MCQOPTIONS
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MCQOPTIONS
This section includes 44 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following is not one of the four Ps in marketing ? |
| A. | Product |
| B. | Price |
| C. | Place |
| D. | Presence |
| Answer» B. Price | |
| 2. |
If an input necessary for production is in limited supply so that an expansion of the industry raises costs for all existing firms in the market, then the long-run market supply curve for a good could be ? |
| A. | perfectly inelastic |
| B. | perfectly elastic |
| C. | upward sloping |
| D. | downward sloping |
| Answer» D. downward sloping | |
| 3. |
Decrease returns to scale means that _____ as ______? |
| A. | Short run marginal cost rises, output rises |
| B. | long run marginal cost rises, output rises |
| C. | Short run average cost rises, output rises |
| D. | long run average cost rises, output rises |
| Answer» E. | |
| 4. |
Short run average total costs are equals to the sum of ____ and _____? |
| A. | Short run opportunity costs, profit |
| B. | Short run variable costs, profit |
| C. | Short run average variable costs, profit |
| D. | Short run average variable costs, profit run average fixed costs |
| Answer» E. | |
| 5. |
A competitive firm demand curve is ? |
| A. | Horizontal |
| B. | vertical |
| C. | downward sloping |
| D. | elastic |
| Answer» B. vertical | |
| 6. |
A competitive firm produces a level of output at which ? |
| A. | Price is greater than marginal cost |
| B. | price equals marginal cost |
| C. | price is less than marginal cost |
| D. | None of the above |
| Answer» C. price is less than marginal cost | |
| 7. |
Which of the following is not a characteristic of a competitive market ? |
| A. | All of these answers are characteristic of a competitive market |
| B. | The are many buyers and sellers in the market |
| C. | The goods offered for sale are largely the same. |
| D. | Firms generate small but positive economic profits in the long run |
| E. | Firms can freely enter or exit the market |
| Answer» E. Firms can freely enter or exit the market | |
| 8. |
Holding all factors constant except one and increasing a variable factor is expected to lead to steadily decreased marginal product of that factor, this is an example of ? |
| A. | decreasing returns to scale |
| B. | The law of diminishing returns |
| C. | constant returns to scale |
| D. | an inefficient production technique |
| Answer» C. constant returns to scale | |
| 9. |
For perfect competition to work there must be ? |
| A. | many buyers and sellers |
| B. | a standard product |
| C. | free entry and exit |
| D. | perfect information |
| E. | all of the above |
| Answer» F. | |
| 10. |
The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve ? |
| A. | At their lowest points |
| B. | When they are declining |
| C. | When they are increasing |
| D. | When marginal revenue is zero |
| Answer» B. When they are declining | |
| 11. |
In a competitive industry each buyer and seller ? |
| A. | is a price taker |
| B. | Producer different products |
| C. | Believes that can influence price |
| D. | Prevents the entry of competitors |
| Answer» B. Producer different products | |
| 12. |
The firms long run output decision will be where ? |
| A. | long run average cost is lowest |
| B. | marginal revenue equals output |
| C. | marginal revenue equals long run marginal cost |
| D. | marginal cost equals output |
| Answer» D. marginal cost equals output | |
| 13. |
For a perfectly competitive firm ? |
| A. | Price equals marginal revenue |
| B. | price is greater than marginal revenue |
| C. | price equals total revenue |
| D. | price equals total cost |
| Answer» B. price is greater than marginal revenue | |
| 14. |
For a competitive firm, its short run supply curve is ______ and its long run supply curve is _____? |
| A. | SMC, LMC |
| B. | SMC above SAVC, LMC above LAC |
| C. | SMC below SAVC, LMC above LAC |
| D. | SMC below SAVC, LMC bellow LAC |
| Answer» C. SMC below SAVC, LMC above LAC | |
| 15. |
In the long-run some firms will exit the market if the price of the good offered for sale is less than ? |
| A. | marginal revenue |
| B. | marginal cost |
| C. | average total cost |
| D. | average revenue |
| Answer» D. average revenue | |
| 16. |
In the short run a firm will produce zero output if ? |
| A. | price is greater than short run average total cost |
| B. | price is between short run average total cost and short run average variable cost |
| C. | price is less than short run average variable cost |
