120+ Micro Economics analysis Solved MCQs

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)
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)
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
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
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
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
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
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
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
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
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
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
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
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
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
116.

Product differentiation is a characteristic of:

A. monopoly
B. perfect competition
C. monopolistic competition
D. oligopoly
Answer» C. monopolistic competition
117.

A firm under Perfect Competition is a:

A. price maker
B. price taker
C. monopolist
D. none of these
Answer» B. price taker
118.

Selling cost is a feature of :

A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Answer» C. monopolistic competition
119.

Oligopoly is characterized by:

A. a few sellers
B. one seller
C. large sellers
D. all of these
Answer» A. a few sellers
120.

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

A. oligopoly
B. monopsony
C. duopoly
D. bilateral monopoly
Answer» C. duopoly
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
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
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
124.

Equilibrium literally means:

A. balance
B. imbalance
C. change
D. none of these
Answer» A. balance
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
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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