McqMate
| 101. |
Homogenous product means products are: |
| A. | Similar |
| B. | Close substitutes |
| C. | Quite alike |
| D. | None of the above |
| Answer» D. None of the above | |
| 102. |
Monopoly means: |
| A. | Single firm |
| B. | No close substitutes |
| C. | Barriers to entry |
| D. | All of the above |
| Answer» D. All of the above | |
| 103. |
‘Homogenous products’ is a characteristic of: |
| A. | Perfect competition only |
| B. | Perfect oligopoly only |
| C. | Both (a) and (b) |
| D. | None of the above |
| Answer» C. Both (a) and (b) | |
| 104. |
There is inverse relation between price and demand for the product of a firm under: |
| A. | Monopoly only |
| B. | Monopolistic competition only |
| C. | Both under monopoly and monopolistic competition |
| D. | Perfect competition only |
| Answer» C. Both under monopoly and monopolistic competition | |
| 105. |
A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenue will be: |
| A. | Greater than Average Revenue |
| B. | Less than Average Revenue |
| C. | Equal to Average Revenue |
| D. | Zero |
| Answer» C. Equal to Average Revenue | |
| 106. |
Differentiated products is a characteristic of: |
| A. | Monopolistic competition only |
| B. | Oligopoly only |
| C. | Both monopolistic competition and oligopoly |
| D. | Monopoly |
| Answer» C. Both monopolistic competition and oligopoly | |
| 107. |
Demand curve of a firm is perfectly elastic under: |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 108. |
Marginal revenue of a firm is constant throughout under: |
| A. | Perfect competition |
| B. | Monopolistic competition |
| C. | Oligopoly |
| D. | All the above |
| Answer» A. Perfect competition | |
| 109. |
A seller cannot influence the market price under |
| A. | Perfect Competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | All of the above |
| Answer» A. Perfect Competition | |
| 110. |
There are only a few sellers under |
| A. | Perfect Competition |
| B. | Monopolistic competition |
| C. | Monopoly |
| D. | Oligopoly |
| Answer» D. Oligopoly | |
| 111. |
Under perfect competition, MR curve is: |
| A. | Horizontal |
| B. | Vertical |
| C. | Falling |
| D. | Rising |
| Answer» A. Horizontal | |
| 112. |
When AR is above AC, firm earns: |
| A. | Supernormal profit |
| B. | Loss |
| C. | Breakeven point |
| D. | Minimise losses |
| Answer» A. Supernormal profit | |
| 113. |
When AR = AC, firm is at: |
| A. | Supernormal profit point |
| B. | Loss making point |
| C. | Breakeven point |
| D. | Minimise losses point |
| Answer» C. Breakeven point | |
| 114. |
When AC is more than AR, what is the firm doing? |
| A. | Making supernormal profit |
| B. | Incurring loss |
| C. | Having breakeven point |
| D. | Minimising losses |
| Answer» B. Incurring loss | |
| 115. |
When AR passes through some point between minimum AVC and AC, it is called: |
| A. | Supernormal profit |
| B. | Loss |
| C. | Breakeven point |
| D. | Minimising losses |
| Answer» D. Minimising losses | |
| 116. |
When AR passes through minimum point of AVC, it is called: |
| A. | Breakeven point |
| B. | Shutdown point |
| C. | Normal profit point |
| D. | Supernormal profit point |
| Answer» B. Shutdown point | |
| 117. |
Breakeven point means: |
| A. | AR = AC |
| B. | TR = TC |
| C. | No profit, no loss |
| D. | All of the above |
| Answer» D. All of the above | |
| 118. |
Which of the following industries most closely approximates the perfectly competitive model? |
| A. | Automobile |
| B. | cigarette |
| C. | newspaper |
| D. | wheat farming. |
| Answer» D. wheat farming. | |
| 119. |
Given the supply of a commodity in the market period, the price of the 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 | |
| 120. |
Total profits are maximized where |
| A. | TR equals TC |
| B. | the TR curve and the TC curve are parallel |
| C. | the TR curve and the TC curve are parallel and TC exceeds TR |
| D. | the TR curve and the TC curve are parallel and TR exceeds TC. |
| Answer» D. the TR curve and the TC curve are parallel and TR exceeds TC. | |
| 121. |
The best, or optimum, level of output for a perfectly competitive firm is given by the point where |
| A. | MR equals AC |
| B. | MR equals MC |
| C. | MR exceeds MC by the greatest amount |
| D. | MR equals MC and MC is rising. |
| Answer» D. MR equals MC and MC is rising. | |
| 122. |
At the best, or optimum, short-run level of output, the firm will be |
| A. | maximizing total profits |
