1. Which of the following industry is most closely approximates the
perfectly competitive model.
Correct : D. wheat farming
2. Under perfectly competitive market an individual seller is a
Correct : A. price taker
3. Uniform price is a feature of
Correct : A. perfect competition
4. Which of the following is not a feature of a perfectly competitive
market
Correct : C. group behaviour
5. A perfectly competitive firm gets only normal profit when
Correct : B. ac = ar
6. Which one of the following is a feature of a perfect competition
Correct : C. homogeneous product
7. Average revenue curve under perfect competition is
Correct : C. horizontal straight line
8. Marginal revenue curve under perfect competition is
Correct : C. horizontal straight line
9. Average revenue curve under imperfect competition is
Correct : B. downward sloping
10. Marginal revenue curve under imperfect competition is
Correct : B. downward sloping
11. Perfect competition prevails when the demand for the output of
each producer is
Correct : D. perfectly inelastic
12. Equilibrium price is determined under perfect competition by
Correct : C. the interaction between market demand and market supply
13. In the market period, market supply curve is
Correct : B. perfectly inelastic
14. 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
15. Total profit is maximum when
Correct : C. the positive difference between total revenue and total costs is largest.
16. Total profits are maximized where
Correct : D. tr curve and tc curves are parallel and tr exceeds tc
17. The equality between MC and MR is
Correct : C. a necessary but not sufficient condition for equilibrium of the firm under perfect condition
18. The condition of equilibrium of the industry under perfect
competition is
Correct : D. mc = ac = ar
19. In the short-run, a competitive firm can earn
Correct : D. either a or b or c depending upon the level of average cost.
20. If price is equal to average cost, in the short-run, the competitive
firm can earn
Correct : A. only normal profit
21. If price is greater than average cost, in the short-run, the
competitive firm can earn
Correct : B. super normal profit
22. If price is less than average cost, in the short-run, the competitive
firm can earn
Correct : C. loss
23. Break-even point is a point where price is equal to
Correct : A. ac
24. Shut-down point is a point where price is equal to
Correct : B. avc
25. In the long run, a competitive firm can earn
Correct : A. normal profit
26. The importance of time element in price determination was firstly
analyzed by
Correct : B. alfred marshall
27. In the market period, price determination in the case of a
perishable commodity is influenced by its
Correct : A. demand
28. In the short-period,
Correct : B. some factors are fixed and others are variable
29. In the long-period,
Correct : C. all factors are variable
30. Zero economic profit arises in the long run in the case of
Correct : A. perfect competition
31. Zero economic profit includes
Correct : B. normal profit
32. Economic efficiency is achieved in the long run in the case of
Correct : A. perfect competition
33. Consumer surplus will be maximum in the case of
Correct : A. perfect competition
34. At the optimum short-run level of output, the firm will be
Correct : C. either maximizing total profit or minimizing total losses
35. The short-run supply curve of a perfectly competitive firm is given by
Correct : A. rising portion of the mc curve over and above the shut-down point
36. When the perfectly competitive firm and industry are both in long
run equilibrium
Correct : D. all of the above
37. Monopolistic competition is characterized by
Correct : D. many firms selling differentiated products
38. The theory of monopolistic competition was popularized by
Correct : C. chamberlin
39. A monopolistically competitive market is distinguished from perfect
competition by the fact that
Correct : C. it deals with differentiated products
40. Excess capacity is a hallmark of
Correct : D. monopolistic competition
41. Monopolistically competitive firms
Correct : D. both a and b
42. Selling cost assumes paramount importance in
Correct : C. monopolistic competition
43. Under monopolistic competition, there can be freedom of entry in
the sense that there is freedom to produce
Correct : A. close substitutes
44. A firm under monopolistic competition advertise because
Correct : C. to increase revenue and sales
45. In the case of monopolistic competition,
Correct : A. short run supply curve cannot be defined
46. Under monopolistic competition, super normal profit arise when
Correct : C. ar>ac
47. Which of the following condition are met in the long run equilibrium
of the monopolistic competitor earning only normal profit
Correct : B. p=ac
