1. If the supply of a product remain same with the increase in price, the possible reasons can be
Correct : D. All the three
2. In a market economy equilibrium price is reached at
Correct : A. Point of interaction of aggregate demand and aggregate supply curve
3. Which of the following is/are an essential feature of the market
Correct : D. All the three
4. Which of these is not an essential feature of a market
Correct : D. Building with loading and unloading facilities
5. Which of the following is/are the characteristic of a monopolistically competitive market
Correct : D. All the three
6. If there is simultaneous fall in consumers disposal income as well number of suppliers of a product in the market, the
Correct : A. Equilibrium quantity will decrease
7. Very short period is the market condition where the supply remain perfectly
Correct : B. Inelastic
8. In the long run price is governed by ………….
Correct : A. Cost of Production
9. Adam Smith called price mechanism as
Correct : A. Invisible hands
10. In the long run a firm in perfect competition earns
Correct : A. Normal profit only
11. The practice of selling same product to different persons at different price is called
Correct : A. Price discrimination
12. Which of these is not a cause of price discrimination
Correct : D. Tax differentiation
13. If both the disposal income as well as number of suppliers of a product rises, the equilibrium
Correct : C. Quantity will go up
14. Simultaneous increase in demand and quantity supplied will
Correct : A. Increase in equilibrium price and quantity
15. A firm faces the shut down situation when
Correct : A. Price is less than average variable cost
16. If a firm shut down at a level when AVC > Price, the firm restricts its losses to
Correct : A. Total fixed cost
17. Fixed costs are
Correct : B. Sunk cost in the short run
18. When the price is less than the average variable cost, the firm should ………….
Correct : B. Shut down its operation for the time being
19. Breakeven point refers to the situation when
Correct : A. Total revenue is equal to total cost
20. A firm that break even after all the economic costs are paid in earning
Correct : C. Normal profit
21. A firm that makes profit in excess of normal profit is earning
Correct : D. Super normal profit
22. A natural monopoly has declining – over large range of output
Correct : A. Long run average cost
23. A monopoly based on sole state ownership of production and distribution network is known as
Correct : C. Government monopoly
24. The market state that satisfy all the essential features of a perfect competitive market except identity of product is known as
Correct : D. Monopolistic competition
25. …………….. may start a price war in order to grab a larger share of market
Correct : A. Oligopoly
26. In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes
Correct : A. Profits and new firms join the market
27. Which of these is associated with a monopolistic competitive market –
Correct : C. Normal in short run
28. The ideal level of operation for a pure monopoly firm is the level where
Correct : A. TR and STC curve are parallel to each other
29. When the Demand curve of a pure monopoly firm is elastic, MR will be
Correct : B. Positive
30. In short run a monopolistic competition firm will be in equilibrium where
Correct : D. MR curve intersect SMC from below and P is equal to or more than AVC
31. In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to
Correct : C. Banned entry of new firms
32. In the short run an oligopolistic firm will
Correct : D. Any of these three are possible
33. A monopoly firm makes more profit because
Correct : A. It has ability to choose among price and output combination
34. Super normal profits occurs when
Correct : A. Average revenue is more than average cost
35. …………… has excess production capacity in the long run
Correct : B. Monopolistic competition market
36. Oligopoly market is known for ……………..
Correct : B. Price rigidity
37. In a competitive market ………. is the price maker
Correct : B. Industry
38. In a competitive market ……………….. is the price taker
Correct : A. Firm
39. A Monopoly‟s demand curve is
Correct : A. Same as its average revenue curve
40. Which of them is a characteristic of a price taker
Correct : D. All the three
41. In question No. 348. What is the equilibrium quantity of demand and supply
Correct : B. 2600
42. Under perfect market conditions an Industry is said to be in equilibrium where
Correct : A. Total output is equal to total demand
43. Under perfect market conditions a firm is said to be in equilibrium where
Correct : B. Profit is the maximum
44. Under perfect market conditions the supply curve of a firm is represented by
Correct : A. MC curve
45. Long-term equilibrium of an Industry under a perfectly market conditions in achieved when
Correct : D. All the three
46. Which of the following statement is true
Correct : A. In perfect competition Average and Marginal revenue are identical
47. For a monopoly firm market demand curve is
Correct : B. Average Revenue curve itself
48. Which of the following statement is true
Correct : B. For a monopoly firm MR can be zero or even negative
49. For a monopoly firm the MR Curve
Correct : C. Lies half way between AR curve and the Y axis
50. A monopoly is characterized by
Correct : A. Limited entry and exit opportunity
51. Which of the following faces a downward sloping demand curve
Correct : B. Firm in a monopoly market
52. Average Revenue of a monopolist firm is
Correct : A. Always more than the Marginal revenue
53. Demand curve of an Oligopoly firm is characterized by
Correct : B. Kink at the price
54. Which of the following statement is true
Correct : A. Monopolist are price takers
55. What will happen if a firm in perfect competitive market, increase its output by 50%
Correct : A. Total sales revenue will also increase by 50% ; (b)
56. …………… it is the form of the market in which the only seller of a commodity has fully control over the prices
Correct : B. Pure monopoly
57. Stock of both man made goods as well as natural resources like capital is called –
Correct : B. National stock
58. ………….. is a situation in which it is not possible to make someone better off without making someone worse off
