Micro Economics analysis MCQs : This section focuses on the "Micro Economics analysis". These Multiple Choice Questions (MCQs) should be practiced to improve the Micro Economics analysis skills required for various interviews (campus interview, walk-in interview, company interview), placement, entrance exam and other competitive examinations.
Question 1
Which of the following industry is most closely approximates theperfectly competitive model.
A. automobiles
B. cigarette
C. newspaper
D. wheat farming
Question 2
Which of the following is not a feature of a perfectly competitivemarket
A. large number of buyers and sellers
B. homogeneous product
C. group behaviour
D. perfect competition
Question 3
Total profit is maximum when
A. total revenue is equal to total cost
B. total revenue is greater than total cost
C. the positive difference between total revenue and total costs is largest.
D. all of the above
Question 4
The condition of equilibrium of the industry under perfectcompetition is
A. mc = mr
B. mc = ac
C. mc = mr = ar
D. mc = ac = ar
Question 5
In the short-run, a competitive firm can earn
A. normal profit
B. super normal profit
C. loss
D. either a or b or c depending upon the level of average cost.
Question 6
In the market period, price determination in the case of aperishable commodity is influenced by its
A. demand
B. supply
C. demand as well as the supply
D. none of the above
Question 7
Zero economic profit arises in the long run in the case of
A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Question 8
Zero economic profit includes
A. zero normal profit
B. normal profit
C. super normal profit
D. average profit
Question 9
Economic efficiency is achieved in the long run in the case of
A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Question 10
Consumer surplus will be maximum in the case of
A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Question 11
The short-run supply curve of a perfectly competitive firm is given by
A. rising portion of the mc curve over and above the shut-down point
B. rising portion of the mc curve over and above the break-even point
C. rising portion of the mc curve over and above the ac curve
D. rising portion of the mc curve
Question 12
Free entry into monopolistically competitive market ensures that allfirms will produce at the lowest point of LAC
A. always
B. sometimes
C. never
D. cannot say
Question 13
Under monopolistic competition, the demand curve of the product of an individual firm depends on the nature and prices of closesubstitutes
A. TRUE
B. FALSE
C. not always
D. depends on the nature of the product
Question 14
If the monopolist faces identical demand for his commodity in thetwo separate markets, by practicing third degree price discrimination
A. will increase his tr and total profit
B. can increase his tr and profit
C. cannot increase his tr and profit
D. will charge different prices in different market
Question 15
‘Indeterminateness of demand curve’ is a feature of
A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Question 16
Selling cost is maximum in the case of
A. monopoly
B. oligopoly
C. perfect competition
D. monopolistic competition
Question 17
The concept of ‘Kinked demand curve’ is related to
A. monopoly
B. monopolistic competition
C. perfect competition
D. oligopoly
Question 18
The concept of ‘Kinked demand curve’ was developed by
A. alfred marshal
B. j r hicks
C. p m sweezy
D. a.k sen
Question 19
‘Group behavior’ is a feature of
A. monopoly
B. oligopoly
C. perfect competition
D. monopolistic competition
Question 20
Advertising can become ‘a life and death matter’ in
A. perfect competition
B. monopoly
C. monopolistic competition
D. oligopoly
Question 21
Classical oligopoly models are related to
A. collusive oligopoly
B. non-collusive oligopoly
C. price leadership model
D. none of the above
Question 22
‘Cartels’ are example for
A. collusive oligopoly
B. non-collusive oligopoly
C. monopsony
D. none of the above
Question 23
Assertion (A) Many oligopolistic industries exhibit an appreciable degree of Price rigidity or stabilityReason (R) Oligopolists face a demand curve that is highly elasticfor price increases and less elastic for price reductions
A. (a) is true but (r) is false.
B. both (a) and (r) are false
C. both (a) and (r) are true and (r) is the correct explanation of (a)
D. both (a) and (r) are true but (r) is not the correct explanation of(a)
Question 24
Match the followingA B (i). Demand for inputs Hall and Hitch (ii). Oligopoly Single buyer (iii). Kinked demand theory Cartels (iv). Monopsony Derived demand Codes;
A. (i) (ii) (iii) (iv)
B. (i) (iii) (ii) (iv)
C. (iv) (iii) (ii) (i)
D. (iv) (iii) (i) (ii)
Question 25
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
A. 0.5
B. 2
C. 5
D. 10
Question 26
The demand curve for labour under perfectly competitive marketis
A. downward sloping
B. horizontal straight line
C. upward sloping
D. none of the above
Question 27
The supply curve of the input that a firm faces under a perfectlycompetitive market is
A. downward sloping
B. horizontal supply curve
C. upward sloping
D. none of the above
Question 28
The supply curve of an input that a firm faces under animperfectly competitive market is
A. downward sloping
B. horizontal supply curve
C. upward sloping
D. none of the above
Question 29
Let labour is the only variable input, a monopsonist maximizeshis or her profit when
A. mpl = mel
B. mpl < mpl
C. mpl > mpl
D. none of the above
Question 30
A profit maximizing firm under a perfectly competitive marketemploys more and more variable input labour until
A. mrpl < mel = w
B. mrpl > mel = w
C. mrpl = mel = w
D. none of the above
Question 31
To minimize cost of production at any level of output themonopsonist should continue to substitute labour and capital until
A. mel . mpl = mek . mpk
B. mel / mpl = mek / mpk
C. mel . mpl > mek . mpk
D. mel / mpl > mek / mpk
Question 32
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
A. always
B. never
C. some times
D. often
Question 33
The first chartered bank was established at_______________
A. japan
B. philadelphia
C. india
D. france.
Question 34
The first chartered bank was established in the year _____________
A. 1781
B. 1775
C. 1870
D. 1881
Question 35
Bank is an institution which deals with ___________
A. money
B. treatment
C. education
D. communication.
Question 36
The word meaning of Banco is ___________
A. heap
B. gold
C. deposit
D. loan.
Question 37
Bank of Hindustan was established at _________________
A. bombay
B. chennai
C. kolkatta
D. bengal.
Question 38
General Bank of India was established in ______________
A. 1771
B. 1775
C. 1786
D. 1780
Question 39
The central office of RBI is at _____________________
A. mumbai
B. chennai
C. new delhi
D. calcutta.
Question 40
Central bank was nationalised in: [a]1949 [b] 1934 [c] 1935 [d] 1940.20. RBI was established in the year_________________
A. 1935
B. 1949
C. 1934
D. 1940
Question 41
Money market is a market for_____________fund
A. short term fund
B. long term fund
C. secular fund
D. mid term fund.