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) .
| 351. |
The demand curve faced by the a monopolistically competitive firm is very elastic if the degree of product differentiation is |
| A. | Very low |
| B. | Very high |
| C. | Zero |
| D. | Moderate |
| Answer» B. Very high | |
| 352. |
Which one of the following is not a feature of monopolistic competition |
| A. | Homogeneous products |
| B. | Differentiated products |
| C. | Selling cost |
| D. | No uniform prices |
| Answer» A. Homogeneous products | |
| 353. |
The book “The theory of Monopolistic Competition” is written by |
| A. | Alfred Marshal |
| B. | E H Chamberlin |
| C. | Joan Robinson |
| D. | J M Keynes |
| Answer» B. E H Chamberlin | |
| 354. |
The book “The Economics of Imperfect Competition” is written by |
| A. | Alfred Marshal |
| B. | E H Chamberlin |
| C. | Joan Robinson |
| D. | J M Keynes |
| Answer» C. Joan Robinson | |
| 355. |
It is assumed that the cost curves of all the firms in the monopolistic competition are |
| A. | Different due to product differentiation |
| B. | Never considered in equilibrium |
| C. | Never formulated |
| D. | Same in spite of product differentiation |
| Answer» D. Same in spite of product differentiation | |
| 356. |
Free entry into monopolistically competitive market ensures that all firms will produce at the lowest point of LAC |
| A. | Always |
| B. | Sometimes |
| C. | Never |
| D. | Cannot say |
| Answer» C. Never | |
| 357. |
Under monopolistic competition, the long run equilibrium of the firm is established at the |
| A. | Minimum point of LAC |
| B. | Point where LAC is still falling |
| C. | Point where LAC is rising |
| D. | Minimum point of LMC |
| Answer» B. Point where LAC is still falling | |
| 358. |
In short run a firms in monopolistic competition |
| A. | Always earns profit |
| B. | Incurs loss |
| C. | Earns normal profit only |
| D. | May earn normal profit, abnormal profit or incur losses |
| Answer» D. May earn normal profit, abnormal profit or incur losses | |
| 359. |
In long run all the firms in the monopolistic competition |
| A. | Always earns profit |
| B. | Incurs loss |
| C. | Earns normal profit only |
| D. | May earn normal profit, abnormal profit or incur losses |
| Answer» C. Earns normal profit only | |
| 360. |
The short run equilibrium level of output of the monopolistic competitor is given by |
| A. | Price = MC |
| B. | Price= AC |
| C. | MC=MR |
| D. | P=MR |
| Answer» C. MC=MR | |
| 361. |
When a group of monopolistic competition attains the equilibrium, the firms in the group |
| A. | Charge different prices, but produce identical outputs |
| B. | Produce different output, but charge the same price |
| C. | Charge different price and produce different output |
| D. | None of the above |
| Answer» B. Produce different output, but charge the same price | |
| 362. |
The elasticity of average revenue curve of the monopolistic competitor, depends on |
| A. | The extent of product differentiation |
| B. | The number of firms |
| C. | Number of buyers |
| D. | Both A & B |
| Answer» D. Both A & B | |
| 363. |
When demand curve is elastic, MR is |
| A. | 1 |
| B. | 0 |
| C. | Positive |
| D. | Negative |
| Answer» C. Positive | |
| 364. |
The best or optimum level of output for the pure monopolist |
| A. | MR=MC |
| B. | P=MC |
| C. | P=AC |
| D. | Highest P |
| Answer» A. MR=MC | |
| 365. |
Which type of competition leads to maximum exploitation of consumer |
| A. | Perfect competition |
| B. | Monopoly |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» B. Monopoly | |
| 366. |
In the short run, the monopolist |
| A. | Breaks even |
| B. | Incurs loss |
| C. | Makes profit |
| D. | Any of the above |
| Answer» D. Any of the above | |
| 367. |
The demand for the product of a monopoly firm is |
| A. | Inelastic |
| B. | Elastic |
| C. | Unitary elastic |
| D. | Perfectly inelastic |
| Answer» B. Elastic | |
| 368. |
If the monopolist incurs loss in the short run, then in the long run |
| A. | The monopolist go out of business |
| B. | The monopolist will stay in the business |
| C. | The monopolist break even |
| D. | Any of the above |
| Answer» D. Any of the above | |
| 369. |
Which of the form of monopoly regulation is the most advantages to the consumer |
| A. | Price control |
| B. | Lump sum tax |
| C. | Per unit tax |
| D. | All of the above |
| Answer» A. Price control | |
| 370. |
The monopolist who is in |
| A. | Short run equilibrium will also be in long run equilibrium |
| B. | Long run equilibrium will also be in short run equilibrium |
| C. | Long run equilibrium may or may not be in short run equilibrium |
| D. | None of the above |
| Answer» B. Long run equilibrium will also be in short run equilibrium | |
| 371. |
In long run the monopolist can earn abnormal profit because of |
| A. | Blocked entry |
| B. | High selling price |
| C. | Low cost |
| D. | Economies of scale |
| Answer» A. Blocked entry | |
| 372. |
Price discrimination under monopoly is of |
| A. | One |
| B. | Two |
| C. | Three |
| D. | Four |
| Answer» C. Three | |
| 373. |
The market in which there is a single seller is called |
| A. | Oligopoly |
| B. | Monopsony |
| C. | Monopoly |
| D. | Nine of the above |
| Answer» C. Monopoly | |
| 374. |
Monopsony refers to |
| A. | Single seller |
| B. | A few sellers |
| C. | Single buyer |
| D. | A few buyers |
| Answer» C. Single buyer | |
| 375. |
Discriminating monopoly is possible if two markets have |
| A. | Differing elasticity of demand |
| B. | Differing average cost |
| C. | Same elasticity |
| D. | Different average cost |
| Answer» A. Differing elasticity of demand | |
| 376. |
Monopolist can fix |
| A. | Both price and output |
| B. | Neither price and output |
| C. | Either price and output |
| D. | None of the above |
| Answer» C. Either price and output | |
| 377. |
A discrimination monopolist charges in a market |
| A. | Lower prices if it has lower elasticity |
| B. | Higher prices if it has lower elasticity |
| C. | Lower prices if it has higher elasticity |
| D. | Cannot say |
| Answer» A. Lower prices if it has lower elasticity | |
| 378. |
A firm practicing price discrimination will be |
| A. | Changing qualities of the product |
| B. | Buying from the cheapest market |
| C. | Buying from firms |
| D. | Charging different prices in different markets |
| Answer» D. Charging different prices in different markets | |
| 379. |
The best level of output for the monopolist is |
| A. | AC is minimum |
| B. | TC=TR |
| C. | TR and TC are parallel |
| D. | TR is maximum |
| Answer» C. TR and TC are parallel | |
| 380. |
If the monopolist faces identical demand for his commodity in the two separate markets, by practicing third degree price discrimination |
| A. | Will increase his TR and total profit |
| B. | Can increase his TR and profit |
| C. | Cannot increase his TR and profit |
| D. | Will charge different prices in different market |
| Answer» C. Cannot increase his TR and profit | |
| 381. |
Under pure monopoly, there will be |
| A. | No distinction between firm and industry |
| B. | One firm no industry |
| C. | No firm one industry |
| D. | Very few firms |
| Answer» A. No distinction between firm and industry | |
| 382. |
Monopolist will not produce that portion of demand curve where the elasticity of demand |
| A. | Equal to unity |
| B. | Less than unity |
| C. | Greater than zero |
| D. | None of the above |
| Answer» B. Less than unity | |
| 383. |
Under monopoly, the equilibrium price is |
| A. | Equal to MC |
| B. | Less than MC |