| B. | minimizing total losses |
| C. | either maximizing total profits or minimizing total losses |
| D. | maximizing profits per unit. |
| Answer» C. either maximizing total profits or minimizing total losses | |
| 123. |
If P exceeds AVC but is smaller than AC at the best level of output, the firm is |
| A. | making a profit |
| B. | incurring a loss but should continue to produce in the short run |
| C. | incurring a loss and should stop producing immediately |
| D. | breaking even. |
| Answer» B. incurring a loss but should continue to produce in the short run | |
| 124. |
At the shut-down point, |
| A. | P =AVC |
| B. | TR = TVC |
| C. | the total losses of the firm equal TFC |
| D. | all of the above. |
| Answer» D. all of the above. | |
| 125. |
The short-run supply curve of the perfectly competitive firm is given by |
| A. | the rising portion of its MC curve over and above the shut-down point |
| B. | the rising portion of its MC curve over and above the break-even point |
| C. | the rising portion of its MC curve over and above the AC curve |
| D. | the rising portion of its MC curve. |
| Answer» A. the rising portion of its MC curve over and above the shut-down point | |
| 126. |
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. | |
| 127. |
When the perfectly competitive firm but not the industry is in long-run equilibrium, |
| A. | P = MR = SMC = SAC |
| B. | P = MR = LMC = LAC |
| C. | P = MR = SMC = LMC = SAC =LAC |
| D. | P = MR = SMC = LMC = SAC = lowest point on the LAC curve. |
| Answer» C. P = MR = SMC = LMC = SAC =LAC | |
| 128. |
An increase in output in a perfectly competitive and constant cost industry which is in longrun equilibrium will come |
| A. | entirely from new firms |
| B. | entirely from existing firms |
| C. | either entirely from new firms or entirely from existing firms |
| D. | partly from new firms and partly from existing firms. |
| Answer» A. entirely from new firms | |
| 129. |
If factor prices and factor quantities move in the same direction, we have |
| A. | a constant cost industry |
| B. | an increasing cost industry |
| C. | a decreasing cost industry |
| D. | any of the above. |
| Answer» B. an increasing cost industry | |
| 130. |
When the D curve is elastic, MR is |
| A. | 1 |
| B. | 0 |
| C. | positive |
| D. | negative. |
| Answer» C. positive | |
| 131. |
If P = Rs.10 at the point on the D curve where e = 0.5, MR is |
| A. | Rs.5 |
| B. | Rs.0 |
| C. | 2Rs.1 |
| D. | 2Rs.10. |
| Answer» D. 2Rs.10. | |
| 132. |
The best, or optimum, level of output for the pure monopolist occurs at the point where |
| A. | STC is minimum |
| B. | TR = STC |
| C. | TR is maximum |
| D. | the TR and STC curves are parallel. |
| Answer» D. the TR and STC curves are parallel. | |
| 133. |
At the best, or optimum, level of output for the pure monopolist, |
| A. | MR = SMC |
| B. | P = SMC |
| C. | P = lowest SAC |
| D. | P is highest. |
| Answer» A. MR = SMC | |
| 134. |
If the monopolist incurs losses in the short run, then in the long run |
| A. | the monopolist will go out of business |
| B. | the monopolist will stay in business |
| C. | the monopolist will break even |
| D. | any of the above is possible. |
| Answer» D. any of the above is possible. | |
| 135. |
The imposition of a maximum price at the point where the monopolist’s SMC curve intersects the D curve causes the monopolist to |
| A. | break even |
| B. | incur losses |
| C. | make profits |
| D. | any of the above. |
| Answer» D. any of the above. | |
| 136. |
Price discrimination is an essential feature of |
| A. | Perfect competition |
| B. | Oligopoly |
| C. | Duopoly |
| D. | monopoly |
| Answer» D. monopoly | |
| 137. |
Under monopoly the slope of AR curve is: |
| A. | Upward sloping |
| B. | downward sloping |
| C. | horizontal |
| D. | None of these |
| Answer» B. downward sloping | |
| 138. |
In a monopsony market there is: |
| A. | Single seller |
| B. | single buyer |
| C. | Two sellers |
| D. | two buyers |
| Answer» B. single buyer | |
| 139. |
Third degree price discrimination occurs when the monopolist charges different prices for the same commodity in different |
| A. | Markets |
| B. | places |
| C. | continents |
| D. | countries |
| Answer» A. Markets | |
| 140. |
Price discrimination is possible: |
| A. | Under any market form |
| B. | only under monopoly |
| C. | only under monopolistic completion |
| D. | only in perfect competition |
| Answer» B. only under monopoly | |
