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Quiz 12
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Q.1
In case of inferior goods, the income elasticity is
Zero
Positive
Negative
None
Q.2
Lesser production of ____ would lead to lesser production in future.
Public goods
Consumer goods
Capital goods
Agricultural goods
Q.3
In perfect competition, the firm's _____ above AVC has the identical shape of the firm's supply curve
Marginal revenue curve
Marginal cost curve
Average cost curve
None of the above
Q.4
Under which market structure, average revenue of a firm is equal to its marginal revenue
Oligopoly
Monopoly
Perfect competition
Monopolistic competition
Q.5
In economics, what a consumer is ready to pay minus what he actually pays, is termed as
Consumer's equilibrium
Consumer's surplus
Consumer's expenditure
None of the above
Q.6
Agricultural goods market depicts characteristics close to
Perfect competition
Oligopoly
Monopoly
Monopolistic competition
Q.7
For ____ goods, increase in income leads to increase in demand.
Abnormal
Normal
Inferior
Superior
Q.8
In the case of a Giffen good, the demand curve will be
Horizontal
Downward to the right
Upward to the right
Vertical
Q.9
The law of consumer surplus is based on
Indifference curve analysis
Revealed preference theory
Law of substitution
The law of diminishing marginal utility
Q.10
If a firm's average variable cost curve is rising, its marginal cost curve must be
Constant
Above the total cost curve
Above the average variable cost curve
All of the above
Q.11
When a market is in equilibrium
No shortage exists
Quantity demanded equals quantity supplied
A price is established that clears the market
All of the above are correct
Q.12
If all inputs are trebled and the resultant output is doubled, this is a case of
Constant returns to scale
Increasing returns to scale
Diminishing returns to scale
Negative returns to scale
Q.13
If two goods are complements, this means that a rise in the price of one commodity will induce
An upward shift in demand for the other commodity
A rise in the price of the other commodity
A downward shift in demand for the other commodity
No shift in the demand for the other commodity
Q.14
In the short run if a perfectly competitive firm finds itself operating at a loss, it will
Reduce the size of its plant to lower fixed costs
Raise the price of its product
Shut down
Continue to operate as long as it covers its variable cost
Q.15
The producer is in equilibrium at a point where the cost line is
Above the isoquant
Below the isoquant
Cutting the isoquant
Tangent to isoquant
Q.16
The cost that a firm incurs in hiring or purchasing any factor of production is referred to as
Explicit cost
Implicit cost
Variable cost
Fixed cost
Q.17
The shape of rectangular hyperbola is made by
MC
AFC
AVC
None of the above
Q.18
Unemployment of labour means that
A worker does not get full time job
A worker is not happy with his present job
A person does not get job according to his qualification
a' and 'c' both
Q.19
Profit is maximum when
Slope of MC and Mr is the same
Slope of TC and TR is the same
Slope of AC and AR is the same
None of the above
Q.20
A market structure in which many firms sell products that are similar but not identical is known as
Monopolistic competition
Monopoly
Perfect competition
Oligopoly
Q.21
Economics is the study of
how society manages its unlimited resources
how to reduce our wants until we are satisfied
how society manages its scarce resources
how to fully satisfy our unlimited wants
Q.22
A competitive firm maximizes profit at the output level where
Price equals marginal cost
The slope of the firm's profit function is equal to zero
Marginal revenue equals marginal cost
All of the above
Q.23
A necessity is defined as a good having
A positive income elasticity of demand
A negative income elasticity of demand
An income elasticity of demand between zero and 1
An income elasticity of more than 1
Q.24
In the long run, any firm will eventually leave the industry if
Price does not at least cover average total cost
Price does not equal marginal cost
Economies of sale are being reaped
Price is greater than long run average cost
Q.25
Supply of a commodity is a
Stock concept
Flow concept
Both stock and flow concept
None of the above
Q.26
If two goods were perfect substitutes of each other, it necessarily follows that
An indifference curve relating the two goods will be curvilinear
An indifference curve relating the two goods will be linear
An indifference curve relating the two goods will be divided into two segments which meet at a right angle
An indifference curve relating the two goods will be convex to the origin
Q.27
The MC curve cuts the AVC and ATC curves at
The falling part of each
Different points
Their respective minimas
The rising part of each
Q.28
The human effort applied to the production of goods is called in economics
Labour
Skill
Experience
Service
Q.29
Normal profit is
Part of total cost
Part of economic profit
Total revenue minus total cost
Total revenue minus implicit cost
Q.30
As output increases
MC curve initially falls and then rises
MC initially rises and then falls
MC continuously rises
None of the above
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