78. |
Monopolist can fix |
A. | both price and output |
B. | neither price and output |
C. | either price and output |
D. | none of the above |
Answer» C. either price and output |
79. |
A discrimination monopolist charges in a market |
A. | lower prices if it has lower elasticity |
B. | higher prices if it has lower elasticity |
C. | lower prices if it has higher elasticity |
D. | cannot say |
Answer» A. lower prices if it has lower elasticity |
80. |
A firm practicing price discrimination will be |
A. | changing qualities of the product |
B. | buying from the cheapest market |
C. | buying from firms |
D. | charging different prices in different markets |
Answer» D. charging different prices in different markets |
81. |
The best level of output for the monopolist is |
A. | ac is minimum |
B. | tc=tr |
C. | tr and tc are parallel |
D. | tr is maximum |
Answer» C. tr and tc are parallel |
82. |
If the monopolist faces identical demand for his commodity in the two separate markets, by practicing third degree price discrimination |
A. | will increase his tr and total profit |
B. | can increase his tr and profit |
C. | cannot increase his tr and profit |
D. | will charge different prices in different market |
Answer» C. cannot increase his tr and profit |
83. |
Under pure monopoly, there will be |
A. | no distinction between firm and industry |
B. | one firm no industry |
C. | no firm one industry |
D. | very few firms |
Answer» A. no distinction between firm and industry |
84. |
Monopolist will not produce that portion of demand curve where the elasticity of demand |
A. | equal to unity |
B. | less than unity |
C. | greater than zero |
D. | none of the above |
Answer» B. less than unity |
85. |
Under monopoly, the equilibrium price is |
A. | equal to mc |
B. | less than mc |
C. | more than mc |
D. | equal to ac |
Answer» C. more than mc |
86. |
The cross elasticity of demand for the monopolist product is |
A. | very low |
B. | moderate |
C. | high |
D. | very high |
Answer» A. very low |
87. |
Which of the following is known as the perfect price discrimination |
A. | first degree price discrimination |
B. | second degree price discrimination |
C. | third degree price discrimination |
D. | nine of the above |
Answer» A. first degree price discrimination |
88. |
A monopolist usually earns |
A. | economic profit |
B. | only normal profit |
C. | losses |
D. | profit and losses, which are uncertain |
Answer» A. economic profit |
89. |
Price discrimination is possible |
A. | under any market form |
B. | only under monopoly |
C. | only under monopolistic competition |
D. | only in perfect competition |
Answer» B. only under monopoly |
90. |
Who introduced various types of price discrimination |
A. | alfred marshall |
B. | adam smith |
C. | a c pigou |
D. | j b say |
Answer» C. a c pigou |
91. |
Oligopoly is a market situation characterized by |
A. | large number of buyers and sellers |
B. | a single seller |
C. | fairly large number of buyers and sellers |
D. | a few sellers |
Answer» D. a few sellers |
92. |
‘Indeterminateness of demand curve’ is a feature of |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» D. oligopoly |
93. |
Selling cost is maximum in the case of |
A. | monopoly |
B. | oligopoly |
C. | perfect competition |
D. | monopolistic competition |
Answer» B. oligopoly |
94. |
The concept of ‘Kinked demand curve’ is related to |
A. | monopoly |
B. | monopolistic competition |
C. | perfect competition |
D. | oligopoly |
Answer» D. oligopoly |
95. |
The concept of ‘Kinked demand curve’ was developed by |
A. | alfred marshal |
B. | j r hicks |
C. | p m sweezy |
D. | a.k sen |
Answer» C. p m sweezy |
96. |
‘Group behavior’ is a feature of |
A. | monopoly |
B. | oligopoly |
C. | perfect competition |
D. | monopolistic competition |
Answer» B. oligopoly |
97. |
Advertising can become ‘a life and death matter’ in |
A. | perfect competition |
B. | monopoly |
C. | monopolistic competition |
D. | oligopoly |
Answer» D. oligopoly |
98. |
Classical oligopoly models are related to |
A. | collusive oligopoly |
B. | non-collusive oligopoly |
C. | price leadership model |
D. | none of the above |
Answer» B. non-collusive oligopoly |
99. |
Price leadership can be in the form of |
A. | price leadership by a low cost firm |
B. | price leadership by a dominant firm |
C. | a barometric price leadership |
D. | all of the above |
Answer» D. all of the above |
100. |
‘Cartels’ are example for |
A. | collusive oligopoly |
B. | non-collusive oligopoly |
C. | monopsony |
D. | none of the above |
Answer» A. collusive oligopoly |
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