2. When there is Zero or No capital mobility the BP curve is:
Correct : C. Vertical
3. When there is High capital mobility the BP curve is:
Correct : D. Horizontal
4. Which policy is recommended under flexible exchange rate system:
Correct : C. expansionary monetary policy
5. Khan’s multiplier is known as:
Correct : B. employment multiplier
6. Keynes’s multiplier is known as:
Correct : A. investment multiplier
7. The foreign trade multiplier also known as the:
Correct : D. export multiplier .
8. Investment Multiplier explains measures the change income as result of change in:
Correct : C. Employment
9. Under perfectly competitive market an individual seller is a
Correct : A. Price taker
10. Uniform price is a feature of
Correct : A. Perfect competition
11. Which of the following is not a feature of a perfectly competitive market
Correct : C. Group behaviour
12. A perfectly competitive firm gets only normal profit when
Correct : B. AC = AR
13. Which one of the following is a feature of a perfect competition
Correct : C. Homogeneous product
14. Average revenue curve under perfect competition is
Correct : C. Horizontal straight line
15. Marginal revenue curve under perfect competition is
Correct : C. Horizontal straight line
16. Average revenue curve under imperfect competition is
Correct : D. Vertical straight line
17. Marginal revenue curve under imperfect competition is
Correct : D. Vertical straight line
18. Perfect competition prevails when the demand for the output of
each producer is
Correct : D. Perfectly inelastic
19. Equilibrium price is determined under perfect competition by
Correct : C. The interaction between market demand and market supply
20. In the market period, market supply curve is
Correct : B. Perfectly inelastic
21. Given the supply of a commodity, in the market period, the price of
a commodity is determined by
Correct : A. The market demand curve alone
22. Total profits are maximized where
Correct : D. TR curve and TC curves are parallel and TR exceeds TC
23. The equality between MC and MR is
Correct : C. A necessary but not sufficient condition for equilibrium of the firm under perfect condition
24. In the short-run, a competitive firm can earn
Correct : D. Either A or B or C depending
25. If price is equal to average cost, in the short-run, the competitive
firm can earn
Correct : A. Only normal profit
26. If price is greater than average cost, in the short-run, the
competitive firm can earn
Correct : B. Super normal profit
27. If price is less than average cost, in the short-run, the competitive
firm can earn
Correct : C. Loss
28. Break-even point is a point where price is equal to
Correct : A. AC
29. Shut-down point is a point where price is equal to
Correct : B. AVC
30. In the long run, a competitive firm can earn
Correct : A. Normal profit
31. The importance of time element in price determination was firstly
analyzed by
Correct : B. Alfred Marshall
32. In the short-period,
Correct : B. Some factors are fixed and others are variable
33. In the long-period,
Correct : C. All factors are variable
34. At the optimum short-run level of output, the firm will be
Correct : C. Either maximizing total profit or minimizing total losses
35. When the perfectly competitive firm and industry are both in long
run equilibrium
Correct : D. All of the above
36. Monopolistic competition is characterized by
Correct : D. Many firms selling differentiated products
37. The theory of monopolistic competition was popularized by
Correct : C. Chamberlin
38. A monopolistically competitive market is distinguished from perfect
competition by the fact that
Correct : C. It deals with differentiated products
39. Excess capacity is a hallmark of
Correct : D. Monopolistic competition
40. Monopolistically competitive firms
Correct : D. Both A and B
41. Selling cost assumes paramount importance in
Correct : C. Monopolistic competition
42. Under monopolistic competition, there can be freedom of entry in
the sense that there is freedom to produce
Correct : A. Close substitutes
43. A firm under monopolistic competition advertise because
Correct : C. To increase revenue and sales
44. In the case of monopolistic competition,
Correct : A. Short run supply curve cannot be defined
45. Under monopolistic competition, super normal profit arise when
Correct : C. AR>AC
46. Which of the following condition are met in the long run equilibrium
of the monopolistic competitor earning only normal profit
Correct : B. P=AC
47. The term group equilibrium is referred to
Correct : B. Monopolistic competition
48. Increase or decrease in the level of production by a monopolistically competitive firm have ------- impact on price and output decisions
of other firms
Correct : D. Negligible
49. Monopolistic competitive firm fixes the price of its product
Correct : B. Close to the prices of close substitutes