| 141. |
Monopolist maximizes profit at the point where |
| A. | MC = AC |
| B. | MC = MR |
| C. | AC = AR |
| D. | MR = AR |
| Answer» B. MC = MR | |
| 142. |
At the point of equilibrium of a monopolist MC cuts MR curve |
| A. | From below |
| B. | from above |
| C. | at point of equality of AC and AR |
| D. | None |
| Answer» A. From below | |
| 143. |
A multiplant monopolist maximizes his profit at the point where: |
| A. | MR = MC1 |
| B. | MR = MC2 |
| C. | MR1 = MR2 |
| D. | MR = MC1 = MC2 |
| Answer» D. MR = MC1 = MC2 | |
| 144. |
Lerner Index is a measure of: |
| A. | Elasticity of demand |
| B. | Monopoly power |
| C. | Inequality |
| D. | None |
| Answer» B. Monopoly power | |
| 145. |
For a firm with monopoly power |
| A. | Price equals MC |
| B. | Price is less than MC |
| C. | Price exceeds MC |
| D. | None |
| Answer» C. Price exceeds MC | |
| 146. |
Railways is an example of : |
| A. | Simple monopoly |
| B. | differentiated monopoly |
| C. | Natural monopoly |
| D. | Monopsony |
| Answer» C. Natural monopoly | |
| 147. |
A market with only one buyer and one seller is called |
| A. | Oligopsony |
| B. | monopsony |
| C. | Bilateral monopoly |
| D. | None |
| Answer» C. Bilateral monopoly | |
| 148. |
Bilateral monopoly is a market with |
| A. | Single buyer |
| B. | Single seller |
| C. | Single buyer and single seller |
| D. | Few buyers and sellers |
| Answer» C. Single buyer and single seller | |
| 149. |
The dual pricing system of charging high price during peak time and low price during of peak time is called |
| A. | Double pricing |
| B. | Dual pricing |
| C. | kinked pricing |
| D. | peak load pricing |
| Answer» D. peak load pricing | |
| 150. |
Selling more than one product at a single price |
| A. | Dumping |
| B. | Bundling |
| C. | Discounting |
| D. | Off loading |
| Answer» B. Bundling | |
| 151. |
An international price discrimination |
| A. | Dumping |
| B. | Bundling |
| C. | Discounting |
| D. | Off loading |
| Answer» A. Dumping | |
| 152. |
The market structure which has large number of sellers selling differentiated product is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 153. |
The market structure which number of sellers is small with interdependence is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» D. Oligopoly | |
| 154. |
The condition of short run equilibrium under monopolistic competition is |
| A. | MC=MR |
| B. | AC=MR |
| C. | AC=AR |
| D. | AR=MR |
| Answer» A. MC=MR | |
| 155. |
Kinked demand curve explain which of the following features of oligopoly |
| A. | Selling cost |
| B. | Price rigidity |
| C. | Non price competition |
| D. | Product differentiation |
| Answer» B. Price rigidity | |
| 156. |
Demand curve of a firm under monopolistic competition is |
| A. | Parallel to X axis |
| B. | Parallel to Y axis |
| C. | Downward slopping |
| D. | Upward slopping |
| Answer» C. Downward slopping | |
| 157. |
Which of the following is not a feature of monopolistic competition? |
| A. | Homogenous product |
| B. | Large number of firms |
| C. | Freedom to entry and exit |
| D. | Differentiated product |
| Answer» A. Homogenous product | |
| 158. |
In the long run, a monopolistically competitive firm earn |
| A. | Abnormal profit |
| B. | loss |
| C. | Normal profit |
| D. | Differentiated profit |
| Answer» C. Normal profit | |
| 159. |
In the short run, a monopolistically competitive firm can have |
| A. | Abnormal profit |
| B. | loss |
| C. | Normal profit |
| D. | Any of the above are possible |
| Answer» D. Any of the above are possible | |
| 160. |
Selling cost is a feature of |
| A. | Monopolistic competition |
| B. | Perfect competition |
| C. | Monopoly |
| D. | Bilateral monopoly |
| Answer» A. Monopolistic competition | |
| 161. |
The concept of group equilibrium is related to |
| A. | Paul M sweezy |
| B. | Joan robinson |
| C. | E H Chamberline |
| D. | E L Edgeworth |
| Answer» C. E H Chamberline | |
| 162. |
The concept of kinked demand curve is related to |
| A. | Paul M sweezy |
| B. | Joan robinson |
| C. | E H Chamberline |
| D. | E L Edgeworth |
| Answer» A. Paul M sweezy | |
| 163. |
Refrigerator company is an example of |
| A. | Oligopoly |
| B. | Perfect competition |
| C. | Monopoly |
| D. | Bilateral monopoly |
| Answer» A. Oligopoly | |
| 164. |
Cross elasticity of demand under monopolistic competition is? |
| A. | Zero |
| B. | Highly elastic |
| C. | Highly inelastic |
| D. | infinite |
| Answer» A. Zero | |