48. The term group equilibrium is referred to
Correct : B. monopolistic competition
49. 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
50. Monopolistic competitive firm fixes the price of its product
Correct : B. close to the prices of close substitutes
51. Under monopolistic competition, an increase in the number of firms producing close substitutes will make the demand curve of
each firm
Correct : B. elastic
52. The demand curve faced by the a monopolistically competitive firm
is very elastic if the degree of product differentiation is
Correct : B. very high
53. Which one of the following is not a feature of monopolistic
competition
Correct : A. homogeneous products
54. The book “The theory of Monopolistic Competition” is written by
Correct : B. e h chamberlin
55. The book “The Economics of Imperfect Competition” is written by
Correct : C. joan robinson
56. It is assumed that the cost curves of all the firms in the
monopolistic competition are
Correct : D. same in spite of product differentiation
57. Free entry into monopolistically competitive market ensures that all
firms will produce at the lowest point of LAC
Correct : C. never
58. Under monopolistic competition, the long run equilibrium of the
firm is established at the
Correct : B. point where lac is still falling
59. In short run a firms in monopolistic competition
Correct : D. may earn normal profit, abnormal profit or incur losses
60. In long run all the firms in the monopolistic competition
Correct : C. earns normal profit only
61. The short run equilibrium level of output of the monopolistic
competitor is given by
Correct : C. mc=mr
62. When a group of monopolistic competition attains the equilibrium,
the firms in the group
Correct : B. produce different output, but charge the same price
63. The elasticity of average revenue curve of the monopolistic
competitor, depends on
Correct : D. both a & b
64. Under monopolistic competition, the demand curve of the product of an individual firm depends on the nature and prices of close
substitutes
Correct : A. true
65. When demand curve is elastic, MR is
Correct : C. positive
66. The best or optimum level of output for the pure monopolist
Correct : A. mr=mc
67. Which type of competition leads to maximum exploitation of
consumer
Correct : B. monopoly
68. In the short run, the monopolist
Correct : D. any of the above
69. The demand for the product of a monopoly firm is
Correct : B. elastic
70. If the monopolist incurs loss in the short run, then in the long run
Correct : D. any of the above
71. Which of the form of monopoly regulation is the most advantages to
the consumer
Correct : A. price control
72. The monopolist who is in
Correct : B. long run equilibrium will also be in short run equilibrium
73. In long run the monopolist can earn abnormal profit because of
Correct : A. blocked entry
74. Price discrimination under monopoly is of
Correct : C. three
75. The market in which there is a single seller is called
Correct : C. monopoly
76. Monopsony refers to
Correct : C. single buyer
77. Discriminating monopoly is possible if two markets have
Correct : A. differing elasticity of demand
78. Monopolist can fix
Correct : C. either price and output
79. A discrimination monopolist charges in a market
Correct : A. lower prices if it has lower elasticity
80. A firm practicing price discrimination will be
Correct : D. charging different prices in different markets
81. The best level of output for the monopolist is
Correct : C. tr and tc are parallel
82. 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
83. Under pure monopoly, there will be
Correct : A. no distinction between firm and industry
84. Monopolist will not produce that portion of demand curve where the
elasticity of demand
Correct : B. less than unity
85. Under monopoly, the equilibrium price is
Correct : C. more than mc
86. The cross elasticity of demand for the monopolist product is
Correct : A. very low
87. Which of the following is known as the perfect price discrimination
Correct : A. first degree price discrimination
88. A monopolist usually earns
Correct : A. economic profit
89. Price discrimination is possible
Correct : B. only under monopoly
90. Who introduced various types of price discrimination
Correct : C. a c pigou
91. Oligopoly is a market situation characterized by
Correct : D. a few sellers
92. ‘Indeterminateness of demand curve’ is a feature of
Correct : D. oligopoly
93. Selling cost is maximum in the case of
Correct : B. oligopoly
94. The concept of ‘Kinked demand curve’ is related to
Correct : D. oligopoly
95. The concept of ‘Kinked demand curve’ was developed by
Correct : C. p m sweezy
96. ‘Group behavior’ is a feature of
Correct : B. oligopoly
97. Advertising can become ‘a life and death matter’ in