economics MCQs – Page 232

Practise multiple-choice questions from economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

economics Mcqs

1. the national economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

4621. Assume that firms in an oligopoly are currently colluding to set price and output to maximise total industry profit. If the oligopolists are forced to stop colluding, the price charged by the oligopolists will _________ and the total output produced will __________?
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A. increase; decrease

B. increase; increase

C. decrease; increase

D. decrease; decrease

4622. If the ABC Typing Service is earning a rate of return greater than the return necessary for the business to continue operations, then ?
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A. total costs exceed normal profit

B. the firm is earning are economic profit

C. normal profit is zero

D. total costs exceed total revenue

4623. The kinked demand curve model of oligopoly assumes the elasticity of demand ?
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A. is perfectly elastic if price increases and perfectly inelastic if price decreases

B. is constant regardless of whether price increase of decrease.

C. in response to a price increases is more elastic than the elasticity of demand in response to a price decrease

D. in response to a price increase is less elastic than the elasticity of demand in response to a price decrease

4624. The formula for average variable cost (AVC) is ?
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A. Dq/DTVC

B. TVC/q

C. q/TVC

D. DTVC/Dq

4625. Which of the following statements is False ?
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A. participants in a contestable market are continuously faced with competition or the threat of competition because entry is cheap

B. In a contestable market forces will guarantee that the firms produce efficiently or be driven out of business

C. In a contestable market, economic profits cannot persist in the long run.

D. For a market to be contestable, the product must be produced with a labor-intensive technology

4626. If you were running a firm in a perfectly competitive industry, you would be spending your time making decisions on ?
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A. none of these

B. how much of each input to use?

C. how much to spend on advertising?

D. What price to charge

4627. Monopolistic competition differs from perfect competition primarily because ?
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A. in monopolistic competition entry into the industry is blocked

B. in monopolistic competition, firms can differentiate their products

C. in perfect competition firms can differentiate their products

D. in monopolistic competition there are relatively few barriers to entry.

4628. A firm will shut down in the short run if ?
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A. variable costs exceed revenues

B. it is suffering a loss.

C. fixed costs exceed revenues.

D. total costs exceed revenues

4629. In a monopoly, marginal revenue is ?
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A. always greater than price

B. always equal to price

C. less than price at low levels of output and greater than price at high levels of output

D. lower than price for all units other than the first

4630. Which of the following statements best describes the outcome under monopolistic competition ?
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A. It is not efficient because too little output is produced and the output that is produced is produced at a cost above minimum average total cost

B. It is not efficient because too little output is produced but is efficient in that the output produced is produced at minimum average total cost.

C. It is efficient because entry is free and economic profits are eliminated in the long run.

D. It is efficient because the right amount of output is produced, but not efficient in that the output produced is produced at a cost above minimum average total cost

4631. Diminishing marginal return implies ?
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A. decreasing average fixed costs.

B. decreasing average variable costs.

C. decreasing marginal costs.

D. increasing marginal costs.

4632. An industry that has a relatively small number of firms that dominate the market is called ?
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A. a natural monopoly

B. a merged industry

C. a concentrated industry

D. a colluding industry

4633. A group of firms that gets together to make price and output decisions is called ?
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A. price leadership