120+ Micro Economics analysis Solved MCQs

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101.	Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stabilityReason (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)

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102.	Match the following A B (i). Demand for inputs Hall and Hitch (ii). Oligopoly Single buyer (iii). Kinked demand theory Cartels (iv). Monopsony Derived demand Codes;
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)

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103.	If the hourly wage is Rs.10, and the firm produces 5 additional units of the commodity with an additional hour of labour time, then marginal cost is
A.	0.5
B.	2
C.	5
D.	10
Answer» B. 2

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104.	The equilibrium level of output for a perfectly competitive marketis
A.	mc = ac
B.	mc = mr
C.	tc = tr
D.	none of the above
Answer» B. mc = mr

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105.	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

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106.	The demand curve for labour under perfectly competitive market is
A.	downward sloping
B.	horizontal straight line
C.	upward sloping
D.	none of the above
Answer» A. downward sloping

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107.	The supply curve of the input that a firm faces under a perfectly competitive market is
A.	downward sloping
B.	horizontal supply curve
C.	upward sloping
D.	none of the above
Answer» B. horizontal supply curve

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108.	The supply curve of an input that a firm faces under an imperfectly competitive market is
A.	downward sloping
B.	horizontal supply curve
C.	upward sloping
D.	none of the above
Answer» C. upward sloping

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109.	Let labour is the only variable input, a monopsonist maximizes his or her profit when
A.	mpl = mel
B.	mpl < mpl
C.	mpl > mpl
D.	none of the above
Answer» A. mpl = mel

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110.	A profit maximizing firm under a perfectly competitive market employs more and more variable input labour until
A.	mrpl < mel = w
B.	mrpl > mel = w
C.	mrpl = mel = w
D.	none of the above
Answer» C. mrpl = mel = w

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111.	To minimize cost of production at any level of output the monopsonist should continue to substitute labour and capital until
A.	mel . mpl = mek . mpk
B.	mel / mpl = mek / mpk
C.	mel . mpl > mek . mpk
D.	mel / mpl > mek / mpk
Answer» B. mel / mpl = mek / mpk

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112.	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

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113.	In the case of price leadership by the dominant firm all the firms in the purely oligopolistic industry will produce their best level of output
A.	always
B.	never
C.	some times
D.	often
Answer» A. always

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114.	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

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115.	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

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116.	Product differentiation is a characteristic of:
A.	monopoly
B.	perfect competition
C.	monopolistic competition
D.	oligopoly
Answer» C. monopolistic competition

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117.	A firm under Perfect Competition is a:
A.	price maker
B.	price taker
C.	monopolist
D.	none of these
Answer» B. price taker

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118.	Selling cost is a feature of :
A.	perfect competition
B.	monopoly
C.	monopolistic competition
D.	oligopoly
Answer» C. monopolistic competition

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119.	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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120.	When there are only two sellers, the market is called as:
A.	oligopoly
B.	monopsony
C.	duopoly
D.	bilateral monopoly
Answer» C. duopoly

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121.	Perfect competition is a market situation under which a commodity is sold at:
A.	uniform price
B.	different price
C.	higher price
D.	lower price
Answer» A. uniform price

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122.	The demand curve of a firm under perfect competition is :
A.	inelastic
B.	perfectly inelastic
C.	infinitely elastic
D.	unitary elastic
Answer» C. infinitely elastic

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123.	The price of a commodity under the perfect competition is determined by:
A.	buyer
B.	seller
C.	firm
D.	market forces
Answer» D. market forces

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124.	Equilibrium literally means:
A.	balance
B.	imbalance
C.	change
D.	none of these
Answer» A. balance

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125.	The price at which the demand and supply are equal is called:
A.	normal price
B.	support price
C.	equilibrium price
D.	fair price
Answer» C. equilibrium price

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126.	Cost of advertisement and salesmanship is called:
A.	sales cost
B.	selling cost
C.	dual price
D.	none of these
Answer» B. selling cost

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120+ Micro Economics analysis Solved MCQs

Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stabilityReason (R) Oligopolists face a demand curve that is highly elastic for price increases and less elastic for price reductions

Match the following A B (i). Demand for inputs Hall and Hitch (ii). Oligopoly Single buyer (iii). Kinked demand theory Cartels (iv). Monopsony Derived demand Codes;

If the hourly wage is Rs.10, and the firm produces 5 additional units of the commodity with an additional hour of labour time, then marginal cost is

The equilibrium level of output for a perfectly competitive marketis

The term ‘monopsony’ refers to

The demand curve for labour under perfectly competitive market is

The supply curve of the input that a firm faces under a perfectly competitive market is

The supply curve of an input that a firm faces under an imperfectly competitive market is

Let labour is the only variable input, a monopsonist maximizes his or her profit when

A profit maximizing firm under a perfectly competitive market employs more and more variable input labour until

To minimize cost of production at any level of output the monopsonist should continue to substitute labour and capital until

In Chamberlin and Kinked demand curve model, the oligoposist

In the case of price leadership by the dominant firm all the firms in the purely oligopolistic industry will produce their best level of output

If an oligopolist incurs losses in the short run, then in the long run

Existence of large number of buyers and sellers and homogenous product is a feature of :

Product differentiation is a characteristic of:

A firm under Perfect Competition is a:

Selling cost is a feature of :

Oligopoly is characterized by:

When there are only two sellers, the market is called as:

Perfect competition is a market situation under which a commodity is sold at:

The demand curve of a firm under perfect competition is :

The price of a commodity under the perfect competition is determined by:

Equilibrium literally means:

The price at which the demand and supply are equal is called:

Cost of advertisement and salesmanship is called:

Match the following
A B
(i). Demand for inputs Hall and Hitch
(ii). Oligopoly Single buyer
(iii). Kinked demand theory Cartels
(iv). Monopsony Derived demand Codes;