MCQOPTIONS
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MCQOPTIONS
This section includes 373 Mcqs, each offering curated multiple-choice questions to sharpen your 12th knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Supposethe short run cost function can be written as TC=250 + 10Q. Average fixed cost equals |
| A. | 50/Q |
| B. | 50 |
| C. | 0 |
| D. | 50/Q + 10 |
| Answer» B. 50 | |
| 2. |
The total area under the demand curve of good measures |
| A. | arginal utility |
| B. | otal utility |
| C. | onsumers surplus |
| D. | roducer surplus |
| Answer» C. onsumers surplus | |
| 3. |
The slope of indifference curve indicates |
| A. | rice ratio between two commodities |
| B. | arginal rate of substitution |
| C. | actor substitution |
| D. | evel of indifference |
| Answer» C. actor substitution | |
| 4. |
Identify the factor which generally keeps the price-elasticity of demand for a good high. |
| A. | ts very high price |
| B. | ts very low price |
| C. | arge number of substitutes |
| D. | one of the above |
| Answer» D. one of the above | |
| 5. |
If the goods are complementary like car and petrol, their cross elasticity is |
| A. | egative |
| B. | ositive |
| C. | ero |
| D. | nfinite |
| Answer» B. ositive | |
| 6. |
The other name of Budget line is |
| A. | emand line |
| B. | rice line |
| C. | upply line |
| D. | one of the above |
| Answer» C. upply line | |
| 7. |
The LAC curve |
| A. | alls when the LMC curve falls |
| B. | ises when the LMC curve rises |
| C. | oes through the lowest point of the LMC curve |
| D. | alls when LMCLAC |
| Answer» E. | |
| 8. |
At shut down point |
| A. | rice is equal to AVC |
| B. | otal revenue is equal to TVC |
| C. | otal loss of the firm is equal to TFC |
| D. | ll of the above |
| Answer» E. | |
| 9. |
Quantity demanded is a |
| A. | low concept |
| B. | tock concept |
| C. | oth 'a' and 'b' |
| D. | one of the above |
| Answer» B. tock concept | |
| 10. |
Which of the following is not the name of LAC curve? |
| A. | lanning curve |
| B. | nveloping curve |
| C. | ound curve |
| D. | one of the above |
| Answer» D. one of the above | |
| 11. |
The shape of PPC is concave due to |
| A. | alling opportunity cost between two goods |
| B. | ising opportunity cost between two goods |
| C. | onstant opportunity cost between two goods |
| D. | one of the above |
| Answer» C. onstant opportunity cost between two goods | |
| 12. |
In imperfect competition |
| A. | xcess capacity always exists |
| B. | xcess capacity never exists |
| C. | xcess capacity may or may not exist |
| D. | one of the above |
| Answer» B. xcess capacity never exists | |
| 13. |
A monopolist is able to maximize his profits when |
| A. | is output is maximum |
| B. | e charges high price |
| C. | is average cost is minimum |
| D. | is marginal cost is equal to marginal revenue |
| Answer» E. | |
| 14. |
In perfect competition, in the long run, there will be |
| A. | ormal profits |
| B. | uper normal profits |
| C. | ess production |
| D. | ost will be falling |
| Answer» B. uper normal profits | |
| 15. |
MC curve cuts ______ curves at their minimum points |
| A. | VC and AC |
| B. | FC and AVC |
| C. | C and AFC |
| D. | ll of the above |
| Answer» B. FC and AVC | |
| 16. |
If marginal opportunity cost is falling, the PPF would be |
| A. | traight line |
| B. | oncave |
| C. | ackward leading |
| D. | onvex |
| Answer» E. | |
| 17. |
In the long run, normal profits are included in the _____ curve |
| A. | AC |
| B. | MC |
| C. | FC |
| D. | AC |
| Answer» B. MC | |
| 18. |
When two goods are perfect substitutes of each other, then |
| A. | RS is falling |
| B. | RS is rising |
| C. | RS is constant |
| D. | one of the above |
| Answer» D. one of the above | |
| 19. |
Calculate income elasticity for the household when the income of a household rises by 10% and the demand for Rice rises by 5%. |
| A. | 0.5 |
| B. | 0.5 |
| C. | 2 |
| Answer» C. 2 | |
| 20. |
