Competitive Exams: Economics MCQs (Practice-Test 58 of 122)

  1. Which of the following statements is not correct?

    1. the short-run supply curve of the firm is that portion of its marginal cost curve which lies above its average variable cost curve.

    2. The short-run supply curve of the firm is that portion of its marginal cost curve which lies above its average cost curve.

    3. The short-run supply curve of the industry cannot be downward sloping

    4. the short-run supply curve of the industry can shift upward or downward.

  2. Ridge line refers to the locus of points of

    1. Isoquants where marginal product of one of the factors is zero

    2. isoquants where marginal product of two factors is zero

    3. Isoquants where marginal product of two factors is infinity.

    4. Isquants where marginal product of two factors is one

  3. If for a particular combination of labour and capital, the marginal productivity of capital is 4 units of output and the marginal rate of technical substitution is 2 units of capital per unit of labour, then the marginal productivity if labour will be

    1. 1

    2. 4

    3. 6

    4. 8

  4. In which one of the following market situations, are the firms mutually interdependent in pricing output decisions?

    1. Perfect competition

    2. Monopolistic competition

    3. Monopsony

    4. Obligopoly

  5. A queue of a large number of farmers before a single cold storage in the area is a case of

    1. Monopoly

    2. Obligopoly

    3. Monopsony

    4. Monopolistic competition.

  6. In price discrimination under discriminating monopoly given that the elasticity of demand in market I is 5 and in market II is 2.5 measured in absolute terms, how is the price in the two markets related to each other?

    1. Price in the market I is ⅔ of the price in market II

    2. Price in the market I is of the price in market II

    3. Price in the market I is of the price in market II

    4. Price in the market I sis equal to the price in market II

  7. Which one of the following is not correct about a perfectly competitive market?

    1. In the long run, the firm always earn only normal profit

    2. The firm could incur losses in the short run

    3. The individual fir is a price taker

    4. The demand curve being faced by a firm is unit elastic

  8. Fair-return-pricing in public utilities implies

    1. discriminatory pricing

    2. cost-plus pricing

    3. average cost pricing

    4. optimal output pricing

  9. Quasi-rent is

    1. equal to the total profits of the firm

    2. less than the total profits of the firm

    3. the excess of total revenue over total variable cost

    4. the excess of total revenue over total cost

  10. The time-preference theory of interest is mainly associated with:

    1. J. M. Keynes

    2. I. Fisher

    3. K. Wicksell

    4. M. Friedman

  11. Over a period of time, an existing series of index numbers tends to become obsolete and it fails to include new commodities gaining importance at a later date or to exclude the commodities losing significance in course of time. These problems can be overcome by

    1. Fisher's ideal index

    2. Fixed base index

    3. Chain index numbers

    4. Both fisher's ideal index and fixed base index

  12. The GNP of an economy at market prices is Rs. 10000 Ne factor income from abroad is Rs. 1000, indirect taxes Rs. 800, subsidies Rs. 500 and depreciation Rs. 1000. What is the GDP at market prices.

    1. Rs. 9000

    2. Rs. 7700

    3. Rs. 11000

    4. Rs. 13300

  13. In respect of the diagram given above, consider the following statements:

    1. Saving (S) is autonomous

    2. Investment (I) is autonomous.

    3. Saving is determined by income (Y)

    4. Investment (I) is not autonomous.

    Which of these statements are correct?

    1. 2 and 3

    2. 3 and 4

    3. 1 and 4

    4. 1 and 2

  14. Assume cosumpti9on function of an economy to be = Rs. 30 crore + 0.8 Y. Investment is Rs. 40 crore. The, the equilibrium level of income is

    1. Rs. 700 crore

    2. Rs. 350

    3. Rs. 560 crore

    4. Rs. 140 crore

  15. In monopolistic competition, why is optimum capacity not reached even though there are not abnormal profits in the industry at equilibrium?

    1. Because the demand curve of the monopolistic firm touches the long run average cost curve at its minimum point.

    2. Because the demand curve of the monopolistic firm touched the long run average cost curve when it is still falling

    3. Because the demand curve of the monopolistic firm touches the long run average cost curve at its rising portion

    4. Because the demand of the monopolistic firm touches the long run average cost curve at its maximum point