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) .
| 201. |
When a perfectly competitive industry is in long-run equilibrium, all firms in the industry |
| A. | earn zero economic profits |
| B. | produce a level of output where short-run marginal cost is equal to short-run average total cost |
| C. | produce a level of output where long-run marginal cost is equal to long-run average cost |
| D. | All of the above are correct |
| Answer» D. All of the above are correct | |
| 202. |
The short-run supply curve of a perfectly competitive firm |
| A. | is equal to that portion of the short-run marginal cost curve that is above the average variable cost curve |
| B. | is equal to that portion of the short-run marginal cost curve that is above the average total cost curve |
| C. | is equal to that portion of the short-run average total cost curve that is above the average variable cost curve |
| D. | None of the above is correct |
| Answer» A. is equal to that portion of the short-run marginal cost curve that is above the average variable cost curve | |
| 203. |
A monopolized market is in long-run equilibrium when |
| A. | zero economic profit is earned by the monopolist |
| B. | production takes place where price is equal to long-run marginal cost and long-run average cost |
| C. | production takes place where long-run marginal cost is equal to marginal revenue and price is not below long-run average cost |
| D. | All of the above are correct |
| Answer» C. production takes place where long-run marginal cost is equal to marginal revenue and price is not below long-run average cost | |
| 204. |
A monopolist produces 14,000 units of output and charges Rs.14 per unit. Its marginal revenue is Rs.8, its marginal cost is Rs.7 and rising, its average total cost is Rs.10, and its average variable cost is Rs.9. The monopolist should |
| A. | increase curve output, which will result in an increase in the firm\s positive economic profit |
| B. | increase output, which will reduce the firm\s economic losses |
| C. | shut down, which will reduce the firm\s economic losses |
| D. | decrease output, which will result in an increase in the firm\s positive economic |
| Answer» A. increase curve output, which will result in an increase in the firm\s positive economic profit | |
| 205. |
Which of the following types of firms is likely to be a monopolistic competitor? |
| A. | A local telephone company |
| B. | An automobile manufacturer |
| C. | A restaurant |
| D. | All of the above |
| Answer» C. A restaurant | |
| 206. |
Which of the following is a differentiated product? |
| A. | A hamburger |
| B. | A shirt |
| C. | An automobile |
| D. | All of the above |
| Answer» D. All of the above | |
| 207. |
Which of the following is a characteristic of monopolistic competition? |
| A. | Few sellers |
| B. | A differentiated product |
| C. | Easy entry into and exit from the industry |
| D. | All of the above |
| Answer» A. Few sellers | |
| 208. |
The demand faced by a monopolistically competitive firm is |
| A. | perfectly elastic |
| B. | elastic |
| C. | unit elastic |
| D. | inelastic |
| Answer» B. elastic | |
| 209. |
If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm |
| A. | should shut down |
| B. | should decrease output, but should not shut down |
| C. | should increase output |
| D. | None of the above is correct |
| Answer» D. None of the above is correct | |
| 210. |
Product variation refers to |
| A. | an activity undertaken by a firm to increase demand |
| B. | a problem with quality control that tends to decrease demand |
| C. | an activity undertaken by a firm to make demand more price inelastic |
| D. | None of the above |
| Answer» A. an activity undertaken by a firm to increase demand | |
| 211. |
Which of the following is a criticism of the theory of monopolistic competition? |
| A. | It is difficult to define a monopolistically competitive market and to determine the firms and products that comprise it |
| B. | When product differentiation is slight, each firm\s demand curve is nearly horizontal so the perfectly competitive solution provides an adequate approximation to the monopolistically competitive solution |
| C. | When there are strong brand preferences and few producers of many differentiated products, or when there are many producers but only a few compete as rivals for any given consumer, then the oligopoly solution provides an adequate approximation to the monopolistically competitive solution |
| D. | All of the above are correct |
| Answer» D. All of the above are correct | |
| 212. |
Which of the following industries is most likely to be monopolistically competitive? |
| A. | The automobile industry |
| B. | The steel industry |
| C. | The car repair industry |
| D. | The electrical generating industry |
| Answer» C. The car repair industry | |
| 213. |
Marginal revenue is equal to price for which one of the following types of market structure? |
| A. | Monopoly |
| B. | Perfect competition |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» B. Perfect competition | |
| 214. |
Monopoly market is : |
| A. | Single seller market |
| B. | single buyer market |
| C. | single buyer and seller |
| D. | None |
| Answer» A. Single seller market | |
| 215. |
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 | |
| 216. |
Lerner Index is a measure of: |
| A. | Elasticity of demand |
| B. | Monopoly power |
| C. | Inequality |
| Answer» B. Monopoly power | |
| 217. |
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 | |
| 218. |
The marker structure which have very large number of sellers selling Identical products is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 219. |
The marker structure with Perfect mobility of factors and products is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 220. |
The marker structure with Perfect knowledge is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 221. |
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 | |
| 222. |
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 | |
| 223. |
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» D. Both are price takers | |
| 224. |
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 | |
