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This set of Micro Economics analysis Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics Analysis Set 1
Q1 | Which of the following industry is most closely approximates theperfectly competitive model.
- automobiles
- cigarette
- newspaper
- wheat farming
Q2 | Under perfectly competitive market an individual seller is a
- price taker
- price maker
- individual seller can influence the price
- none of the above
Q3 | Uniform price is a feature of
- perfect competition
- monopoly
- monopolistic competition
- oligopoly
Q4 | Which of the following is not a feature of a perfectly competitivemarket
- large number of buyers and sellers
- homogeneous product
- group behaviour
- perfect competition
Q5 | A perfectly competitive firm gets only normal profit when
- mc = mr
- ac = ar
- ac < ar
- mc = ar
Q6 | Which one of the following is a feature of a perfect competition
- group behavior
- selling cost
- homogeneous product
- differentiated product
Q7 | Average revenue curve under perfect competition is
- upward sloping
- downward sloping
- horizontal straight line
- vertical straight line
Q8 | Marginal revenue curve under perfect competition is
- upward sloping
- downward sloping
- horizontal straight line
- vertical straight line
Q9 | Average revenue curve under imperfect competition is
- upward sloping
- downward sloping
- horizontal straight line
- vertical straight line
Q10 | Marginal revenue curve under imperfect competition is
- upward sloping
- downward sloping
- horizontal straight line
- vertical straight line
Q11 | Perfect competition prevails when the demand for the output ofeach producer is
- elastic
- perfectly elastic
- inelastic
- perfectly inelastic
Q12 | Equilibrium price is determined under perfect competition by
- the market demand
- the market supply
- the interaction between market demand and market supply
- none of the above
Q13 | In the market period, market supply curve is
- perfectly elastic
- perfectly inelastic
- elastic
- inelastic
Q14 | Given the supply of a commodity, in the market period, the price ofa commodity is determined by
- the market demand curve alone
- the market supply curve alone
- the market demand curve and the market supply curve
- none of the above
Q15 | Total profit is maximum when
- total revenue is equal to total cost
- total revenue is greater than total cost
- the positive difference between total revenue and total costs is largest.
- all of the above
Q16 | Total profits are maximized where
- tr equals tc
- tr curve and tc curve are parallel
- tr curve and tc curves are parallel and tc exceeds tr
- tr curve and tc curves are parallel and tr exceeds tc
Q17 | The equality between MC and MR is
- a necessary condition for equilibrium of the firm under perfect condition
- a sufficient condition for equilibrium of the firm under perfect competition
- a necessary but not sufficient condition for equilibrium of the firm under perfect condition
- a necessary and sufficient condition for equilibrium of the firm under perfect condition
Q18 | The condition of equilibrium of the industry under perfectcompetition is
- mc = mr
- mc = ac
- mc = mr = ar
- mc = ac = ar
Q19 | In the short-run, a competitive firm can earn
- normal profit
- super normal profit
- loss
- either a or b or c depending upon the level of average cost.
Q20 | If price is equal to average cost, in the short-run, the competitivefirm can earn
- only normal profit
- super normal profit
- loss
- all of the above
Q21 | If price is greater than average cost, in the short-run, thecompetitive firm can earn
- normal profit
- super normal profit
- loss
- all of the above
Q22 | If price is less than average cost, in the short-run, the competitivefirm can earn
- normal profit
- super normal profit
- loss
- all of the above
Q23 | Break-even point is a point where price is equal to
- ac
- avc
- afc
- mc
Q24 | Shut-down point is a point where price is equal to
- ac
- avc
- afc
- mc
Q25 | In the long run, a competitive firm can earn
- normal profit
- super normal profit
- loss
- any of the above