Correct : D. Pareto efficiency
59. …….. is the price at which demand for a commodity is equal to its supply
Correct : B. Equilibrium price
60. When a monopolist charges different prices to each customer it is called price discrimination of –
Correct : A. First order
61. The demand curve of a Monopoly firm is –
Correct : B. Same as that of the total market demand
62. In a perfect competitive market price determines –
Correct : C. Both
63. Total profit of a firm in a perfect competitive market is –
Correct : A. Total revenue less total cost
64. National income is the ……………. Of all the goods and services produced by a country during a period of year
Correct : B. Money value
65. GPD is the money value of final goods and serviced produced in the…………. Of a country during an accounting year
Correct : A. Domestic territory
66. Which of these is/ are included in the domestic territory of a country?
Correct : B. Ships and aircrafts operated by the residents of the country between two or more countries.
67. Choose the correct statement
Correct : A. GPD at fc = GPD mp-IT +S
68. Which of the following equation is correct?
Correct : A. GNP=GDP+Net factor income from abroad
69. Which of these items are excluded in the computation of National Income under value added method?
Correct : D. All the three
70. In agricultural sector net value added is estimated by
Correct : C. Production method
71. Which of these are not included in territory sector?
Correct : C. Agriculture
72. Which of these indicates increase in welfare of the people?
Correct : A. Increase in production of war time equipments
73. Which of the following is an example of an intermediate goods.
Correct : B. Steel and cement used to construct a flyover
74. GDP is defined as
Correct : A. The market value of all goods and services produced in the domestic economy during the year
75. If in 2000 nominal GDP is = `70000 Crore and the prices in 2000 were 40% more than the real GDP in 2000 using 1996 as a base year is
Correct : B. `50,000 Crore
76. Assuming consumption C= `45000, Investment I= `1000, Government Purchase G= `1200, Exports=`450, Depreciation = `600, and Indirect Tax= `500, then GDP will be
Correct : B. `6600
77. In question No. 386, the National Income will be
Correct : D. `5500
78. If the cost of production of a cake in bakery is `20 per cake which is ultimately sold to the customer after packing and transporting to the retail shops at `25 per cake. The value added is
Correct : A. `5
79. In a closed economy
Correct : A. GDP=GNP
80. In an open economy
Correct : D. All the three are possible
81. Which of these is an example of a transfer payment?
Correct : B. Retirement pension
82. GDP can be defined as sum of the market value of the………..
Correct : A. Final manufactured goods and services
83. A read garment factory pays `100 for suit length and `5 for cotton thread purchased and `50 to the
labour for stitching the suit which he sells in the market for `750. His contribution to GDP is
Correct : B. `750
84. Which of these would not be part of GDP?
Correct : D. All the three
85. Real GDP is measured in………….prices
Correct : A. Base year
86. Nominal GDP is measured in ………………..prices
Correct : B. Current year
87. Which of these is not a part of GDP for the year 2006?
Correct : D. A house built in 2000 and first sold in 2006
88. If GDP exceeds GNP the possible reasons could be
Correct : A. Foreigners are earning more in India than Indians are earning in foreign countries
89. ……………… is an index of price change for goods and services included in GDP
Correct : C. GDP deflator
90. From the following equation estimated consumption when disposal income is `1000 is C = `200+0.80Yd
Correct : A. `1000
91. The vital data of a country are given below: GNP at MP = `99,000, Net factor income abroad = (-) 560 Capital consumption allowance = `6,100, Net indirect tax = `8,470 From the above, estimate of GNP at factor cost =
Correct : A. `90,530
92. Based on the data given in question No. 401. NNP at factor cost
Correct : A. 84,430
93. Based on the data given in question No. 401.NDP at FC
Correct : C. 84990
94. Based on the data given in question No. 401.NDP at MP
Correct : B. 93460
95. Which of the following statement is true?
Correct : D. Value added = total sales + closing stock of finished goods and semi finished goods – opening stock of finished goods and semi finished goods – total expenditure on raw material – intermediate goods.
96. True value added
Correct : A. value added-depreciation
97. If Nominal GDP is 11% and Real GDP is 6%, then the difference of 5% represent
Correct : B. Rate of inflation
98. Given Real GDP of 6.5% and rate of inflation of 5.5% nominal GDP will be…….
Correct : A. 12%
99. Given Real GDP 8.25%, Nominal GDP 11.25%, Rate of inflation will be
Correct : B. 3%
100. If we add……………. to net domestic production we get GDP