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This set of Micro economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 2 Set 5
Q1 | Homogenous product means products are:
- Similar
- Close substitutes
- Quite alike
- None of the above
Q2 | Monopoly means:
- Single firm
- No close substitutes
- Barriers to entry
- All of the above
Q3 | ‘Homogenous products’ is a characteristic of:
- Perfect competition only
- Perfect oligopoly only
- Both (a) and (b)
- None of the above
Q4 | There is inverse relation between price and demand for the product of a firm under:
- Monopoly only
- Monopolistic competition only
- Both under monopoly and monopolistic competition
- Perfect competition only
Q5 | A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenuewill be:
- Greater than Average Revenue
- Less than Average Revenue
- Equal to Average Revenue
- Zero
Q6 | Differentiated products is a characteristic of:
- Monopolistic competition only
- Oligopoly only
- Both monopolistic competition and oligopoly
- Monopoly
Q7 | Demand curve of a firm is perfectly elastic under:
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly
Q8 | Marginal revenue of a firm is constant throughout under:
- Perfect competition
- Monopolistic competition
- Oligopoly
- All the above
Q9 | A seller cannot influence the market price under
- Perfect Competition
- Monopoly
- Monopolistic competition
- All of the above
Q10 | There are only a few sellers under
- Perfect Competition
- Monopolistic competition
- Monopoly
- Oligopoly
Q11 | Under perfect competition, MR curve is:
- Horizontal
- Vertical
- Falling
- Rising
Q12 | When AR is above AC, firm earns:
- Supernormal profit
- Loss
- Breakeven point
- Minimise losses
Q13 | When AR = AC, firm is at:
- Supernormal profit point
- Loss making point
- Breakeven point
- Minimise losses point
Q14 | When AC is more than AR, what is the firm doing?
- Making supernormal profit
- Incurring loss
- Having breakeven point
- Minimising losses
Q15 | When AR passes through some point between minimum AVC and AC, it is called:
- Supernormal profit
- Loss
- Breakeven point
- Minimising losses
Q16 | When AR passes through minimum point of AVC, it is called:
- Breakeven point
- Shutdown point
- Normal profit point
- Supernormal profit point
Q17 | Breakeven point means:
- AR = AC
- TR = TC
- No profit, no loss
- All of the above
Q18 | Which of the following industries most closely approximates the perfectly competitivemodel?
- Automobile
- cigarette
- newspaper
- wheat farming.
Q19 | Given the supply of a commodity in the market period, the price of the commodity isdetermined by
- the market demand curve alone
- the market supply curve alone
- the market demand curve and the market supply curve
- none of the above.
Q20 | Total profits are maximized where
- TR equals TC
- the TR curve and the TC curve are parallel
- the TR curve and the TC curve are parallel and TC exceeds TR
- the TR curve and the TC curve are parallel and TR exceeds TC.
Q21 | The best, or optimum, level of output for a perfectly competitive firm is given by the pointwhere
- MR equals AC
- MR equals MC
- MR exceeds MC by the greatest amount
- MR equals MC and MC is rising.
Q22 | At the best, or optimum, short-run level of output, the firm will be
- maximizing total profits
- minimizing total losses
- either maximizing total profits or minimizing total losses
- maximizing profits per unit.
Q23 | If P exceeds AVC but is smaller than AC at the best level of output, the firm is
- making a profit
- incurring a loss but should continue to produce in the short run
- incurring a loss and should stop producing immediately
- breaking even.
Q24 | At the shut-down point,
- P =AVC
- TR = TVC
- the total losses of the firm equal TFC
- all of the above.
Q25 | The short-run supply curve of the perfectly competitive firm is given by
- the rising portion of its MC curve over and above the shut-down point
- the rising portion of its MC curve over and above the break-even point
- the rising portion of its MC curve over and above the AC curve
- the rising portion of its MC curve.