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This set of Micro economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 2 Set 6
Q1 | When the perfectly competitive firm and industry are both in long-run equilibrium
- P = MR = SMC = LMC
- P = MR = SAC = LAC \\
- P = MR = lowest point on the LAC curve
- all of the above.
Q2 | When the perfectly competitive firm but not the industry is in long-run equilibrium,
- P = MR = SMC = SAC
- P = MR = LMC = LAC
- P = MR = SMC = LMC = SAC =LAC
- P = MR = SMC = LMC = SAC = lowest point on the LAC curve.
Q3 | An increase in output in a perfectly competitive and constant cost industry which is in longrun equilibrium will come
- entirely from new firms
- entirely from existing firms
- either entirely from new firms or entirely from existing firms
- partly from new firms and partly from existing firms.
Q4 | If factor prices and factor quantities move in the same direction, we have
- a constant cost industry
- an increasing cost industry
- a decreasing cost industry
- any of the above.
Q5 | When the D curve is elastic, MR is
- 1
- 0
- positive
- negative.
Q6 | If P = Rs.10 at the point on the D curve where e = 0.5, MR is
- Rs.5
- Rs.0
- 2Rs.1
- 2Rs.10.
Q7 | The best, or optimum, level of output for the pure monopolist occurs at the point where
- STC is minimum
- TR = STC
- TR is maximum
- the TR and STC curves are parallel.
Q8 | At the best, or optimum, level of output for the pure monopolist,
- MR = SMC
- P = SMC
- P = lowest SAC
- P is highest.
Q9 | If the monopolist incurs losses in the short run, then in the long run
- the monopolist will go out of business
- the monopolist will stay in business
- the monopolist will break even
- any of the above is possible.
Q10 | The imposition of a maximum price at the point where the monopolist’s SMC curveintersects the D curve causes the monopolist to
- break even
- incur losses
- make profits
- any of the above.
Q11 | Price discrimination is an essential feature of
- Perfect competition
- Oligopoly
- Duopoly
- monopoly
Q12 | Under monopoly the slope of AR curve is:
- Upward sloping
- downward sloping
- horizontal
- None of these
Q13 | In a monopsony market there is:
- Single seller
- single buyer
- Two sellers
- two buyers
Q14 | Third degree price discrimination occurs when the monopolist charges different prices forthe same commodity in different
- Markets
- places
- continents
- countries
Q15 | Price discrimination is possible:
- Under any market form
- only under monopoly
- only under monopolistic completion
- only in perfect competition
Q16 | Monopolist maximizes profit at the point where
- MC = AC
- MC = MR
- AC = AR
- MR = AR
Q17 | At the point of equilibrium of a monopolist MC cuts MR curve
- From below
- from above
- at point of equality of AC and AR
- None
Q18 | A multiplant monopolist maximizes his profit at the point where:
- MR = MC1
- MR = MC2
- MR1 = MR2
- MR = MC1 = MC2
Q19 | Lerner Index is a measure of:
- Elasticity of demand
- Monopoly power
- Inequality
- None
Q20 | For a firm with monopoly power
- Price equals MC
- Price is less than MC
- Price exceeds MC
- None
Q21 | Railways is an example of :
- Simple monopoly
- differentiated monopoly
- Natural monopoly
- Monopsony
Q22 | A market with only one buyer and one seller is called
- Oligopsony
- monopsony
- Bilateral monopoly
- None
Q23 | Bilateral monopoly is a market with
- Single buyer
- Single seller
- Single buyer and single seller
- Few buyers and sellers
Q24 | The dual pricing system of charging high price during peak time and low price during ofpeak time is called
- Double pricing
- Dual pricing
- kinked pricing
- peak load pricing
Q25 | Selling more than one product at a single price
- Dumping
- Bundling
- Discounting
- Off loading