McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Arts in Economics (BA Economics) .
| 151. |
In an input-output matrix, the principal diagonal of this matrix represents the amount of input each industry takes from ___output. |
| A. | other industry’s |
| B. | government sector’s |
| C. | household sector’s |
| D. | its own output |
| Answer» D. its own output | |
| 152. |
P = a – bQ is the demand cure of a monopolist. Which of the following statements is true? |
| A. | AR & MR are equal |
| B. | The rate of decline of MR is twice the rate of decline of AR |
| C. | The demand curve has unit elasticity |
| D. | slope of MR is zero. |
| Answer» B. The rate of decline of MR is twice the rate of decline of AR | |
| 153. |
The best or optimum level of output for a perfectly competitive firm is given by the point: |
| A. | MR = AC |
| B. | MR = MC |
| C. | MR exceeds MC by the greater amount |
| D. | MR = MC and MC is rising |
| Answer» D. MR = MC and MC is rising | |
| 154. |
In a monopoly, marginal revenue is: |
| A. | equal to AR |
| B. | less than AR |
| C. | more than AR |
| D. | initially less than AR then more than AR |
| Answer» B. less than AR | |
| 155. |
In monopoly, when the demand curve is elastic, MR is: |
| A. | 1 |
| B. | 0 |
| C. | positive |
| D. | negative |
| Answer» C. positive | |
| 156. |
In monopoly, if p = Rs. 10 at the point on the demand curve where η = 0.5, MR is: |
| A. | 5 |
| B. | 0 |
| C. | −1 |
| D. | −10 |
| Answer» D. −10 | |
| 157. |
If the demand curve for a monopolist is P = 100 -20Q, then the marginal revenue of that firm is given by the equation: |
| A. | MR = 200 − 20Q |
| B. | MR = 50 − 40Q |
| C. | MR = 100 − 20Q |
| D. | MR = 100 − 40Q |
| Answer» D. MR = 100 − 40Q | |
| 158. |
If the demand facing a monopolist is P = 100 − 10Q and marginal cost is constant at 20, then the profit maximizing price and quantity for this monopolist are: |
| A. | P = 60 and Q = 4 |
| B. | P = 20 and Q = 8 |
| C. | P = 90 and Q = 10 |
| D. | P = 4 and Q = 60 |
| Answer» A. P = 60 and Q = 4 | |
| 159. |
A profit-maximizing monopoly firm with a demand curve P = 50 − Q is a perfect pricediscriminator. If it has marginal costs of Rs. 10/unit and fixed costs of Rs. 30, it will produce _____ units of output and will make______ profit. |
| A. | 40; Rs. 400 |
| B. | 40; Rs. 770 |
| C. | 20; Rs. 370 |
| D. | 20; Rs. 400 |
| Answer» B. 40; Rs. 770 | |
| 160. |
A price discriminating Monopolist is considered more efficient than a single prices monopolist because: |
| A. | a price discriminating Monopolist knows its consumers better |
| B. | a price discriminating Monopolist can set prices more efficiently |
| C. | a price discriminating Monopolist produces a higher level of output |
| D. | a price discriminating Monopolist can produce it’s output at a lower cost |
| Answer» C. a price discriminating Monopolist produces a higher level of output | |
| 161. |
One difference between perfect competition and monopolistic competition is that: |
| A. | In perfect competition, the products are slightly differentiated between firms |
| B. | There are a larger number of firms in monopolistic competition |
| C. | There are a smaller number of firms in perfectly competitive industries |
| D. | Firms in monopolistic competition have some degree of market power |
| Answer» D. Firms in monopolistic competition have some degree of market power | |
| 162. |
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 | |
| 163. |
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 = |
| B. | P = 3 and Q = 6 |
| C. | P = 4 and Q = 4 |
| D. | P = 5 and Q = 2 |
| Answer» B. P = 3 and Q = 6 | |
| 164. |
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. | less than average variable cost |
| B. | greater than average variable cost. |
| C. | less than average total cost |
| D. | greater than average total cost |
| Answer» A. less than average variable cost | |
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