Which of the following is a cause of an economic problem? |
| A. | carcity of resources |
| B. | lternative uses |
| C. | nlimited wants |
| D. | ll of the above |
| Answer» E. | |
| 21. |
Which of the following is not a feature of perfect competition? |
| A. | arge number of buyers and sellers |
| B. | mall number of buyers and sellers |
| C. | ree entry and exit |
| D. | oods is homogeneous |
| Answer» C. ree entry and exit | |
| 22. |
A firm under perfect competition will be making minimum losses (in the short run) at a point where |
| A. | C>MR |
| B. | R>MC |
| C. | C=MR |
| D. | C=AR |
| Answer» D. C=AR | |
| 23. |
Positive income elasticity implies that as income rises, demand for the commodity |
| A. | ises |
| B. | alls |
| C. | emains unchanged |
| D. | ecomes Zero |
| Answer» B. alls | |
| 24. |
In long run equilibrium, the pure monopolist can make pure profits because of |
| A. | locked entry |
| B. | he high price he charges |
| C. | he low LAC costs |
| D. | dvertising |
| Answer» B. he high price he charges | |
| 25. |
In perfect competition, the firm's _____ above AVC has the identical shape of the firm's supply curve |
| A. | arginal revenue curve |
| B. | arginal cost curve |
| C. | verage cost curve |
| D. | one of the above |
| Answer» C. verage cost curve | |
| 26. |
Lesser production of ____ would lead to lesser production in future. |
| A. | ublic goods |
| B. | onsumer goods |
| C. | apital goods |
| D. | gricultural goods |
| Answer» D. gricultural goods | |
| 27. |
If income elasticity for a good is 2, then it is a |
| A. | ecessity item |
| B. | nferior good |
| C. | uxury item |
| D. | omfortable item |
| Answer» D. omfortable item | |
| 28. |
All of the following are determinants of demand except |
| A. | astes and preferences |
| B. | uantity supplied |
| C. | ncome |
| D. | rice of related goods |
| Answer» C. ncome | |
| 29. |
If the demand for a good is inelastic, an increase in the price of the good will cause the total expenditure of the consumers of the good to |
| A. | emain the same |
| B. | ncrease |
| C. | ecrease |
| D. | ny of the above |
| Answer» C. ecrease | |
| 30. |
Rational decision making requires that |
| A. | ne's choices be arrived at logically and without errors |
| B. | ne's choices be consistent with one's goals |
| C. | ne's choices never vary |
| D. | ne makes choices that do not involve trade offs |
| Answer» C. ne's choices never vary | |
| 31. |
The various combination of goods that can be producedin any economy when it uses its available resources and technology efficiency are depicted by |
| A. | emand curve |
| B. | roduction curve |
| C. | upply curve |
| D. | roduction possibility curve |
| Answer» E. | |
| 32. |
Agricultural goods market depicts characteristics close to |
| A. | erfect competition |
| B. | ligopoly |
| C. | onopoly |
| D. | onopolistic competition |
| Answer» B. ligopoly | |
| 33. |
The kinked demand curve model of oligopoly assumes that |
| A. | esponse to a price increase is less than the response to a price decrease |
| B. | esponse to a price increase is more than the response to a price decrease |
| C. | lassticity of demand is constant regardless of whether price increases or decreases |
| D. | lasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases |
| Answer» B. esponse to a price increase is more than the response to a price decrease | |
| 34. |
The second glass of lemonade gives lesser satisfaction to a thirsty biy, this is a clear case of |
| A. | aw of demand |
| B. | aw of diminishing returns |
| C. | aw of diminishing marginal utility |
| D. | aw of supply |
| Answer» D. aw of supply | |
| 35. |
The producer is in equilibrium at a point where the cost line is |
| A. | bove the isoquant |
| B. | elow the isoquant |
| C. | utting the isoquant |
| D. | angent to isoquant |
| Answer» E. | |
| 36. |
In economics, what a consumer is ready to pay minus what he actually pays, is termed as |
| A. | onsumer's equilibrium |