| D. | profit is zero |
| Answer» D. profit is zero | |
| 17. |
A grocery store should close at night if the ? |
| A. | variable costs of staying open are less than the total revenue due to staying open. |
| B. | total costs of staying open are less than the total revenue due to staying open |
| C. | variable costs of staying open are greater than the total revenue due to staying open |
| D. | total costs of staying open are greater than the total revenue due to staying open |
| Answer» D. total costs of staying open are greater than the total revenue due to staying open | |
| 18. |
in long-run equilibrium in a competitive market, firms are operating at ? |
| A. | the minimum of their average-total-cost curves |
| B. | all of these answers are correct |
| C. | their efficient scale |
| D. | zero economic profit |
| E. | intersection of marginal cost and marginal revenue |
| Answer» C. their efficient scale | |
| 19. |
In the short run, the competitive firm’s supply curve is the portion of the marginal cost curve that lies above the average variable cost curve? |
| A. | Upward-sloping portion of the average total cost curve |
| B. | upward-sloping portion of the average variable cost curve |
| C. | portion of the marginal cost curve that lies above the average total cost curve. |
| D. | entire marginal cost curve. |
| E. | portion of the marginal-cost curve that lies above the average variable cost curve |
| Answer» F. | |
| 20. |
The competitive firm maximize profit when it produces output up to the point where ? |
| A. | price equals average variable cost |
| B. | marginal revenue equals average revenue |
| C. | marginal cost equals total revenue |
| D. | marginal cost equals marginal revenue |
| Answer» E. | |
| 21. |
If a competitive firm doubles its output its total revenue ? |
| A. | doubles. |
| B. | more than double |
| C. | less than doubles. |
| D. | cannot be determined because the price of the good may rise or fall |
| Answer» B. more than double | |
| 22. |
If a competitive firm is producing a level of output where marginal revenue exceeds marginal cost the firm could increase profit if it ? |
| A. | decreased production |
| B. | maintained production at the current level |
| C. | temporarily shut down. |
| D. | increased production |
| Answer» E. | |
| 23. |
If a long run average cost curve is falling form left to right this is an example of ? |
| A. | increasing returns to scale |
| B. | decreasing returns to scale |
| C. | constant returns to scale |
| D. | the minimum efficient scale |
| Answer» B. decreasing returns to scale | |
| 24. |
In perfect competition ? |
| A. | A few firms dominate the industry |
| B. | Firms are price makers |
| C. | There are many buyers but few sellers |
| D. | There are many buyers and sellers |
| Answer» E. | |
| 25. |
When average cost is falling marginal cost is ________ and when average cost is rising marginal cost is? |
| A. | greater than average cost, greater than average cost |
| B. | less than average cost, greater than average cost |
| C. | less than average cost, less than average cost |
| D. | greater than average cost, less than average cost |
| Answer» C. less than average cost, less than average cost | |
| 26. |
If a firm takes over a competitor then, according to porter’s 5 forces model ? |
| A. | Buyer power is higher |
| B. | Supplier power is higher |
| C. | Substitute threat is higher |
| D. | Rivalry is lower |
| Answer» C. Substitute threat is higher | |
| 27. |
The long-run market supply curve ? |
| A. | is always more elastic than the short-run market supply curve. |
| B. | is always perfectly elastic |
| C. | has the same elasticity as the short run market supply curve |
| D. | is always less elastic than the short-run market supply curve |
| Answer» B. is always perfectly elastic | |
| 28. |
In monopolistic competition of firms are making abnormal profit other firms will enter and ? |
| A. | The marginal cost will shift outwards |
| B. | the demand curve will shift inwards |
| C. | The average cost will shift downwards |
| D. | The average variable cost will increase |
| Answer» B. the demand curve will shift inwards | |
| 29. |
In the long run, the competitive firm’s supply curve is the ? |
| A. | entire marginal cost curve |
| B. | upward-sloping portion of the average total cost curve |
| C. | portion of the marginal cost curve that lies above the average total cost curve |
| D. | upward-sloping portion of the average variable cost curve |
| E. | portion of the marginal cost curve that lies above the average variable cost curve. |