| 165. |
The concept of group equilibrium is related to |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» C. Monopolistic competition | |
| 166. |
Excess capacity is a feature of equilibrium under |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» C. Monopolistic competition | |
| 167. |
Which of the following is an important form collusive oligopoly |
| A. | Bilateral monopoly |
| B. | Monopoly |
| C. | cartel |
| D. | Kinked Oligopoly |
| Answer» C. cartel | |
| 168. |
OPEC is an example of |
| A. | Bilateral monopoly |
| B. | Monopoly |
| C. | cartel |
| D. | Kinked Oligopoly |
| Answer» C. cartel | |
| 169. |
Comparing a monopoly and a competitive firm, the monopolist will |
| A. | produce less at a lower price |
| B. | produce more at a lower price |
| C. | produce less at a higher price |
| D. | produce less at a lower price |
| Answer» C. produce less at a higher price | |
| 170. |
A natural monopoly has a declining ________ over a large range of output |
| A. | long run marginal cost |
| B. | short run marginal cost |
| C. | long run average cost |
| D. | long run marginal cost |
| Answer» C. long run average cost | |
| 171. |
Which form of monopoly control is most advantageous to consumer? |
| A. | price controls |
| B. | quantity controls |
| C. | lump sum tax |
| D. | all the above |
| Answer» A. price controls | |
| 172. |
The market structure Perfect mobility of factors and products is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 173. |
The market structure with Perfect knowledge is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 174. |
The condition of perfect competition is fulfilled when |
| A. | Sellers are large in number |
| B. | Buyers are large in number |
| C. | Commodity produced is homogenous |
| D. | All the above |
| Answer» D. All the above | |
| 175. |
The following are conditions of perfect competition except |
| A. | Sellers are large in number |
| B. | Buyers are large in number |
| C. | Commodity produced is homogenous |
| D. | Commodity produced is differentiated |
| Answer» D. Commodity produced is differentiated | |
| 176. |
The following are conditions of perfect competition except |
| A. | Strong barriers to entry |
| B. | Sellers are large in number |
| C. | Commodity produced is Homogenous |
| D. | Buyers are large in number |
| Answer» A. Strong barriers to entry | |
| 177. |
The following are conditions of perfect competition except |
| A. | Sellers are large in number |
| B. | Single buyer |
| C. | Commodity produced is homogenous |
| D. | Freedom to Entry and exit |
| Answer» B. Single buyer | |
| 178. |
The condition of short run equilibrium under perfect competition is |
| A. | MC=MR |
| B. | AC=MR |
| C. | AC=AR |
| D. | AR=Selling cost |
| Answer» A. MC=MR | |
| 179. |
The large number of firms producing the same commodity ensure that the individual firm has no control over |
| A. | Price of the commodity |
| B. | The quantity of the commodity |
| C. | Both of the above |
| D. | None of the above |
| Answer» C. Both of the above | |
| 180. |
Individual firm has no control on the price of the commodity in the market is a condition of |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Bilateral monopoly |
| Answer» A. Perfect competition | |
| 181. |
In a Perfect competitive market |
| A. | Firm is the price giver and the industry is a price taker |
| B. | Firm is the price taker and the industry is a price giver |
| C. | Both are price makers |
| D. | Both are price takers |
| Answer» B. Firm is the price taker and the industry is a price giver | |
| 182. |
One of the essential conditions of perfect competition is |
| A. | Product Differentiation |
| B. | Multiplicity of prices for identical product at any one Time |
| C. | Many sellers and few buyers |
| D. | Only one price for identical goods at any one time |
| Answer» D. Only one price for identical goods at any one time | |
| 183. |
Under perfect market conditions the individual firm in the industry has control over the price of the product. |
| A. | Some |
| B. | Full |
| C. | No |
| D. | None of the above |
| Answer» C. No | |
| 184. |
The condition of short run equilibrium under perfect competition is |
| A. | MC=MR |
| B. | MC cuts MR from below |
| C. | MC is rising when it cuts AR |
| D. | All the above |
| Answer» D. All the above | |
| 185. |
Under perfect market conditions mobility of resources and products are |
| A. | Ensured |
| B. | Not ensured |
