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8. The quantity that an individual supplier is prepared to supply over a period of time is a
function of
a. Price of the product
b. Cost of production of the product
c. Both
d. None
9. If the supply of a product remain same with the increase in price, the possible reasons can be
a. Apprehension of further price hike
b. Limited production facility
c. Commodity being a rare commodity
d. All the three
11. Price is the most important factor influencing the supply of a commodity
a. True
b. False
15. If demand has been changed the supply can also be changed
a. in short period supply
b. in long period supply
c. both
d. none of the above
16. The law of supply says that the supply varies directly with the
a. demand
b. raw material
c. price
d. none of the above
19. If price and quantity supplied change by the same magnitude, then we have
a. unit elasticity supply
b. perfectly elastic supply
c. relatively inelastic supply
d. none of the above
20. Supply is said to be…………… when a given percentage change in price causes a smaller
change in quantity supplied.
a. unit elasticity supply
b. perfectly elastic supply
c. inelastic
d. none of the above
23. If the stock of goods can be easily stored its supply would be
a. perfectly inelastic
b. perfectly elastic
c. relatively inelastic
d. relatively elastic
24. If 20% increase in price causes quantity supplied to increase by 50%, the price elasticity of
supply is:
a. 5/2.
b. 2/5.
c. 5/4.
d. 4/5.
Market
25. Which of the following is/are an essential feature of the market
a. Buyers
b. Sellers
c. Price
d. All the three
28. In economic terms, market is defined as a system under which buyers and sellers negotiate
the price of a product, settle the price, and transact their business.
a. True
b. False
30. Perfect competition: Perfect competition is characterised by the following main features:
a. There are large numbers of sellers
b. Sellers and buyers are price-takers
c. Products produced are homogeneous
d. There is freedom of entry and exit.
31. Monopoly: Monopoly is characterised by the following main features:
a. There exists only one seller producing a commodity that has no close substitutes in the
market
b. The monopolist behaves as a price-maker
c. Entry is completely blocked.
d. None of the above
Monopolistic Competition
33. Which of the following is/are the characteristic of a monopolistically competitive market
a. No restriction on exit and entry
b. Many sellers
c. Product differentiation
d. All the three
34. The market state that satisfy all the essential features of a perfect competitive market except
identity of product is known as
a. Oligopoly
b. Duopoly
c. Monopoly
d. Monopolistic competition
44. Due to large number of sellers with close substitute products, the level of competition is very
low in the market.
a. True
b. False
45. The concept of monopolistic competition was put-forth by an American economist Prof.
E.H. Chamberlin in his popular book, “The Theory of Monopolistic Competition” published
in
a. 1933.
b. 1934
c. 1935
d. 1932
46. We can say that monopolistic competition is a market situation which lies between monopoly
and perfect competition.
a. True
b. False
47. The firm is earning super-normal profits or abnormal profits since average revenue is greater
than average cost, i.e.,
a. AR > AC.
b. AR = AC
c. AR < AC
d. None of the above
48. If under monopolistic competition, the price of product is equal to ‘AC’, the firm will be
earning
a. normal profit
b. super normal profit
c. loss
d. None of the above
Perfect competition
49. In the long run a firm in perfect competition earns
a. Normal profit only
b. Abnormal profit
c. Average profit of past five years
d.12.33% profit on capital employed
50. The practice of selling same product to different persons at different price is called
a. Price discrimination
b. Price rigging
c. Price manipulation
d. Price Justification
55. Under perfect market conditions the supply curve of a firm is represented by
a. MC curve
b. MR curve
c. AR curve ;
d. AC curve
56. Long-term equilibrium of an Industry under a perfectly market conditions in achieved when
a. All the firms are earning normal profit
b. All the firms are in equilibrium
c. There is no further entry or exit of firms from the industry
d. All the three
61. The condition for the long run equilibrium of a perfectly competitive firm
a. Price=MC=AC
b. Price=TC
c. MC=AVC
d. MC=MR
63. In …………. there shall be many firms in the industry and each firm shall be small in size,
producing only a very small portion of the total output.
a. monopolistic competition
b. imperfect competition
c. perfect competition
d. None of the above
64. Super normal profits are the minimum to induce the entrepreneur to remain and work in an
industry
a. True
b. False
65. Super normal or excess profit, is any return above the normal profits.
a. True
b. False
Monopoly
66. The ideal level of operation for a pure monopoly firm is the level where
a. TR and STC curve are parallel to each other
b. TR = TC
c. TR = Total variable cost
d. TR is less than STC
67. When the Demand curve of a pure monopoly firm is elastic, MR will be
a. Negative
b. Positive
c. Zero
d. None of the above
68. In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level
due to
a. Price discrimination
b. Cost effectiveness
c. Banned entry of new firms
d. Sales promotion
75. …………… it is the form of the market in which the only seller of a commodity has fully
control over the prices
(a) Monopoly
(b) Pure monopoly
(c) Simple monopoly
(d) All the three
79. There is a strict restriction, i.e. barrier on the entry of new firms in the market.
a) Perfect Competition
b) Monopolistic Competition
c) Oligopoly
d) Monopoly
80. There exists close substitute of available output of a monopoly firm in the market.
a. True
b. False
81. The larger the gap between price and marginal cost, the greater is the monopoly power.
a. True
b. False
83. Profits of a monopolist are maximised at the output at which his short- period marginal cost
(SMC) equals his marginal revenue (MR).
