Practice Test

Q1) What is the equilibrium market price ? Price (Rs.) : 1 , Demand (tonnes per annum) ; 1,000 , Supply (tonnes per annum) : 400 ; Price (Rs.) : 2 , Demand (tonnes per annum) ; 900 , Supply (tonnes per annum) : 500 ; Price (Rs.) :3 , Demand (tonnes per annum) ; 800 , Supply (tonnes per annum) : 6000 ; Price (Rs.) : 4 , Demand (tonnes per annum) ; 700 , Supply (tonnes per annum) : 700 ; Price (Rs.) : 5 , Demand (tonnes per annum) ; 600 , Supply (tonnes per annum) : 800 ; Price (Rs.) : 6, Demand (tonnes per annum) ; 500 , Supply (tonnes per annum) : 900 ; Price (Rs.) : 7 , Demand (tonnes per annum) ; 400 , Supply (tonnes per annum) : 1,000 ; Price (Rs.) : 8 , Demand (tonnes per annum) ; 900 , Supply (tonnes per annum) : 1,100 ; Show Answer

Q2) A market must have commodity buyers & sellers .What else should a market have ? Show Answer

Q3) A commodity which is bulky & cheap will have Show Answer

Q4) Price is the value of a good in the terms of Show Answer

Q5) A large number of buyers & sellers is a feature of Show Answer

Q6) The demand curve is undefined under which market structure ? Show Answer

Q7) The firm is a price maker in which market structure ? Show Answer

Q8) Demand curve is elastic under which market form ? Show Answer

Q9) Few sellers is a feature Show Answer

Q10) Entry-exit is free under which market structure ? Show Answer

Q11) The demand curve is also called Show Answer

Q12) When demand is elastic MR is Show Answer

Q13) When demand is inelastic MR is Show Answer

Q14) A rational producer will always operate on which portion of demand curve ? Show Answer

Q15) In economics,a state of balance is called Show Answer

Q16) Equilibrium price is also called Show Answer

Q17) A firm should produce where MR = MC and Show Answer

Q18) In oligopoly ,the demand curve is undefined because of Show Answer

Q19) What is that point called when P = AC ? Show Answer

Q20) What is that market called when the goods sells at the same price in all parts of the markets Show Answer

Q21) Total revenue is a straight positively sloping line from origin under Show Answer

Q22) TR minus total explicit cost is called Show Answer

Q23) Under perfect competition ,slope of Mr is Show Answer

Q24) Under perfect competition ,when price line passes through minimum point of AVC curve ,it is called Show Answer

Q25) Under perfect competition ,at the shut down point ,revenue earned by the firm covers which cost ? Show Answer

Q26) Under perfect competition losses incurred by the firm at the shut down point are equal to which cost ? Show Answer

Q27) Under perfect competition ,at minimizing losses point ,firm incurred losses but it continues to produce because the price covers Show Answer

Q28) Under perfect competition the firm will be earning normal profit in the long -run because of which condition ? Show Answer

Q29) Under perfect competition long -run equilibrium of the industry occurs at Show Answer

Q30) One important condition for successful price discrimination about elasticity of demand is Show Answer

Q31) One important condition for successful price discrimination about market structure is Show Answer

Q32) Under monopoly , in the long -run what will the firm earn ? Show Answer

Q33) Under monopolistic competition , in the long -run compare the profit maximizing output with the least cost output Show Answer

Q34) The different between least cost output & profit maximizing output is called Show Answer

Q35) What is the formula for calculating loss per unit Show Answer

Q36) Behavioural assumption of sweezy's kinked demand curve model is Show Answer

Q37) In the kinked -demand curve model the upper portion of the demand curve is Show Answer

Q38) In the kinked -demand curve model the lower portion of the demand curve is Show Answer

Q39) The kink occur at Show Answer

Q40) Under oligopoly the kinked demand curve model explains Show Answer

Q41) Firms aim at maximum of which profit ? Show Answer

Q42) Under perfect competition ,when price equals AR which is further equal to Show Answer

Q43) Under perfect competition ,information is Show Answer

Q44) In a monopoly , what happens to entry / exit in long-run ? Show Answer

Q45) In the short -run a monopolistic firm can incur losses if Show Answer

Q46) Sweezy's model does not explain Show Answer

Q47) Which is that market structure in which P = MC in equilibrium ? Show Answer

Q48) Assume that when price is Rs.20,quantity demanded is 9 units , & when price is Rs. 19 , quantity demanded is 10 units .Based on this information ,what is the marginal revenue resulting from an increase in output from 9 units to 10 units Show Answer

Q49) Assume that when price is Rs.20,quantity demanded is 15 units , & when price is Rs. 18 , quantity demanded is 16 units .Based on this information ,what is the marginal revenue resulting from an increase in output from 15 units to 16 units Show Answer