50. Under monopolistic competition, an increase in the number of firms producing close substitutes will make the demand curve of
each firm
Correct : B. Elastic
51. The demand curve faced by the a monopolistically competitive firm
is very elastic if the degree of product differentiation is
Correct : B. Very high
52. Which one of the following is not a feature of monopolistic
competition
Correct : A. Homogeneous products
53. The book “The theory of Monopolistic Competition” is written by
Correct : B. E H Chamberlin
54. The book “The Economics of Imperfect Competition” is written by
Correct : C. Joan Robinson
55. It is assumed that the cost curves of all the firms in the
monopolistic competition are
Correct : D. Same in spite of product differentiation
56. Free entry into monopolistically competitive market ensures that all firms will produce at the lowest point of LAC
Correct : C. Never
57. Under monopolistic competition, the long run equilibrium of the
firm is established at the
Correct : B. Point where LAC is still falling
58. In short run a firms in monopolistic competition
Correct : D. May earn normal profit, abnormal profit or incur losses
59. In long run all the firms in the monopolistic competition
Correct : C. Earns normal profit only
60. The short run equilibrium level of output of the monopolistic
competitor is given by
Correct : C. MC=MR
61. When a group of monopolistic competition attains the equilibrium,
the firms in the group
Correct : B. Produce different output, but charge the same price
62. The elasticity of average revenue curve of the monopolistic
competitor, depends on
Correct : D. Both A & B
63. When demand curve is elastic, MR is
Correct : C. Positive
64. The best or optimum level of output for the pure monopolist
Correct : A. MR=MC
65. Which type of competition leads to maximum exploitation of
consumer
Correct : B. Monopoly
66. In the short run, the monopolist
Correct : D. Any of the above
67. The demand for the product of a monopoly firm is
Correct : B. Elastic
68. If the monopolist incurs loss in the short run, then in the long run
Correct : D. Any of the above
69. Which of the form of monopoly regulation is the most advantages to
the consumer
Correct : A. Price control
70. The monopolist who is in
Correct : B. Long run equilibrium will also be in short run equilibrium
71. In long run the monopolist can earn abnormal profit because of
Correct : A. Blocked entry
72. Price discrimination under monopoly is of
Correct : C. Three
73. The market in which there is a single seller is called
Correct : C. Monopoly
74. Monopsony refers to
Correct : C. Single buyer
75. Discriminating monopoly is possible if two markets have
Correct : A. Differing elasticity of demand
76. Monopolist can fix
Correct : C. Either price and output
77. A discrimination monopolist charges in a market
Correct : A. Lower prices if it has lower elasticity
78. A firm practicing price discrimination will be
Correct : D. Charging different prices in different markets
79. The best level of output for the monopolist is
Correct : C. TR and TC are parallel
80. If the monopolist faces identical demand for his commodity in the two separate markets, by practicing third degree price
discrimination
Correct : C. Cannot increase his TR and profit
81. Under pure monopoly, there will be
Correct : A. No distinction between firm and industry
82. Monopolist will not produce that portion of demand curve where the
elasticity of demand
Correct : B. Less than unity
83. Under monopoly, the equilibrium price is
Correct : C. More than MC
84. The cross elasticity of demand for the monopolist product is
Correct : A. Very low
85. Which of the following is known as the perfect price discrimination
Correct : A. First degree price discrimination
86. A monopolist usually earns
Correct : A. Economic profit
87. Price discrimination is possible
Correct : B. Only under monopoly
88. Who introduced various types of price discrimination
Correct : C. A C Pigou
89. Oligopoly is a market situation characterized by
Correct : D. A few sellers
90. Price leadership can be in the form of
Correct : D. All of the above
91. Assertion (A) Many oligopolistic industries exhibit an appreciable
degree of Price rigidity or stability Reason (R) Oligopolists face a demand curve that is highly elastic for price increases and less elastic for price reductions
Correct : C. Both (A) and (R) are true and (R) is the correct explanation of (A)
92. The equilibrium level of output for a perfectly competitive market
is
Correct : B. MC = MR
93. The term ‘monopsony’ refers to
Correct : B. a single buyer
94. In Chamberlin and Kinked demand curve model, the oligoposist
Correct : D. All of the above
95. If an oligopolist incurs losses in the short run, then in the long
run
Correct : D. Any of the above
96. Existence of large number of buyers and sellers and
homogenous product is a feature of :
Correct : C. Perfect Competition
97. Product differentiation is a characteristic of: