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Quiz 11
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Q.1
When total utility becomes maximum, then marginal utility will be
Minimum
Average
Zero
Negative
Q.2
Demand curve can be derived from
MU curve
PCC
Both 'a' and 'b'
None
Q.3
In a typical demand schedule, quantity demanded
Varies directly with price
Varies proportionately with price
Varies inversely with price
Is independent of price
Q.4
The 'Diamond water' controversy is explained by
Total utility
Marginal utility
Price offered
Quantity supplied
Q.5
Which statement relates to macroeconomics?
Oil prices are rising in Pakistan
Profit rate is high on textile industry
The firms try to make huge profits
The government has failed to control inflation
Q.6
The exception to law of demand is
Veblen goods
Giffen goods
Both 'a' and 'b'
None
Q.7
The upper portion of the kinked demand curve is relatively
More inelastic
More elastic
Less elastic
Inelastic
Q.8
Price discrimination is not possible in case of
Perfect competition
Monopoly
Monopolistic competition
Oligopoly
Q.9
A firm's average total cost of production is Rs.300 at 5 units of output and Rs.320 at 6 units of output. The marginal cost of producing the 6th unit is
Rs.20
Rs.120
Rs.320
Rs.420
Q.10
The various combination of goods that can be produced in any economy when it uses its available resources and technology efficiency are depicted by
Demand curve
Production curve
Supply curve
Production possibility curve
Q.11
Rational decision making requires that
One's choices be arrived at logically and without errors
One's choices be consistent with one's goals
One's choices never vary
One makes choices that do not involve trade offs
Q.12
Which of the following are sources of growth?
Natural resources
Human capital
Physical capital
All of the above
Q.13
The IC curve approach assumes
Rationality
Consistency
Transitivity
All of the above
Q.14
A higher indifference curve shows
A higher level of satisfaction
A higher level of production
A higher level of income
None of the above
Q.15
In the case of two perfect substitutes, the indifference curve will be
Straight line
L-shaped
U-shaped
C-shaped
Q.16
If the price of 'X' rises by 10 percent and the quantity demanded falls by 10 percent, 'X' has
Inelastic demand
Unitarily elastic demand
Zero elastic demand
Elastic demand
Q.17
Demand for intermediate consumption arises in
Household sector only
Government sector only
Corporate sector only
All producing sectors of the economy
Q.18
Suppose the total cost of producing commodity X is Rs.125000. Out of this cost, implicit cost is Rs.35000 and normal profit is Rs.25000. What will be the explicit cost of commodity X?
Rs.90000
Rs.65000
Rs.60000
Rs.100000
Q.19
When indifference curve is L shaped, then two goods will be
Perfect substitute goods
Substitute goods
Perfect complementary goods
Complementary goods
Q.20
A firm's average fixed cost is Rs.20 at 6 units of output. What will it be at 4 units of output?
Rs.60
Rs.30
Rs.40
Rs.20
Q.21
If the price of good A increases relative to the price of substitutes B and C, the demand for
B will increase
C will increase
Both B and C will increase
B and C will decrease
Q.22
If income elasticity for a good is 2, then it is a
Necessity item
Inferior good
Luxury item
Comfortable item
Q.23
If the income elasticity is greater than one, the commodity is
Necessity item
Luxury item
Inferior good
None
Q.24
If the demand for a good is inelastic, an increase in the price of the good will cause the total expenditure of the consumers of the good to
Remain the same
Increase
Decrease
Any of the above
Q.25
All of the following are determinants of demand except
Tastes and preferences
Quantity supplied
Income
Price of related goods
Q.26
When as a result of decrease in price of good, the total expenditure made on it decreases we say that price elasticity of demand is
Less than unity
Unity
Zero
Greater than Unity
Q.27
The structure of the cold drink industry in India is best described as
Perfectly competitive
Monopoly
Oligopoly
Monopolistically competitive
Q.28
The second glass of lemonade gives lesser satisfaction to a thirsty biy, this is a clear case of
Law of demand
Law of diminishing returns
Law of diminishing marginal utility
Law of supply
Q.29
The kinked demand curve model of oligopoly assumes that
Response to a price increase is less than the response to a price decrease
Response to a price increase is more than the response to a price decrease
Elassticity of demand is constant regardless of whether price increases or decreases
Elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases
Q.30
One characteristic not typical of oligopolistic industry is
Too much importance to non-price competition
Price leadership
Horizontal demand curve
A small number of firms in the industry
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