Q50) Suppose a firm is producing a level of output such that MR>MC.What should the firm do to maximize its profits Show Answer

Q51) Marginal revenue is equal to : Show Answer

Q52) Suppose that a sole proprietorship is earning total revenues of Rs.1,00,000 & is incurring explicit costs of Rs.75,000.If the owner could work for another company for Rs.30,000 a year ,we would conclude that : Show Answer

Q53) Which of the following is not an essential condition of pure competition Show Answer

Q54) Which is the shape of demand curve faced by a firm under perfect competition Show Answer

Q55) Which is the first order condition for the profit of a firm to be maximum ? Show Answer

Q56) Which of the following is not a characteristic of a 'price taker' ? Show Answer

Q57) Which of the following is false ? Show Answer

Q58) With a given supply curve, a decrease in demand causes Show Answer

Q59) It is assumed in economic theory that Show Answer

Q60) Assume that consumers' incomes & the number of sellers in the market for good A both decrease.Based upon this information we can conclude ,with certainty , that equilibrium Show Answer

Q61) Suppose that the supply of camera increases due to an increase in foreign imports.Which of the following will most likely occur ? Show Answer

Q62) Assume that in the market for good Z there is a simultaneous increase in demand & the quantity supplied .The result will be Show Answer

Q63) Suppose the technology for producing personal computers improves & , at the same time , individual discover new uses for personal computers so that there is greater utilisation of personal computers.Which of the following will happen to equilibrium price & equilibrium quantity ? Show Answer

Q64) Which of the following is not a condition of perfect competition Show Answer

Q65) Which of the following is not a characteristics of a perfectly competitive market ? Show Answer

Q66) Which of the following is not a characteristics of monopolistic competition ? Show Answer

Q67) All of the following are characteristic's of a monopoly except Show Answer

Q68) Oligopolistic industries are characterized by Show Answer

Q69) Price-taking firms,i.e.firms that operate in a perfectly competitive market, are said to be 'small' relative to the market .Which of the following best describes this smallness ? Show Answer

Q70) For the price -taking firm : Show Answer

Q71) Monopolistic competition differs from perfect competition primarily because Show Answer

Q72) The long-run equilibrium outcomes in monopolistic competition & perfect competition are similar , because in both market structures Show Answer

Q73) A monopolist is able to maximize his profits when Show Answer

Q74) In which form of the market structure is the degree of control over the price of its product by a firm very large ? Show Answer

Q75) Which is the other name that is given to the average revenue curve Show Answer

Q76) Under which of the following forms of market structure does a firm have no control over the price of its product Show Answer

Q77) Discriminating monopoly implies that the monopolist charges different prices for his commodity Show Answer

Q78) Price discrimination will be profitable only if the elasticity of demand in different market in which the total market has been divided is Show Answer

Q79) The kinked demand hypothesis is designed to explain in the context of oligopoly Show Answer

Q80) The firm in a perfectly competitive market is a price taker .This designation as a price taker is based on the assumption that Show Answer

Q81) Suppose that the demand curve for the XYZ company slopes downward & to the right .We can conclude that Show Answer

Q82) If the firms is in the industry have the following market shares, which market structure would best describe the industry ? Market share : Toothpaste :-18.7% , Dentipaste ;-14.3% , Shinibright;-11.6% , I can't believe its not toothpaste ;-9.4% , Brighter than white ;-8.8% ,Pasty stuff ;-7.4% ,Others ;-29.8% , Show Answer

Q83) The kinked demand curve model of oligopoly assumes that Show Answer

Q84) A firm encounters its 'shutdown point' when : Show Answer

Q85) Suppose that ,at the profit-maximising level of output, a firm finds that market price is less than average total cost ,but greater than average variable cost.Which of the following statements is correct ? Show Answer

Q86) When prices is less than average variable cost at the profit-maximising level of output,a firm should be : Show Answer

Q87) A purely competitive firm's supply schedule in the short run is determined by Show Answer

Q88) One characteristics not typical of oligopolistic industry is Show Answer

Q89) The structure of toothpaste industry in India is best described as Show Answer

Q90) The structure of cold drink industry in India is best described as Show Answer

Q91) Which of the following is incorrect ? Show Answer

Q92) In perfect competition in the long run there will be no Show Answer

Q93) When ___,we know that the firms are earning just normal profits Show Answer

Q94) When ___,we know that the firms must be producing at a minimum point of the average cost curve & so there will be productive efficiency Show Answer

Q95) When_____there will be allocative efficiency meaning thereby that cost of the last unit is exactly equal to the price consumers are willing to pay for it & so that the right goods are being sold to the right people at the right price Show Answer

Q96) Agricultural goods markets depict characteristics close to Show Answer