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This set of Mathematical Economics Multiple Choice Questions & Answers (MCQs) focuses on Mathematical Economics Set 7
Q1 | In an input-output matrix, the principal diagonal of this matrix represents the amount of inputeach industry takes from ___output.
- other industry’s
- government sector’s
- household sector’s
- its own output
Q2 | P = a – bQ is the demand cure of a monopolist. Which of the following statements istrue?
- AR & MR are equal
- The rate of decline of MR is twice the rate of decline of AR
- The demand curve has unit elasticity
- slope of MR is zero.
Q3 | The best or optimum level of output for a perfectly competitive firm is given by the point:
- MR = AC
- MR = MC
- MR exceeds MC by the greater amount
- MR = MC and MC is rising
Q4 | In a monopoly, marginal revenue is:
- equal to AR
- less than AR
- more than AR
- initially less than AR then more than AR
Q5 | In monopoly, when the demand curve is elastic, MR is:
- 1
- 0
- positive
- negative
Q6 | In monopoly, if p = Rs. 10 at the point on the demand curve where η = 0.5, MR is:
- 5
- 0
- −1
- −10
Q7 | If the demand curve for a monopolist is P = 100 -20Q, then the marginal revenue of thatfirm is given by the equation:
- MR = 200 − 20Q
- MR = 50 − 40Q
- MR = 100 − 20Q
- MR = 100 − 40Q
Q8 | If the demand facing a monopolist is P = 100 − 10Q and marginal cost is constant at 20, thenthe profit maximizing price and quantity for this monopolist are:
- P = 60 and Q = 4
- P = 20 and Q = 8
- P = 90 and Q = 10
- P = 4 and Q = 60
Q9 | A profit-maximizing monopoly firm with a demand curve P = 50 − Q is a perfect pricediscriminator. If it has marginal costs of Rs. 10/unit and fixed costs of Rs. 30, it will produce_____ units of output and will make______ profit.
- 40; Rs. 400
- 40; Rs. 770
- 20; Rs. 370
- 20; Rs. 400
Q10 | A price discriminating Monopolist is considered more efficient than a single pricesmonopolist because:
- a price discriminating Monopolist knows its consumers better
- a price discriminating Monopolist can set prices more efficiently
- a price discriminating Monopolist produces a higher level of output
- a price discriminating Monopolist can produce it’s output at a lower cost
Q11 | One difference between perfect competition and monopolistic competition is that:
- In perfect competition, the products are slightly differentiated between firms
- There are a larger number of firms in monopolistic competition
- There are a smaller number of firms in perfectly competitive industries
- Firms in monopolistic competition have some degree of market power
Q12 | A perfectly competitive firm should reduce output or shut down in the short run if marketprice is equal to marginal cost and price is:
- greater than average total cost
- less than average total cost
- greater than average variable cost
- less than average variable cost
Q13 | The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The marketsupply curve is QS = 3 + P. The market will be in equilibrium if:
- P = 6 and Q =
- P = 3 and Q = 6
- P = 4 and Q = 4
- P = 5 and Q = 2
Q14 | In the short run, a monopolist will shut down if it is producing a level of output wheremarginal revenue is equal to short-run marginal cost and price is:
- less than average variable cost
- greater than average variable cost.
- less than average total cost
- greater than average total cost