On This Page
This set of Micro economics 2 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 2 Set 9
Q1 | When a perfectly competitive industry is in long-run equilibrium, all firms in the industry
- earn zero economic profits
- produce a level of output where short-run marginal cost is equal to short-run average total cost
- produce a level of output where long-run marginal cost is equal to long-run average cost
- All of the above are correct
Q2 | The short-run supply curve of a perfectly competitive firm
- is equal to that portion of the short-run marginal cost curve that is above the average variable cost curve
- is equal to that portion of the short-run marginal cost curve that is above the average total cost curve
- is equal to that portion of the short-run average total cost curve that is above the average variable cost curve
- None of the above is correct
Q3 | A monopolized market is in long-run equilibrium when
- zero economic profit is earned by the monopolist
- production takes place where price is equal to long-run marginal cost and long-run average cost
- production takes place where long-run marginal cost is equal to marginal revenue and price is not below long-run average cost
- All of the above are correct
Q4 | A monopolist produces 14,000 units of output and charges Rs.14 per unit. Its marginalrevenue is Rs.8, its marginal cost is Rs.7 and rising, its average total cost is Rs.10, and its average variable cost is Rs.9. The monopolist should
- increase curve output, which will result in an increase in the firm\s positive economic profit
- increase output, which will reduce the firm\s economic losses
- shut down, which will reduce the firm\s economic losses
- decrease output, which will result in an increase in the firm\s positive economic
Q5 | Which of the following types of firms is likely to be a monopolistic competitor?
- A local telephone company
- An automobile manufacturer
- A restaurant
- All of the above
Q6 | Which of the following is a differentiated product?
- A hamburger
- A shirt
- An automobile
- All of the above
Q7 | Which of the following is a characteristic of monopolistic competition?
- Few sellers
- A differentiated product
- Easy entry into and exit from the industry
- All of the above
Q8 | The demand faced by a monopolistically competitive firm is
- perfectly elastic
- elastic
- unit elastic
- inelastic
Q9 | If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price isequal to average total cost, then the firm
- should shut down
- should decrease output, but should not shut down
- should increase output
- None of the above is correct
Q10 | Product variation refers to
- an activity undertaken by a firm to increase demand
- a problem with quality control that tends to decrease demand
- an activity undertaken by a firm to make demand more price inelastic
- None of the above
Q11 | Which of the following is a criticism of the theory of monopolistic competition?
- It is difficult to define a monopolistically competitive market and to determine the firms and products that comprise it
- When product differentiation is slight, each firm\s demand curve is nearly horizontal so the perfectly competitive solution provides an adequate approximation to the monopolistically competitive solution
- When there are strong brand preferences and few producers of many differentiated products, or when there are many producers but only a few compete as rivals for any given consumer, then the oligopoly solution provides an adequate approximation to the monopolistically competitive solution
- All of the above are correct
Q12 | Which of the following industries is most likely to be monopolistically competitive?
- The automobile industry
- The steel industry
- The car repair industry
- The electrical generating industry
Q13 | Marginal revenue is equal to price for which one of the following types of marketstructure?
- Monopoly
- Perfect competition
- Monopolistic competition
- Oligopoly
Q14 | Monopoly market is :
- Single seller market
- single buyer market
- single buyer and seller
- None
Q15 | Third degree price discrimination occurs when the monopolist chargesdifferent prices for the same commodity in different
- Markets
- places
- continents
- countries
Q16 | Lerner Index is a measure of:
- Elasticity of demand
- Monopoly power
- Inequality
Q17 | The dual pricing system of charging high price during peak time and low price during of peak time is called
- Double pricing
- Dual pricing
- kinked pricing
- peak load pricing
Q18 | The marker structure which have very large number of sellers selling Identicalproducts is called
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly
Q19 | The marker structure with Perfect mobility of factors and products is called
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly
Q20 | The marker structure with Perfect knowledge is called
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly
Q21 | The large number of firms producing the same commodity ensure that theindividual firm has no control over
- Price of the commodity
- The quantity of the commodity
- Both of the above
- None of the above
Q22 | Individual firm has no control on the price of the commodity in the market is acondition of
- Perfect competition
- Monopoly
- Monopolistic competition
- Bilateral monopoly
Q23 | In a Perfect competitive market
- Firm is the price giver and the industry is a price taker
- Firm is the price taker and the industry is a price giver
- Both are price makers
- Both are price takers
Q24 | Under perfect market conditions the individual firm in the industry has------------------- control over the price of the product.
- Some
- Full
- No
- None of the above
Q25 | The marker structure which have large number of sellers selling differentiatedproduct is called
- Perfect competition
- Monopoly
- Monopolistic competition
- Oligopoly