1. Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stabilityReason (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)
2. Match the following
A B
(i). Demand for inputs Hall and Hitch
(ii). Oligopoly Single buyer
(iii). Kinked demand theory Cartels
(iv). Monopsony Derived demand Codes;
Correct : D. (iv) (iii) (i) (ii)
3. 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
Correct : B. 2
4. The equilibrium level of output for a perfectly competitive marketis
Correct : B. mc = mr
5. The term ‘monopsony’ refers to
Correct : B. a single buyer
6. The demand curve for labour under perfectly competitive market
is
Correct : A. downward sloping
7. The supply curve of the input that a firm faces under a perfectly
competitive market is
Correct : B. horizontal supply curve
8. The supply curve of an input that a firm faces under an
imperfectly competitive market is
Correct : C. upward sloping
9. Let labour is the only variable input, a monopsonist maximizes
his or her profit when
Correct : A. mpl = mel
10. A profit maximizing firm under a perfectly competitive market
employs more and more variable input labour until
Correct : C. mrpl = mel = w
11. To minimize cost of production at any level of output the
monopsonist should continue to substitute labour and capital until
Correct : B. mel / mpl = mek / mpk
12. In Chamberlin and Kinked demand curve model, the oligoposist
Correct : D. all of the above
13. 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
Correct : A. always
14. If an oligopolist incurs losses in the short run, then in the long
run
Correct : D. any of the above
15. Existence of large number of buyers and sellers and
homogenous product is a feature of :
Correct : C. perfect competition
16. Product differentiation is a characteristic of:
Correct : C. monopolistic competition
17. A firm under Perfect Competition is a:
Correct : B. price taker
18. Selling cost is a feature of :
Correct : C. monopolistic competition
19. Oligopoly is characterized by:
Correct : A. a few sellers
20. When there are only two sellers, the market is called as:
Correct : C. duopoly
21. Perfect competition is a market situation under which a
commodity is sold at:
Correct : A. uniform price
22. The demand curve of a firm under perfect competition is :
Correct : C. infinitely elastic
23. The price of a commodity under the perfect competition is
determined by:
Correct : D. market forces
24. Equilibrium literally means:
Correct : A. balance
25. The price at which the demand and supply are equal is called:
Correct : C. equilibrium price
26. Cost of advertisement and salesmanship is called: