Micro Economics 2 Set 15 MCQs

Q1 | The demand curve faced by the a monopolistically competitive firmis very elastic if the degree of product differentiation is

Very low

Very high

Zero

Moderate

Q2 | Which one of the following is not a feature of monopolisticcompetition

Homogeneous products

Differentiated products

Selling cost

No uniform prices

Q3 | The book “The theory of Monopolistic Competition” is written by

Alfred Marshal

E H Chamberlin

Joan Robinson

J M Keynes

Q4 | The book “The Economics of Imperfect Competition” is written by

Alfred Marshal

E H Chamberlin

Joan Robinson

J M Keynes

Q5 | It is assumed that the cost curves of all the firms in themonopolistic competition are

Different due to product differentiation

Never considered in equilibrium

Never formulated

Same in spite of product differentiation

Q6 | Free entry into monopolistically competitive market ensures that all firms will produce at the lowest point of LAC

Always

Sometimes

Never

Cannot say

Q7 | Under monopolistic competition, the long run equilibrium of thefirm is established at the

Minimum point of LAC

Point where LAC is still falling

Point where LAC is rising

Minimum point of LMC

Q8 | In short run a firms in monopolistic competition

Always earns profit

Incurs loss

Earns normal profit only

May earn normal profit, abnormal profit or incur losses

Q9 | In long run all the firms in the monopolistic competition

Always earns profit

Incurs loss

Earns normal profit only

May earn normal profit, abnormal profit or incur losses

Q10 | The short run equilibrium level of output of the monopolisticcompetitor is given by

Price = MC

Price= AC

MC=MR

P=MR

Q11 | When a group of monopolistic competition attains the equilibrium,the firms in the group

Charge different prices, but produce identical outputs

Produce different output, but charge the same price

Charge different price and produce different output

None of the above

Q12 | The elasticity of average revenue curve of the monopolisticcompetitor, depends on

The extent of product differentiation

The number of firms

Number of buyers

Both A & B

Q13 | When demand curve is elastic, MR is

1

0

Positive

Negative

Q14 | The best or optimum level of output for the pure monopolist

MR=MC

P=MC

P=AC

Highest P

Q15 | Which type of competition leads to maximum exploitation ofconsumer

Perfect competition

Monopoly

Monopolistic competition

Oligopoly

Q16 | In the short run, the monopolist

Breaks even

Incurs loss

Makes profit

Any of the above

Q17 | The demand for the product of a monopoly firm is

Inelastic

Elastic

Unitary elastic

Perfectly inelastic

Q18 | If the monopolist incurs loss in the short run, then in the long run

The monopolist go out of business

The monopolist will stay in the business

The monopolist break even

Any of the above

Q19 | Which of the form of monopoly regulation is the most advantages tothe consumer

Price control

Lump sum tax

Per unit tax

All of the above

Q20 | The monopolist who is in

Short run equilibrium will also be in long run equilibrium

Long run equilibrium will also be in short run equilibrium

Long run equilibrium may or may not be in short run equilibrium

None of the above

Q21 | In long run the monopolist can earn abnormal profit because of

Blocked entry

High selling price

Low cost

Economies of scale

Q22 | Price discrimination under monopoly is of

One

Two

Three

Four

Q23 | The market in which there is a single seller is called

Oligopoly

Monopsony

Monopoly

Nine of the above

Q24 | Monopsony refers to

Single seller

A few sellers

Single buyer

A few buyers

Q25 | Discriminating monopoly is possible if two markets have

Differing elasticity of demand

Differing average cost

Same elasticity

Different average cost