| C. | More than MC |
| D. | Equal to AC |
| Answer» C. More than MC | |
| 384. |
The cross elasticity of demand for the monopolist product is |
| A. | Very low |
| B. | Moderate |
| C. | High |
| D. | Very high |
| Answer» A. Very low | |
| 385. |
Which of the following is known as the perfect price discrimination |
| A. | First degree price discrimination |
| B. | Second degree price discrimination |
| C. | Third degree price discrimination |
| D. | Nine of the above |
| Answer» A. First degree price discrimination | |
| 386. |
A monopolist usually earns |
| A. | Economic profit |
| B. | Only normal profit |
| C. | Losses |
| D. | Profit and losses, which are uncertain |
| Answer» A. Economic profit | |
| 387. |
Price discrimination is possible |
| A. | Under any market form |
| B. | Only under monopoly |
| C. | Only under monopolistic competition |
| D. | Only in perfect competition |
| Answer» B. Only under monopoly | |
| 388. |
Who introduced various types of price discrimination |
| A. | Alfred Marshall |
| B. | Adam Smith |
| C. | A C Pigou |
| D. | J B Say |
| Answer» C. A C Pigou | |
| 389. |
Oligopoly is a market situation characterized by |
| A. | Large number of buyers and sellers |
| B. | A single seller |
| C. | Fairly large number of buyers and sellers |
| D. | A few sellers |
| Answer» D. A few sellers | |
| 390. |
Price leadership can be in the form of |
| A. | Price leadership by a low cost firm |
| B. | Price leadership by a dominant firm |
| C. | A barometric price leadership |
| D. | All of the above |
| Answer» D. All of the above | |
| 391. |
Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stability Reason (R) Oligopolists face a demand curve that is highly elastic for price increases and less elastic for price reductions |
| 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» C. Both (A) and (R) are true and (R) is the correct explanation of (A) | |
| 392. |
The equilibrium level of output for a perfectly competitive market is |
| A. | MC = AC |
| B. | MC = MR |
| C. | TC = TR |
| D. | None of the above |
| Answer» B. MC = MR | |
| 393. |
The term ‘monopsony’ refers to |
| A. | a single seller |
| B. | a single buyer |
| C. | a single buyer and a single seller |
| D. | None of the above |
| Answer» B. a single buyer | |
| 394. |
In Chamberlin and Kinked demand curve model, the oligoposist |
| A. | Recognize their interdependence |
| B. | Do not collude |
| C. | Tend to keep prices constant |
| D. | All of the above |
| Answer» D. All of the above | |
| 395. |
If an oligopolist incurs losses in the short run, then in the long run |
| A. | The oligopolist will go out of business |
| B. | The oligopolist will stay in business |
| C. | The oligopolist will break-even |
| D. | Any of the above |
| Answer» D. Any of the above | |
| 396. |
Existence of large number of buyers and sellers and homogenous product is a feature of : |
| A. | Monopoly |
| B. | Duopoly |
| C. | Perfect Competition |
| D. | Oligopoly |
| Answer» C. Perfect Competition | |
| 397. |
Product differentiation is a characteristic of: |
| A. | Monopoly |
| B. | Perfect Competition |
| C. | Monopolistic Competition |
| D. | Oligopoly |
| Answer» C. Monopolistic Competition | |
| 398. |
A firm under Perfect Competition is a: |
| A. | Price maker |
| B. | Price taker |
| C. | Monopolist |
| D. | None of these |
| Answer» B. Price taker | |
| 399. |
Selling cost is a feature of : |
| A. | Perfect Competition |
| B. | Monopoly |
| C. | Monopolistic Competition |
| D. | Oligopoly |
| Answer» C. Monopolistic Competition | |
| 400. |
Oligopoly is characterized by: |
| A. | A few Sellers |
| B. | One seller |
| C. | Large Sellers |
| D. | All of these |
| Answer» A. A few Sellers | |
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