| C. | Not considered |
| D. | None of the above |
| Answer» A. Ensured | |
| 186. |
A firm under perfect competitions shall be in equilibrium when marginal cost will be equal to marginal revenue and marginal cost curve is still |
| A. | Declining |
| B. | Rising |
| C. | Constant |
| D. | None of the above |
| Answer» B. Rising | |
| 187. |
Cross elasticity of demand under Perfect competition is? |
| A. | Zero |
| B. | Infinitely elastic |
| C. | Highly elastic |
| D. | Highly inelastic |
| Answer» A. Zero | |
| 188. |
Which of the following is not a type of market structure? |
| A. | Competitive monopoly |
| B. | Oligopoly |
| C. | Perfect competition |
| D. | All of the above are types of market structures. |
| Answer» A. Competitive monopoly | |
| 189. |
If the market demand curve for a commodity has a negative slope then the market structure must be |
| A. | perfect competition |
| B. | monopoly |
| C. | imperfect competition |
| D. | The market structure cannot be determined from the information given |
| Answer» D. The market structure cannot be determined from the information given | |
| 190. |
If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a |
| A. | a monopolist |
| B. | an oligopolist |
| C. | a perfect competitor |
| D. | a monopolistic competitor |
| Answer» C. a perfect competitor | |
| 191. |
If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is |
| A. | a monopolist |
| B. | an oligopolist |
| C. | a perfect competitor |
| D. | a monopolistic competitor |
| Answer» A. a monopolist | |
| 192. |
If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is |
| A. | a monopolist |
| B. | an oligopolist |
| C. | a perfect competitor |
| D. | a monopolistic competitor |
| Answer» D. a monopolistic competitor | |
| 193. |
If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run resource mobility, then the firm is |
| A. | a monopolist |
| B. | an oligopolist |
| C. | a perfect competitor |
| D. | a monopolistic competitor |
| Answer» B. an oligopolist | |
| 194. |
If one perfectly competitive firm increases its level of output, market supply |
| A. | will increase and market price will fall |
| B. | will increase and market price will rise |
| C. | and market price will both remain constant |
| D. | will decrease and market price will rise |
| Answer» C. and market price will both remain constant | |
| 195. |
Which of the following markets comes close to satisfying the assumptions of a perfectly competitive market structure? |
| A. | The stock market |
| B. | The market for agricultural commodities such as wheat or corn |
| C. | The market for petroleum and natural gas |
| D. | All of the above come close to satisfying the assumptions of perfect competition |
| Answer» D. All of the above come close to satisfying the assumptions of perfect competition | |
| 196. |
A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is |
| A. | greater than average total cost |
| B. | less than average total cost |
| C. | greater than average variable cost |
| D. | less than average variable cost |
| Answer» D. less than average variable cost | |
| 197. |
The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if |
| A. | P = 6 and Q = 9 |
| B. | P = 5 and Q = 2 |
| C. | P = 4 and Q = 4 |
| D. | P = 3 and Q = 6 |
| Answer» D. P = 3 and Q = 6 | |
| 198. |
Which of the following is a barrier to entry that typically results in monopoly? |
| A. | The firm controls the entire supply of a raw material |
| B. | Production of the industry\s product is subject to economies of scale over a broad range of output |
| C. | Production of the industry\s product requires a large initial capital investment |
| D. | The firm holds an exclusive government franchise |
| Answer» C. Production of the industry\s product requires a large initial capital investment | |
| 199. |
In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is |
| A. | greater than average total cost |
| B. | less than average total cost |
| C. | greater than average variable cost |
| D. | less than average variable cost |
| Answer» D. less than average variable cost | |
| 200. |
A natural monopoly refers to a monopoly that is defended from direct competition by |
| A. | economies of scale over a broad range of output |
| B. | a government franchise |
| C. | control over a vital input |
| D. | a patent or copyright |
| Answer» A. economies of scale over a broad range of output | |
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