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) .
| 301. |
Above the BP curve BoP is: |
| A. | surplus |
| B. | Deficit |
| C. | Either Surplus or Deficit |
| D. | None. |
| Answer» A. surplus | |
| 302. |
When there is Zero or No capital mobility the BP curve is: |
| A. | Negative |
| B. | positive |
| C. | Vertical |
| D. | Horizontal |
| Answer» C. Vertical | |
| 303. |
When there is High capital mobility the BP curve is: |
| A. | Negative |
| B. | positive |
| C. | Vertical |
| D. | Horizontal |
| Answer» D. Horizontal | |
| 304. |
Which policy is recommended under flexible exchange rate system: |
| A. | No policy is needed |
| B. | Contractionary policy |
| C. | expansionary monetary policy |
| D. | Any policy. |
| Answer» C. expansionary monetary policy | |
| 305. |
Khan’s multiplier is known as: |
| A. | investment multiplier |
| B. | employment multiplier |
| C. | Foreign trade multiplier |
| D. | Saving multiplier |
| Answer» B. employment multiplier | |
| 306. |
Keynes’s multiplier is known as: |
| A. | investment multiplier |
| B. | employment multiplier |
| C. | Foreign trade multiplier |
| D. | Saving multiplier |
| Answer» A. investment multiplier | |
| 307. |
The foreign trade multiplier also known as the: |
| A. | Acceleration |
| B. | employment multiplier |
| C. | Income multiplier |
| D. | export multiplier . |
| Answer» D. export multiplier . | |
| 308. |
Investment Multiplier explains measures the change income as result of change in: |
| A. | Saving |
| B. | Wealth |
| C. | Employment |
| D. | Investment. |
| Answer» C. Employment | |
| 309. |
Under perfectly competitive market an individual seller is a |
| A. | Price taker |
| B. | Price maker |
| C. | Individual seller can influence the price |
| D. | None of the above |
| Answer» A. Price taker | |
| 310. |
Uniform price is a feature of |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» A. Perfect competition | |
| 311. |
Which of the following is not a feature of a perfectly competitive market |
| A. | Large number of buyers and sellers |
| B. | Homogeneous product |
| C. | Group behaviour |
| D. | Perfect competition |
| Answer» C. Group behaviour | |
| 312. |
A perfectly competitive firm gets only normal profit when |
| A. | MC = MR |
| B. | AC = AR |
| C. | AC < AR |
| D. | MC = AR |
| Answer» B. AC = AR | |
| 313. |
Which one of the following is a feature of a perfect competition |
| A. | Group behavior |
| B. | Selling cost |
| C. | Homogeneous product |
| D. | Differentiated product |
| Answer» C. Homogeneous product | |
| 314. |
Average revenue curve under perfect competition is |
| A. | Upward sloping |
| B. | Downward sloping |
| C. | Horizontal straight line |
| D. | Vertical straight line |
| Answer» C. Horizontal straight line | |
| 315. |
Marginal revenue curve under perfect competition is |
| A. | Upward sloping |
| B. | Downward sloping |
| C. | Horizontal straight line |
| D. | Vertical straight line |
| Answer» C. Horizontal straight line | |
| 316. |
Average revenue curve under imperfect competition is |
| A. | Upward sloping |
| B. | Downward sloping |
| C. | Horizontal straight line |
| D. | Vertical straight line |
| Answer» D. Vertical straight line | |
| 317. |
Marginal revenue curve under imperfect competition is |
| A. | Upward sloping |
| B. | Downward sloping |
| C. | Horizontal straight line |
| D. | Vertical straight line |
| Answer» D. Vertical straight line | |
| 318. |
Perfect competition prevails when the demand for the output of each producer is |
| A. | Elastic |
| B. | Perfectly elastic |
| C. | Inelastic |
| D. | Perfectly inelastic |
| Answer» D. Perfectly inelastic | |
| 319. |
Equilibrium price is determined under perfect competition by |
| A. | The market demand |
| B. | The market supply |
| C. | The interaction between market demand and market supply |
| D. | None of the above |
| Answer» C. The interaction between market demand and market supply | |
| 320. |
In the market period, market supply curve is |
| A. | Perfectly elastic |
| B. | Perfectly inelastic |
| C. | Elastic |
| D. | Inelastic |
| Answer» B. Perfectly inelastic | |
| 321. |
Given the supply of a commodity, in the market period, the price of a 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 | |
| 322. |
Total profits are maximized where |
| A. | TR equals TC |
| B. | TR curve and TC curve are parallel |
| C. | TR curve and TC curves are parallel and TC exceeds TR |
| D. | TR curve and TC curves are parallel and TR exceeds TC |
| Answer» D. TR curve and TC curves are parallel and TR exceeds TC | |
| 323. |
The equality between MC and MR is |
| A. | A necessary condition for equilibrium of the firm under perfect condition |
| B. | A sufficient condition for equilibrium of the firm under perfect competition |
| C. | A necessary but not sufficient condition for equilibrium of the firm under perfect condition |
| D. | A necessary and sufficient condition for equilibrium of the firm under perfect condition |
| Answer» C. A necessary but not sufficient condition for equilibrium of the firm under perfect condition | |
| 324. |
In the short-run, a competitive firm can earn |
| A. | Normal profit |
| B. | Super normal profit |
| C. | Loss |
| D. | Either A or B or C depending |
| Answer» D. Either A or B or C depending | |
| 325. |
If price is equal to average cost, in the short-run, the competitive firm can earn |
| A. | Only normal profit |
| B. | Super normal profit |
| C. | Loss |
| D. | All of the above |
| Answer» A. Only normal profit | |
| 326. |
If price is greater than average cost, in the short-run, the competitive firm can earn |
| A. | Normal profit |
| B. | Super normal profit |
| C. | Loss |
| D. | All of the above |
| Answer» B. Super normal profit | |
| 327. |
If price is less than average cost, in the short-run, the competitive firm can earn |
| A. | Normal profit |
| B. | Super normal profit |
| C. | Loss |
| D. | All of the above |
| Answer» C. Loss | |
| 328. |
Break-even point is a point where price is equal to |
| A. | AC |
| B. | AVC |
| C. | AFC |
| D. | MC |
| Answer» A. AC | |
| 329. |
Shut-down point is a point where price is equal to |
| A. | AC |
| B. | AVC |
| C. | AFC |
| D. | MC |
| Answer» B. AVC | |
| 330. |
In the long run, a competitive firm can earn |
| A. | Normal profit |
| B. | Super normal profit |
| C. | Loss |
| D. | Any of the above |
| Answer» A. Normal profit | |
| 331. |
The importance of time element in price determination was firstly analyzed by |
| A. | Adam smith |
| B. | Alfred Marshall |
| C. | David Ricardo |
| D. | J M Keynes |
| Answer» B. Alfred Marshall | |
| 332. |
In the short-period, |
| A. | All factors are fixed |
| B. | Some factors are fixed and others are variable |
| C. | All factors are variable |
| D. | None of the above |
| Answer» B. Some factors are fixed and others are variable | |
| 333. |
In the long-period, |
| A. | All factors are fixed |
| B. | Some factors are fixed and others are variable |
| C. | All factors are variable |
| D. | None of the above |
| Answer» C. All factors are variable | |
| 334. |
At the optimum short-run level of output, the firm will be |
| A. | Maximizing total profit |
| B. | Minimizing total losses |
| C. | Either maximizing total profit or minimizing total losses |
| D. | Maximizing profit per unit |
| Answer» C. Either maximizing total profit or minimizing total losses | |
| 335. |
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 | |
| 336. |
Monopolistic competition is characterized by |
| A. | Few firms’ selling differentiated products |
| B. | Many firms selling homogeneous product |
| C. | Few firms selling homogeneous product |
| D. | Many firms selling differentiated products |
| Answer» D. Many firms selling differentiated products | |
| 337. |
The theory of monopolistic competition was popularized by |
| A. | Marshall |
| B. | Keynes |
| C. | Chamberlin |
| D. | Pigou |
| Answer» C. Chamberlin | |
| 338. |
A monopolistically competitive market is distinguished from perfect competition by the fact that |
| A. | Few sellers |
| B. | It has few buyers |
| C. | It deals with differentiated products |
| D. | None of the above |
| Answer» C. It deals with differentiated products | |
| 339. |
Excess capacity is a hallmark of |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Oligopoly |
| D. | Monopolistic competition |
| Answer» D. Monopolistic competition | |
| 340. |
Monopolistically competitive firms |
| A. | Are small in size |
| B. | Have small share in the market |
| C. | Are large in the size |
| D. | Both A and B |
| Answer» D. Both A and B | |
| 341. |
Selling cost assumes paramount importance in |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | None of the above |
| Answer» C. Monopolistic competition | |
| 342. |
Under monopolistic competition, there can be freedom of entry in the sense that there is freedom to produce |
| A. | Close substitutes |
| B. | Perfect substitutes |
| C. | Complements |
| D. | None of the above |
| Answer» A. Close substitutes | |
| 343. |
A firm under monopolistic competition advertise because |
| A. | To compete successfully with rival |
| B. | To lower cost of production |
| C. | To increase revenue and sales |
| D. | Since it cannot raise price |
| Answer» C. To increase revenue and sales | |
| 344. |
In the case of monopolistic competition, |
| A. | Short run supply curve cannot be defined |
| B. | MR curve cannot be defined |
| C. | AR curve cannot be defined |
| D. | None of the above |
| Answer» A. Short run supply curve cannot be defined | |
| 345. |
Under monopolistic competition, super normal profit arise when |
| A. | AR=AC |
| B. | MR=MC |
| C. | AR>AC |
| D. | AR<AC |
| Answer» C. AR>AC | |
| 346. |
Which of the following condition are met in the long run equilibrium of the monopolistic competitor earning only normal profit |
| A. | MC=AC |
| B. | P=AC |
| C. | P=MR |
| D. | P=MC |
| Answer» B. P=AC | |
| 347. |
The term group equilibrium is referred to |
| A. | Duopoly |
| B. | Monopolistic competition |
| C. | Perfect competition |
| D. | Oligopoly |
| Answer» B. Monopolistic competition | |
| 348. |
Increase or decrease in the level of production by a monopolistically competitive firm have ------- impact on price and output decisions of other firms |
| A. | Very significant |
| B. | Significant |
| C. | Small |
| D. | Negligible |
| Answer» D. Negligible | |
| 349. |
Monopolistic competitive firm fixes the price of its product |
| A. | Independent of the price of close substitutes |
| B. | Close to the prices of close substitutes |
| C. | At a very high level |
| D. | None of the above |
| Answer» B. Close to the prices of close substitutes | |
| 350. |
Under monopolistic competition, an increase in the number of firms producing close substitutes will make the demand curve of each firm |
| A. | Inelastic |
| B. | Elastic |
| C. | Downward sloping |
| D. | Perfectly inelastic |
| Answer» B. Elastic | |
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