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) .
| 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 | |
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