McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Cost Accounting .
| 301. |
If the supply of a product remain same with the increase in price, the possible reasons can be |
| A. | Apprehension of further price hike |
| B. | Limited production facility |
| C. | Commodity being a rare commodity |
| D. | All the three |
| Answer» D. All the three | |
| 302. |
In a market economy equilibrium price is reached at |
| A. | Point of interaction of aggregate demand and aggregate supply curve |
| B. | At the top of demand curve |
| C. | Midpoint of demand curve |
| D. | Midpoint of supply curve |
| Answer» A. Point of interaction of aggregate demand and aggregate supply curve | |
| 303. |
Which of the following is/are an essential feature of the market |
| A. | Buyers |
| B. | Sellers |
| C. | Price |
| D. | All the three |
| Answer» D. All the three | |
| 304. |
Which of these is not an essential feature of a market |
| A. | Buyers |
| B. | Sellers |
| C. | Commodity |
| D. | Building with loading and unloading facilities |
| Answer» D. Building with loading and unloading facilities | |
| 305. |
Which of the following is/are the characteristic of a monopolistically competitive market |
| A. | No restriction on exit and entry |
| B. | Many sellers |
| C. | Product differentiation |
| D. | All the three |
| Answer» D. All the three | |
| 306. |
If there is simultaneous fall in consumers disposal income as well number of suppliers of a product in the market, the |
| A. | Equilibrium quantity will decrease |
| B. | Equilibrium price will decrease |
| C. | Equilibrium price will go up |
| D. | Equilibrium quantity will increase |
| Answer» A. Equilibrium quantity will decrease | |
| 307. |
Very short period is the market condition where the supply remain perfectly |
| A. | Elastic |
| B. | Inelastic |
| C. | Unity elastic |
| D. | Elasticity less than 1 |
| Answer» B. Inelastic | |
| 308. |
In the long run price is governed by …………. |
| A. | Cost of Production |
| B. | Demand supply forces |
| C. | Marginal utility |
| D. | None |
| Answer» A. Cost of Production | |
| 309. |
Adam Smith called price mechanism as |
| A. | Invisible hands |
| B. | Consumer sovereignty |
| C. | Consumer liberty |
| D. | Price regulation |
| Answer» A. Invisible hands | |
| 310. |
In the long run a firm in perfect competition earns |
| A. | Normal profit only |
| B. | Abnormal profit |
| C. | Average profit of past five years |
| D. | 12.33% profit on capital employed |
| Answer» A. Normal profit only | |
| 311. |
The practice of selling same product to different persons at different price is called |
| A. | Price discrimination |
| B. | Price rigging |
| C. | Price manipulation |
| D. | Price Justification |
| Answer» A. Price discrimination | |
| 312. |
Which of these is not a cause of price discrimination |
| A. | Ignorance of consumer |
| B. | Place differentiation |
| C. | Variation in quality |
| D. | Tax differentiation |
| Answer» D. Tax differentiation | |
| 313. |
If both the disposal income as well as number of suppliers of a product rises, the equilibrium |
| A. | Price remain same |
| B. | Price will go up |
| C. | Quantity will go up |
| D. | Quantity will go down |
| Answer» C. Quantity will go up | |
| 314. |
Simultaneous increase in demand and quantity supplied will |
| A. | Increase in equilibrium price and quantity |
| B. | Decrease equilibrium price and quantity |
| C. | Increase equilibrium price but decrease quantity |
| D. | Decrease equilibrium price but increase quantity |
| Answer» A. Increase in equilibrium price and quantity | |
| 315. |
A firm faces the shut down situation when |
| A. | Price is less than average variable cost |
| B. | Price is more than the average variable cost |
| C. | Price is equal to fixed cost |
| D. | Price is more than the average fixed cost |
| Answer» A. Price is less than average variable cost | |
| 316. |
If a firm shut down at a level when AVC > Price, the firm restricts its losses to |
| A. | Total fixed cost |
| B. | Average fixed cost |
| C. | Variable cost |
| D. | Average variable cost |
| Answer» A. Total fixed cost | |
| 317. |
Fixed costs are |
| A. | Avoidable in the short run |
| B. | Sunk cost in the short run |
| C. | Sunk cost in the long run |
