Micro Economics Analysis Set 5 MCQs

Q1 | Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stabilityReason (R) Oligopolists face a demand curve that is highly elasticfor price increases and less elastic for price reductions

(a) is true but (r) is false.

both (a) and (r) are false

both (a) and (r) are true and (r) is the correct explanation of (a)

both (a) and (r) are true but (r) is not the correct explanation of(a)

Q2 | Match the followingA B (i). Demand for inputs Hall and Hitch (ii). Oligopoly Single buyer (iii). Kinked demand theory Cartels (iv). Monopsony Derived demand Codes;

(i) (ii) (iii) (iv)

(i) (iii) (ii) (iv)

(iv) (iii) (ii) (i)

(iv) (iii) (i) (ii)

Q3 | If the hourly wage is Rs.10, and the firm produces 5 additional units of the commodity with an additional hour of labour time, then marginal cost is

0.5

2

5

10

Q4 | The equilibrium level of output for a perfectly competitive marketis

mc = ac

mc = mr

tc = tr

none of the above

Q5 | The term ‘monopsony’ refers to

a single seller

a single buyer

a single buyer and a single seller

none of the above

Q6 | The demand curve for labour under perfectly competitive marketis

downward sloping

horizontal straight line

upward sloping

none of the above

Q7 | The supply curve of the input that a firm faces under a perfectlycompetitive market is

downward sloping

horizontal supply curve

upward sloping

none of the above

Q8 | The supply curve of an input that a firm faces under animperfectly competitive market is

downward sloping

horizontal supply curve

upward sloping

none of the above

Q9 | Let labour is the only variable input, a monopsonist maximizeshis or her profit when

mpl = mel

mpl < mpl

mpl > mpl

none of the above

Q10 | A profit maximizing firm under a perfectly competitive marketemploys more and more variable input labour until

mrpl < mel = w

mrpl > mel = w

mrpl = mel = w

none of the above

Q11 | To minimize cost of production at any level of output themonopsonist should continue to substitute labour and capital until

mel . mpl = mek . mpk

mel / mpl = mek / mpk

mel . mpl > mek . mpk

mel / mpl > mek / mpk

Q12 | In Chamberlin and Kinked demand curve model, the oligoposist

recognize their interdependence

do not collude

tend to keep prices constant

all of the above

Q13 | In the case of price leadership by the dominant firm all the firms in the purely oligopolistic industry will produce their best level of output

always

never

some times

often

Q14 | If an oligopolist incurs losses in the short run, then in the longrun

the oligopolist will go out of business

the oligopolist will stay in business

the oligopolist will break-even

any of the above

Q15 | Existence of large number of buyers and sellers andhomogenous product is a feature of :

monopoly

duopoly

perfect competition

oligopoly

Q16 | Product differentiation is a characteristic of:

monopoly

perfect competition

monopolistic competition

oligopoly

Q17 | A firm under Perfect Competition is a:

price maker

price taker

monopolist

none of these

Q18 | Selling cost is a feature of :

perfect competition

monopoly

monopolistic competition

oligopoly

Q19 | Oligopoly is characterized by:

a few sellers

one seller

large sellers

all of these

Q20 | When there are only two sellers, the market is called as:

oligopoly

monopsony

duopoly

bilateral monopoly

Q21 | Perfect competition is a market situation under which acommodity is sold at:

uniform price

different price

higher price

lower price

Q22 | The demand curve of a firm under perfect competition is :

inelastic

perfectly inelastic

infinitely elastic

unitary elastic

Q23 | The price of a commodity under the perfect competition isdetermined by:

buyer

seller

firm

market forces

Q24 | Equilibrium literally means:

balance

imbalance

change

none of these

Q25 | The price at which the demand and supply are equal is called:

normal price

support price

equilibrium price

fair price