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Quiz 6
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Q.1
It describes the law of supply
Supply curve
Supply schedule
Supply equation
All of the above
Q.2
Marginal revenue is always less than price at all levels of output in
Perfect competition
Monopoly
Both 'a' and 'b'
None of the above
Q.3
What does price elasticity of demand measure?
Change in price caused by changes in demand
The rate of change of sales
The responsiveness of demand to price changes
The value of sales at a given price
Q.4
The elasticity of substitution between two perfect substitutions is
Zero
Greater than zero
Less than infinity
Infinity
Q.5
Discriminating monopoly implies that the monopolist charges different prices for its commodity
From different groups of consumers
For different uses
At different places
Any of the above
Q.6
The situation of monopolistic competition is created by
Small number of producers of a commodity
Lack of homogeneity of the product produced by different firms
Imperfection of the market for that product
All of the above
Q.7
The major difference between perfect competition and monopolistic competition is
Number of firms
Differentiated product
Rate of profit
Free exit and entry
Q.8
If price and total revenue move in the same direction, then demand is
Inelastic
Elastic
Unrelated
Perfectly elastic
Q.9
When price elasticity of demand for normal goods is calculated, the value is always
Positive
Negative
Constant
Greater than 1
Q.10
If the demand for a commodity is inelastic, an increase in its pice will cause the total expenditure of the consumers of the commodity to
Remain the same
Increase
Decrease
Any of the above
Q.11
In which form of the market structure is the degree of control over the price of its product by a firm very large?
Monopoly
Imperfect condition
Oligopoly
Perfect competition
Q.12
A firm under perfect competition is
Price maker
Price breaker
Price taker
Price shaker
Q.13
If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be
Horizontal
Vertical
Positively sloped
Negatively sloped
Q.14
Which of the following is NOT a characteristic of perfect competition?
Free entry and exit of the firms
The demand curve of firm is horizontal
The marginal revenue curve is horizontal
An individual firm can influence the price
Q.15
When marginal revenue is zero, total revenue is
Maximum
Minimum
Zero
Decreasing
Q.16
Which one is not a assumption of the theory of demand based on analysis of indifference curves?
Given scale of preferences as between different combinations of two goods
Diminishing marginal rate of substitution
Constant marginal utility of money
Consumers would always prefer more of a particular good to less of it, other things remaining the same
Q.17
Price discrimination will be profitable only if the elasticity of demand in different markets into which the total market has been divided is
Uniform
Different
Less
Zero
Q.18
Which one of the following is the condition of equilibrium for the monopolist?
MR=MC
MC=AR
MR=MC=Price
AC=AR
Q.19
In case of monopoly
Marginal revenue curve always slopes upward
Total revenue curve always slopes upward
Marginal revenue is always equal to average revenue
Marginal revenue is always less than average revenue
Q.20
The elasticity of demand of durable goods is
Less than unity
Greater than unity
Equal to unity
Zero
Q.21
In the case of an inferior good, the income elasticity of demand is
Positive
Zero
Negative
Infinite
Q.22
In case of perfect competition in the market
Marginal revenue curve always slopes upward
Marginal revenue curve always slopes downwards
Marginal revenue is always equal to average revenue
Marginal revenue is always less than average revenue
Q.23
Which of the following markets comes closest to perfect market?
Wheat market
Cigarette market
Cold drinks market
Stock market
Q.24
Mr. Raees Ahamd bought 50 litres of petrol when his monthly income was Rs.25000. Now his monthly income has risen to Rs.50,000 and he purchases 100 litres of petrol. His income elasticity of demand for petrol is
1
100%
Less than 1
More than 1
Q.25
Income elasticity of demand for normal goods is always
1
Negative
More than 1
Positive
Q.26
Which is the other name that is given to the average revenue curve?
Profit curve
Demand curve
Average cost curve
Indifference curve
Q.27
Demand is a function of
Price
Quantity
Supply
None of the above
Q.28
The budget line is also known as the
Iso-utility curve
Production possibility line
Isoquant
Consumption possibility line
Q.29
In the case of a straight-line demand curve meeting the two axes, the price-elasticity of demand at the mid-point of the line would be
0
1
1.5
2
Q.30
Which is the first-order condition for the profit of a firm to be maximum?
AC=MR
MC=MR
MR=AR
AC=AR
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