| D. | Unavoidable in the long run |
| Answer» B. Sunk cost in the short run | |
| 318. |
When the price is less than the average variable cost, the firm should …………. |
| A. | Continue to operate till the market recover |
| B. | Shut down its operation for the time being |
| C. | Retrench workers and pay them compensation |
| D. | Clear the existing stock at a price less than the prevailing price to beat the competitors |
| Answer» B. Shut down its operation for the time being | |
| 319. |
Breakeven point refers to the situation when |
| A. | Total revenue is equal to total cost |
| B. | Total revenue is more than total cost |
| C. | Total revenue is less than total cost |
| D. | Total revenue is equal to total variable cost |
| Answer» A. Total revenue is equal to total cost | |
| 320. |
A firm that break even after all the economic costs are paid in earning |
| A. | Economic profit |
| B. | Accounting profit |
| C. | Normal profit |
| D. | Super normal profit |
| Answer» C. Normal profit | |
| 321. |
A firm that makes profit in excess of normal profit is earning |
| A. | Economic profit |
| B. | Costing profit |
| C. | Normal profit |
| D. | Super normal profit |
| Answer» D. Super normal profit | |
| 322. |
A natural monopoly has declining – over large range of output |
| A. | Long run average cost |
| B. | Short run average cost |
| C. | Long run total cost |
| D. | Long run marginal cost |
| Answer» A. Long run average cost | |
| 323. |
A monopoly based on sole state ownership of production and distribution network is known as |
| A. | Natural monopoly |
| B. | Technological monopoly |
| C. | Government monopoly |
| D. | Geographical monopoly |
| Answer» C. Government monopoly | |
| 324. |
The market state that satisfy all the essential features of a perfect competitive market except identity of product is known as |
| A. | Oligopoly |
| B. | Duopoly |
| C. | Monopoly |
| D. | Monopolistic competition |
| Answer» D. Monopolistic competition | |
| 325. |
…………….. may start a price war in order to grab a larger share of market |
| A. | Oligopoly |
| B. | Duopolies |
| C. | Monopolist |
| D. | Monopolistic competition |
| Answer» A. Oligopoly | |
| 326. |
In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes |
| A. | Profits and new firms join the market |
| B. | Profit and bar entry to new firms |
| C. | Makes losses and exit the market |
| D. | Quick profit and disappears |
| Answer» A. Profits and new firms join the market | |
| 327. |
Which of these is associated with a monopolistic competitive market – |
| A. | Product differentiation |
| B. | Homogeneous Product |
| C. | Normal in short run |
| D. | Single buyer |
| Answer» C. Normal in short run | |
| 328. |
The ideal level of operation for a pure monopoly firm is the level where |
| A. | TR and STC curve are parallel to each other |
| B. | TR = TC |
| C. | TR = Total variable cost |
| D. | TR is less than STC |
| Answer» A. TR and STC curve are parallel to each other | |
| 329. |
When the Demand curve of a pure monopoly firm is elastic, MR will be |
| A. | Negative |
| B. | Positive |
| C. | Zero |
| D. | Any of these |
| Answer» B. Positive | |
| 330. |
In short run a monopolistic competition firm will be in equilibrium where |
| A. | MR = curve intersect SMC curve from above |
| B. | MR curve intersect SMC curve from below |
| C. | MC = AR |
| D. | MR curve intersect SMC from below and P is equal to or more than AVC |
| Answer» D. MR curve intersect SMC from below and P is equal to or more than AVC | |
| 331. |
In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to |
| A. | Price discrimination |
| B. | Cost effectiveness |
| C. | Banned entry of new firms |
| D. | Sales promotion |
| Answer» C. Banned entry of new firms | |
| 332. |
In the short run an oligopolistic firm will |
| A. | Make profits |
| B. | Incur losses |
| C. | Just break even |
| D. | Any of these three are possible |
| Answer» D. Any of these three are possible | |
| 333. |
A monopoly firm makes more profit because |
| A. | It has ability to choose among price and output combination |
| B. | It can discriminate price |
| C. | It leave the consumer with no consumer surplus |
| D. | it acts as a market leader |