| Answer» D. upward-sloping portion of the average variable cost curve | |
| 30. |
For a competitive firm, marginal revenue is ? |
| A. | total revenue divided by the quantity sold |
| B. | equal to the quantity of the good sold |
| C. | average revenue divided by the quantity sold |
| D. | equal to the price of the good sold |
| Answer» E. | |
| 31. |
In the short run firms in perfect competition will still produce provided ? |
| A. | The price covers average variable cost |
| B. | The price covers variable cost |
| C. | The price covers average fixed cost |
| D. | The price covers fixed costs |
| Answer» B. The price covers variable cost | |
| 32. |
If a firm is not operating at the output necessary to achieve all scale economies, it has not achieved its ? |
| A. | Efficient scale |
| B. | Average efficient scale |
| C. | Maximum efficient scale |
| D. | Minimum efficient scale |
| Answer» E. | |
| 33. |
Which of the following market would most closely satisfy the requirements for a competitive market ? |
| A. | electricity |
| B. | cable television |
| C. | cola |
| D. | milk |
| E. | All of these answers represent competitive markets |
| Answer» E. All of these answers represent competitive markets | |
| 34. |
Effective branding will tend to make ? |
| A. | Demand more price inelastic |
| B. | Supply more price inelastic |
| C. | Demand more income elastic |
| D. | Supply more income elastic |
| Answer» E. | |
| 35. |
In the long run in perfect competition ? |
| A. | The price equals the total revenue |
| B. | Firms are allocatively inefficient |
| C. | Firms are productively efficient |
| D. | The price equals total cost |
| Answer» D. The price equals total cost | |
| 36. |
A production is technique is technically efficient if ? |
| A. | output is maximized |
| B. | inputs are minimized |
| C. | there is no way to make a given output using less of one input and no more of the other inputs |
| D. | Costs are minimized |
| Answer» D. Costs are minimized | |
| 37. |
Firms in perfect competition face a? |
| A. | perfectly elastic demand curve |
| B. | perfectly inelastic demand curve |
| C. | perfectly elastic supply curve |
| D. | perfectly inelastic supply curve |
| Answer» B. perfectly inelastic demand curve | |
| 38. |
A profit maximizing firm is perfect competition produces where ? |
| A. | Total revenue is maximized |
| B. | Marginal revenue equals zero |
| C. | Marginal revenue equals marginal cost |
| D. | Marginal revenue equals average cost |
| Answer» D. Marginal revenue equals average cost | |
| 39. |
In marketing “USP” stands for ? |
| A. | Unique Selling Proposition |
| B. | Underlying Sales Proposition |
| C. | Unit Sales Point |
| D. | Under Sales Procedure |
| Answer» B. Underlying Sales Proposition | |
| 40. |
In Porter’s five force model conditions are more favorable for firms within an industry if ? |
| A. | Buyer power is high |
| B. | Supplier power is high |
| C. | Entry threat is low |
| D. | Substitute threat is high |
| Answer» E. | |
| 41. |
In monopolistic competition ? |
| A. | Firms face a perfectly elastic demand curve |
| B. | All products are homogeneous |
| C. | Firms make normal profits in the long run |
| D. | There are barriers to entry to prevent entry |
| Answer» E. | |
| 42. |
In monopolistic competition firms profit maximize where ? |
| A. | Marginal revenue = Average revenue |
| B. | Marginal revenue = Marginal cost |
| C. | Marginal revenue = Average cost |
| D. | Marginal revenue = Total cost |
| Answer» D. Marginal revenue = Total cost | |
| 43. |
If the long-run market supply curve for a good is perfectly elastic, an increase in the demand for that good will, in the long run, cause ? |
| A. | an increase in the number of firms in the market but no increase in the price of the good |
| B. | an increase the price of the good and an increase in the number of firms in the market |
| C. | an increase the price of the good but no increase in the number of firms in the market |
| D. | no impact on either the price of the good or the number of firms in the market |
| Answer» B. an increase the price of the good and an increase in the number of firms in the market | |
| 44. |
If all firms in a market have identical cost structures and if inputs used in the production of the good in that market are readily available, then the long-run market supply curve for that good should be ? |
| A. | downward sloping |
| B. | perfectly inelastic |
| C. | upward sloping |
| D. | perfectly elastic |
| Answer» E. | |