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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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