| Answer» A. It has ability to choose among price and output combination | |
| 334. |
Super normal profits occurs when |
| A. | Average revenue is more than average cost |
| B. | Total revenue is maximum |
| C. | Total cost is minimum |
| D. | MC is equal to MR |
| Answer» A. Average revenue is more than average cost | |
| 335. |
…………… has excess production capacity in the long run |
| A. | Perfect competition market |
| B. | Monopolistic competition market |
| C. | Oligopolistic market |
| D. | None |
| Answer» B. Monopolistic competition market | |
| 336. |
Oligopoly market is known for …………….. |
| A. | Price flexibility |
| B. | Price rigidity |
| C. | Price discrimination |
| D. | All the three |
| Answer» B. Price rigidity | |
| 337. |
In a competitive market ………. is the price maker |
| A. | Firm |
| B. | Industry |
| C. | Consumer |
| D. | Trade association |
| Answer» B. Industry | |
| 338. |
In a competitive market ……………….. is the price taker |
| A. | Firm |
| B. | Industry |
| C. | Consumer |
| D. | Trade association |
| Answer» A. Firm | |
| 339. |
A Monopoly‟s demand curve is |
| A. | Same as its average revenue curve |
| B. | Same as its supply curve |
| C. | Same as its cost curve |
| D. | Same as that of the factor inputs |
| Answer» A. Same as its average revenue curve | |
| 340. |
Which of them is a characteristic of a price taker |
| A. | MR = Price |
| B. | AR = MR |
| C. | TR = PXQ |
| D. | All the three |
| Answer» D. All the three | |
| 341. |
In question No. 348. What is the equilibrium quantity of demand and supply |
| A. | 2525 |
| B. | 2600 |
| C. | 2650 |
| D. | 2725 |
| Answer» B. 2600 | |
| 342. |
Under perfect market conditions an Industry is said to be in equilibrium where |
| A. | Total output is equal to total demand |
| B. | Profit is maximum |
| C. | Where the total revenue is maximum |
| D. | Where total average cost is the minimum |
| Answer» A. Total output is equal to total demand | |
| 343. |
Under perfect market conditions a firm is said to be in equilibrium where |
| A. | Total output is equal to total demand |
| B. | Profit is the maximum |
| C. | Where the total revenue is maximum |
| D. | Where total average cost is the minimum |
| Answer» B. Profit is the maximum | |
| 344. |
Under perfect market conditions the supply curve of a firm is represented by |
| A. | MC curve |
| B. | MR curve |
| C. | AR curve |
| D. | AC curve |
| Answer» A. MC curve | |
| 345. |
Long-term equilibrium of an Industry under a perfectly market conditions in achieved when |
| A. | All the firms are earning normal profit |
| B. | All the firms are in equilibrium |
| C. | There is no further entry or exit of firms from the industry |
| D. | All the three |
| Answer» D. All the three | |
| 346. |
Which of the following statement is true |
| A. | In perfect competition Average and Marginal revenue are identical |
| B. | In perfect competition Average and Marginal cost are identical |
| C. | In perfect competition Average price and Marginal cost are identical |
| D. | In perfect competition only normal profit can be earned by a firm |
| Answer» A. In perfect competition Average and Marginal revenue are identical | |
| 347. |
For a monopoly firm market demand curve is |
| A. | Marginal revenue curve itself |
| B. | Average Revenue curve itself |
| C. | Marginal cost curve |
| D. | None |
| Answer» B. Average Revenue curve itself | |
| 348. |
Which of the following statement is true |
| A. | For a monopoly firm AR can be zero |
| B. | For a monopoly firm MR can be zero or even negative |
| C. | For monopoly firm MR and AR are identical |
| D. | For a monopoly firm MR and AR are positive sloped |
| Answer» B. For a monopoly firm MR can be zero or even negative | |
| 349. |
For a monopoly firm the MR Curve |
| A. | Overlaps AR curve |
| B. | Is above the AR curve |
| C. | Lies half way between AR curve and the Y axis |
| D. | Is same as AR curve |
| Answer» C. Lies half way between AR curve and the Y axis | |
| 350. |
A monopoly is characterized by |
| A. | Limited entry and exit opportunity |
| B. | Single supplier |
| C. | Few customers |
| D. | All the three |
| Answer» A. Limited entry and exit opportunity | |
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