a. True
b. False
84. In which of the following market structure is the degree of control over the price of its
product by a firm very large?
a. Imperfect competition
b. Perfect competition
c. Monopoly
d. In A and B both
86. In pure monopoly, what is the relation between the price and the marginal revenue?
a. the price is greater than the marginal revenue
b. the price is less than the marginal revenue
c. there is no relation
d. they are equal
87. In order to maximize profits, a monopoly company will produce that quantity at which the:
a. marginal revenue equals average total cost
b. price equals marginal revenue
c. marginal revenue equals marginal cost
d. total revenue equals total cost
88. Compared to the case of perfect competition, a monopolist is more likely to:
a. charge a higher price
b. produce a lower quantity of the product
c. make a greater amount of economic profit
d. all of the above
90. The best level of output for the monopolist is the output at which:
a. MR equals AC
b. MR equals MC
c. MR exceeds MC
d. MR is less than MC
Oligopoly
97. The implication of the kinked demand curve is reflected in a discontinuity in the:
a) Marginal revenue curve
b) Marginal cost curve
c) Total revenue curve
d) Total cost curve
99. Oligopoly is that from of imperfect competition where there are few firms in the market,
producing either a homogenous product or a producing products which are close but not perfect
substitutes of each other.
a. True
b. False
Revenue
100. …….. Measures the differences between the new total revenue and existing total revenue
a. Average revenue
b. Total revenue
c. Marginal revenue
d. Incremental revenue
102 .………. means the total receipts from sales divided by the number of unit sold.
a. Average revenue
b. Total revenue
c. Marginal revenue
d. Incremental revenue
103. So long as Average Revenue is falling, Marginal Revenue will be …………. Average
Revenue
a. Less than
b. More than
c. Equal to
d. None of these
105. Total Revenue will be maximum at the point where Marginal Revenue is
a. One
b. Zero
c. <1
d. >1
106.…….. is the change in total revenue irrespective of changes in price or due to the effect of
managerial decision on revenue
a. Average revenue
b. Total revenue
c. Marginal revenue
d. Incremental revenue
107. Which of the following concepts represents the extra revenue a firm receives from an
additional unit of a factor of production?
a. total revenue
b. marginal physical product
c. marginal revenue
d. none of the above
1. The concept of ‘quasi-rent’ means
the rent of land
the return to a factor of production which is fixed in supply in the short run
half the rent land
the return to a factor of production which is not fixed in supply
2. Which one of the following denotes the concept of marginal in the Ricardian theory of rent?
It is the poorest quality land
It is no-rent land, as it produces not surplus over cost of production
It is that land whose surplus determines rent of other land
it is that land whose rent changes with change in the margin of cultivation.
37. In the theory of kinked demand curve, the lower segment of the demand curve is?
(A) Perfectly inelastic
(B) Perfectly elastic
(C) Highly elastic
(D) Less elastic
Normal profit is
a. Minimum profit
b. Alternative cost
c. Economic profit
d. Any of the above
1. The Bank of England, for instance, was founded in
a. 1695
b.1693
c.1794
d.1694
2. Which one of the following is the special drawing right given by the International Monetary Fund
to its member countries?
a. Cold money
b. Hot money
c. Paper gold
d. None of these
3. Which of the following is the Federal regulatory agency that charters and supervises Federal credit
unions?
a. AIRCSC
b. ARC
c. CAG
d. NCUA
NCUA stands for National Credit Union Administration.
9. When did economic and monetary union become an objective of the EC?
a.1957
b.1969
c. 1985
d. 1992
10. How did the French and German positions on monetary union differ?
a. Germany wanted a highly independent European Central Bank and strong monetary
discipline
b. Germany wanted the European Central Bank to coordinate closely with national finance ministers
c. France preferred the name 'euro' for the new currency, while Germany preferred 'ecu'
d. France favoured a rigid application of the budget deficit limits
11. Which four member states did not participate in the Euro when it was launched in 1999?
a. Britain, Denmark, Portugal and Greece
b. Britain, Portugal, Sweden and Greece
c. Britain, Denmark, Sweden and Portugal
d.Britain, Denmark, Sweden and Greece
14. Which of the following is not the function of World Trade Organization?
a. To settle border disputes of member countries. ;
b. To handle trade disputes.
c. To provide technical assistance and training to developing countries.
d. To provide forum for trade negotiation between the member countries
15. Banks of BRICS nations have agreed to establish credit lines in _________ currencies.
a. Legal
b. Plastic
c. Cryptocurrency
d. National