| 225. |
The marker structure which have large number of sellers selling differentiated product is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» C. Monopolistic competition | |
| 226. |
The marker structure in which number of sellers is small with interdependence is called |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» D. Oligopoly | |
| 227. |
The cost incurred to alter the position or slope of demand curve is known as |
| A. | Marginal cost |
| B. | Selling cost |
| C. | Alternate cost |
| D. | Additional cost |
| Answer» B. Selling cost | |
| 228. |
Which of the following is a form collusive oligopoly |
| A. | Bilateral monopoly |
| B. | Monopoly |
| C. | cartel |
| D. | Kinked Oligopoly |
| Answer» C. cartel | |
| 229. |
In the long run, which of the following is applicable to a firm under monopolistic competition |
| A. | AR = AC |
| B. | AR > AC |
| C. | AR < AC |
| D. | AR = MC |
| Answer» A. AR = AC | |
| 230. |
A discriminating monopolist will charge a higher price from which group of customers? |
| A. | Group with more elastic |
| B. | Group with less elastic |
| C. | Group with Unitary Elastic |
| D. | Group with Infinitely Elastic |
| Answer» B. Group with less elastic | |
| 231. |
Perfect price discrimination means that every customer ____________ |
| A. | buys the same amount |
| B. | pays the same price |
| C. | contributes the same revenue |
| D. | pays what she thinks the product is worth |
| Answer» D. pays what she thinks the product is worth | |
| 232. |
Supernormal profit refers to |
| A. | High proportion of net profit |
| B. | Minimum necessary profit to induce an entrepreneur to remain in business |
| C. | Unexpectedly high Profit |
| D. | Residual surplus |
| Answer» A. High proportion of net profit | |
| 233. |
Which one of the following is related to the commodity money |
| A. | Stones |
| B. | Cattles |
| C. | Grains |
| D. | All of the above |
| Answer» D. All of the above | |
| 234. |
Which of the following is not related to commodity money |
| A. | All commodities were not uniform in quality |
| B. | It is difficult to store and prevent the loss of value |
| C. | They lacked portability |
| D. | There was no problem of coincidence of wants |
| Answer» C. They lacked portability | |
| 235. |
Find the odd man out with reference to money |
| A. | Copper |
| B. | Silver |
| C. | . Cattles |
| D. | Gold |
| Answer» D. Gold | |
| 236. |
Match the following A B
|
| A. | (i) (ii) (iii) (iv) |
| B. | (i) (iii) (ii) (iv) |
| C. | (iv) (iii) (ii) (i) |
| D. | (iv) (iii) (i) (ii) |
| Answer» D. (iv) (iii) (i) (ii) | |
| 237. |
Which of the following is not correctly matched |
| A. | Bows and arrows – used as money in the hunting society |
| B. | Cattles – used as money in the pastoral society |
| C. | Grains – used as money by the agricultural society |
| D. | Gold and silver coins – used as money in which the face value is greater than its |
| Answer» C. Grains – used as money by the agricultural society | |
| 238. |
Assertion (A): Necessity led to the invention of money Reason(R) : Barter system failed to perform the major functions of money |
| A. | (A) is true but (R) is false. |
| B. | Both (A) and (R) are false |
| C. | Both (A) and (R) are true and (R) is the correct explanation of (A) |
| D. | Both (A) and (R) are true but (R) is not the correct explanation of (A) |
| Answer» D. Both (A) and (R) are true but (R) is not the correct explanation of (A) | |
| 239. |
Which one of the following is an example of “fiat money” |
| A. | Precious stones |
| B. | Grains |
| C. | Gold coins |
| D. | Currency notes |
| Answer» D. Currency notes | |
| 240. |
In the case of paper currency |
| A. | Intrinsic value and face value are equal |
| B. | Intrinsic value is less than face value |
| C. | Intrinsic value is greater than face value |
| D. | None of the above |
| Answer» B. Intrinsic value is less than face value | |
| 241. |
The most liquid form of all assets is |
| A. | Bonds |
| B. | . Debentures |
| C. | Bill of exchange |
| D. | Currency notes |
| Answer» D. Currency notes | |
| 242. |
In India the standard money is |
| A. | Gold coins |
| B. | Rupee |
| C. | Dollar |
| D. | Paisa |
| Answer» B. Rupee | |
| 243. |
In the case of a ‘full bodied money’ |
| A. | Intrinsic value is less than face value |
| B. | Intrinsic value is equal to face value |
| C. | Intrinsic value is greater than face value |
| D. | None of the above |
| Answer» B. Intrinsic value is equal to face value | |
| 244. |
In the case of a ‘token money’ |
| A. | Face value is less than the metal value |
| B. | Face value is equal to the metal value |
| C. | Face value is greater than the metal value |
| D. | None of the above |
| Answer» C. Face value is greater than the metal value | |
| 245. |
Demand for money arises from |
| A. | Money acts as a medium of exchange |
| B. | Money acts as a store of value |
| C. | Both A and B |
| D. | Neither A nor B |
| Answer» C. Both A and B | |
| 246. |
Cost – push inflation arises due to |
| A. | Rise in wages |
| B. | Rise in profit |
| C. | Rise in the prices of raw materials |
| D. | All of the above |
| Answer» D. All of the above | |
| 247. |
Which of the following is a concept of ‘broad money’ |
| A. | M1 |
| B. | M2 |
| C. | M3 |
| D. | All of the above |
| Answer» C. M3 | |
| 248. |
In the Quantity Theory of Money Fischer states that, while other things remains the same, |
| A. | Price level varies directly with the quantity of money |
| B. | Price level varies inversely with the quantity of money |
| C. | Value of money varies directly with the quantity of money |
| D. | None of the above |
| Answer» A. Price level varies directly with the quantity of money | |
| 249. |
Inflation is a situation where |
| A. | Prices are falling |
| B. | Value of money is falling |
| C. | Value of money is rising |
| D. | All of the above |
| Answer» C. Value of money is rising | |
| 250. |
In the case of ‘creeping inflation’ prices are rising at |
| A. | Less than 3% per month |
| B. | Less than 3% per annum |
| C. | Around 5% per month |
| D. | Around 5% per annum |
| Answer» C. Around 5% per month | |
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