| B. | onsumer's surplus |
| C. | onsumer's expenditure |
| D. | one of the above |
| Answer» C. onsumer's expenditure | |
| 37. |
Under which market structure, average revenue of a firm is equal to its marginal revenue |
| A. | ligopoly |
| B. | onopoly |
| C. | erfect competition |
| D. | onopolistic competition |
| Answer» D. onopolistic competition | |
| 38. |
Demand for final consumption arises in |
| A. | ousehold sector only |
| B. | overnment sector only |
| C. | oth household and government sector |
| D. | either household nor government sector |
| Answer» D. either household nor government sector | |
| 39. |
An isoquant slopes |
| A. | ownward to the left |
| B. | ownward to the right |
| C. | pward to the right |
| D. | pward to the left |
| Answer» C. pward to the right | |
| 40. |
The law of consumer surplus is based on |
| A. | ndifference curve analysis |
| B. | evealed preference theory |
| C. | aw of substitution |
| D. | he law of diminishing marginal utility |
| Answer» E. | |
| 41. |
If there are implicit costs of production |
| A. | conomic profit will be equal to accounting profit |
| B. | conomic profit will be less than accounting profit |
| C. | conomic profits will be zero |
| D. | conomic profit will be more than accounting profit. |
| Answer» C. conomic profits will be zero | |
| 42. |
Economics is the study of |
| A. | ow society manages its unlimited resources |
| B. | ow to reduce our wants until we are satisfied |
| C. | ow society manages its scarce resources |
| D. | ow to fully satisfy our unlimited wants |
| Answer» D. ow to fully satisfy our unlimited wants | |
| 43. |
A market structure in which many firms sell products that are similar but not identical is known as |
| A. | onopolistic competition |
| B. | onopoly |
| C. | erfect competition |
| D. | ligopoly |
| Answer» B. onopoly | |
| 44. |
In the long run, any firm will eventually leave the industry if |
| A. | rice does not at least cover average total cost |
| B. | rice does not equal marginal cost |
| C. | conomies of sale are being reaped |
| D. | rice is greater than long run average cost |
| Answer» B. rice does not equal marginal cost | |
| 45. |
A necessity is defined as a good having |
| A. | positive income elasticity of demand |
| B. | negative income elasticity of demand |
| C. | n income elasticity of demand between zero and 1 |
| D. | n income elasticity of more than 1 |
| Answer» D. n income elasticity of more than 1 | |
| 46. |
A competitive firm maximizes profit at the output level where |
| A. | rice equals marginal cost |
| B. | he slope of the firm's profit function is equal to zero |
| C. | arginal revenue equals marginal cost |
| D. | ll of the above |
| Answer» E. | |
| 47. |
Giffen goods are those goods |
| A. | or which demand increases as price increases |
| B. | hat have a high income elasticity of demand |
| C. | hat are in short supply |
| D. | one of the above |
| Answer» B. hat have a high income elasticity of demand | |
| 48. |
The MC curve cuts the AVC and ATC curves at |
| A. | he falling part of each |
| B. | ifferent points |
| C. | heir respective minimas |
| D. | he rising part of each |
| Answer» D. he rising part of each | |
| 49. |
If two goods were perfect substitutes of each other, it necessarily follows that |
| A. | n indifference curve relating the two goods will be curvilinear |
| B. | n indifference curve relating the two goods will be linear |
| C. | n indifference curve relating the two goods will be divided into two segments which meet at a right angle |
| D. | n indifference curve relating the two goods will be convex to the origin |
| Answer» C. n indifference curve relating the two goods will be divided into two segments which meet at a right angle | |
| 50. |
If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for |
| A. | oke will rise |
| B. | -Up will decrease |
| C. | oke and 7-Up will increase |
| D. | oke and 7-Up will decrease |
| Answer» E. | |