economics MCQs – Page 233

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 Review each marked answer and report any item that may be outdated or unclear.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

4641. In contestable markets, large oligopolistic firms, end up behaving like ?
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A. a cartel

B. a monopoly

C. perfectly competitive firms

D. monopolistically competitive firms.

4642. In the long run ?
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A. all firms must make economic profits.

B. there are no fixed factors of production

C. a firm can vary all inputs, but it cannot change the mix of inputs it uses.

D. a firm can shut down, but it cannot exit the industry

4643. Which statement is False ?
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A. There are no fixed costs in the long run

B. Fixed costs are zero if the firms is producing nothing.

C. Fixed costs are the difference between total costs and total variable costs

D. Fixed costs do not depend on the firms level of output

4644. When one firm in the breakfast cereal market started an advertising campaign that stressed the nutritional value of its cereals, all other cereal manufacturers started similar advertising campaign This suggests that the breakfast cereal market is ?
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A. monopolistically competitive

B. indeterminate from this information

C. oligopolistic

D. perfectly competitive

4645. Relative to a competitively organized industry a monopoly ?
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A. Produces less output, charges lower prices and earns only a normal profit

B. Produces less output, charges higher prices and earns economic profits.

C. produces less output, charges lower prices and earns economic profits

D. produces more output, charges higher prices and earns economics profits

4646. The normal rate of profit for relatively risk-free firms will be _________ the interest rate on risk-free government bonds?
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A. approximately one-half

B. smaller than

C. approximately equal to

D. larger than

4647. Which of the following statements best describes the outcome under monopolistic competition ?
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A. In monopolistic competition, there are too many firms and each firm produce a slightly different product at a scale that is less than optimal

B. In monopolistic competition there are too few firms and each firm produce a slightly different product at scale that is greater than optimal

C. in monopolistic competition there is the correct number of firm and each firm produces a slightly different product at an optimal scale.

D. In monopolistic competition there are too many firms and each firm produce a slightly different product at the optimal scale

4648. If firms can neither enter nor leaves an industry, the relevant time period is the ?
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A. immediate run

B. short run

C. intermediate run

D. long run

4649. A monopolistically competitive firm that is incurring a loss will produce as long as the price that the firm charges is sufficient to cover ?
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A. advertising costs

B. fixed costs

C. marginal costs

D. variable costs

4650. A graph showing all the combinations capital and labor available for a given total cost is the ?
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A. isocost line.

B. expenditure set

C. isoquant

D. budget constraint

4651. The rate at which a firm can substitute capital for labour and hold output constant is the ?
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A. marginal rate of production

B. law of diminishing marginal returns.

C. marginal rate of factor substitution

D. marginal rate of substitution

4652. In contestable markets large oligopolistic firms end up behaving like ?
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A. monopolistically competitive firms

B. perfectly competitive firms

C. a cartel

D. a monopoly.

4653. The costs that depend on output in the short run are ?
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A. total fixed cost only.

B. total variable costs only.

C. both total variable costs and total costs.

D. total costs only

4654. If the total product of two workers is 80 and the total product of 3 workers is 90 then the average product of the third worker is ________ and the marginal product of the third worker is _________?
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A. 160; 270

B. 10; 30

C. 10; 3.33

D. 30; 10

4655. When ________ substitutes exist, a monopolist has ________ power to raise price?
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A. more; less

B. no; infinite

C. more; more

D. fewer; less

4656. A form of industry structure characterized by a few firms, each large enough to influence market price is ?
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A. monopolistic competition

B. perfect competition

C. oligopoly

D. monopoly

4657. An industry that realizes such large economies of scale in producing its product that single-firm production of that good or service is most efficient is called ?
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A. a natural monopoly

B. a government franchise monopoly

C. a fixed cost monopoly

D. a economies of scale monopoly

4658. A graph showing all the combinations of capital and labor that can used to produce a given amount of output is ?
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A. a production functions

B. an isocost line

C. an indifference curves.

D. an isoquant.

4659. In which of the following circumstances would a cartel be most likely to work ?
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A. The fast-food market where there are a large number of producers but the demand for fast food is inelastic

B. The market for copper, where there are very few producers and the product is standardized.

C. The automobile industry, where there are few producers but there is great product differentiation.

D. The coffee market where the product is standardized and there are a large number of coffee growers.

4660. Suppose Handels Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be ?
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A. downward sloping to the right

B. U-shaped

C. upward sloping to the right

D. Horizontal

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