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) .
| 51. |
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 | |
| 52. |
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 | |
| 53. |
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 | |
| 54. |
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 | |
| 55. |
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 | |
| 56. |
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 | |
| 57. |
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 | |
| 58. |
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 | |
| 59. |
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 | |
| 60. |
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 | |
| 61. |
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 | |
| 62. |
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 | |
| 63. |
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 | |
| 64. |
Under monopolistic competition, the demand curve of the product of an individual firm depends on the nature and prices of close substitutes |
| A. | true |
| B. | false |
| C. | not always |
| D. | depends on the nature of the product |
| Answer» A. true | |
| 65. |
When demand curve is elastic, MR is |
| A. | 1 |
| B. | 0 |
| C. | positive |
| D. | negative |
| Answer» C. positive | |
| 66. |
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 | |
| 67. |
Which type of competition leads to maximum exploitation of consumer |
| A. | perfect competition |
| B. | monopoly |
| C. | monopolistic competition |
| D. | oligopoly |
| Answer» B. monopoly | |
| 68. |
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 | |
| 69. |
The demand for the product of a monopoly firm is |
| A. | inelastic |
| B. | elastic |
| C. | unitary elastic |
| D. | perfectly inelastic |
| Answer» B. elastic | |
| 70. |
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 | |
| 71. |
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 | |
| 72. |
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 | |
| 73. |
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 | |
| 74. |
Price discrimination under monopoly is of |
| A. | one |
| B. | two |
| C. | three |
| D. | four |
| Answer» C. three | |
| 75. |
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 | |
| 76. |
Monopsony refers to |
| A. | single seller |
| B. | a few sellers |
| C. | single buyer |
| D. | a few buyers |
| Answer» C. single buyer | |
| 77. |
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 | |
| 78. |
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 | |
| 79. |
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 | |
| 80. |
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 | |
| 81. |
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 | |
| 82. |
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 | |
| 83. |
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 | |
| 84. |
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 | |
| 85. |
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 | |
| 86. |
The cross elasticity of demand for the monopolist product is |
| A. | very low |
| B. | moderate |
| C. | high |
| D. | very high |
| Answer» A. very low | |
| 87. |
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 | |
| 88. |
A monopolist usually earns |
| A. | economic profit |
| B. | only normal profit |
| C. | losses |
| D. | profit and losses, which are uncertain |
| Answer» A. economic profit | |
| 89. |
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 | |
| 90. |
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 | |
| 91. |
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 | |
| 92. |
‘Indeterminateness of demand curve’ is a feature of |
| A. | perfect competition |
| B. | monopoly |
| C. | monopolistic competition |
| D. | oligopoly |
| Answer» D. oligopoly | |
| 93. |
Selling cost is maximum in the case of |
| A. | monopoly |
| B. | oligopoly |
| C. | perfect competition |
| D. | monopolistic competition |
| Answer» B. oligopoly | |
| 94. |
The concept of ‘Kinked demand curve’ is related to |
| A. | monopoly |
| B. | monopolistic competition |
| C. | perfect competition |
| D. | oligopoly |
| Answer» D. oligopoly | |
| 95. |
The concept of ‘Kinked demand curve’ was developed by |
| A. | alfred marshal |
| B. | j r hicks |
| C. | p m sweezy |
| D. | a.k sen |
| Answer» C. p m sweezy | |
| 96. |
‘Group behavior’ is a feature of |
| A. | monopoly |
| B. | oligopoly |
| C. | perfect competition |
| D. | monopolistic competition |
| Answer» B. oligopoly | |
| 97. |
Advertising can become ‘a life and death matter’ in |
| A. | perfect competition |
| B. | monopoly |
| C. | monopolistic competition |
| D. | oligopoly |
| Answer» D. oligopoly | |
| 98. |
Classical oligopoly models are related to |
| A. | collusive oligopoly |
| B. | non-collusive oligopoly |
| C. | price leadership model |
| D. | none of the above |
| Answer» B. non-collusive oligopoly | |
| 99. |
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 | |
| 100. |
‘Cartels’ are example for |
| A. | collusive oligopoly |
| B. | non-collusive oligopoly |
| C. | monopsony |
| D. | none of the above |
| Answer» A. collusive oligopoly | |
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