Economics mcqs for cseet part 2

1. When price decreases, quantity demanded increase it is known as

(a) Expansion of demand

(b) Contraction of demand

(c) Increase in demand

(d) Decrease in demand

2. Which of the following is not the exception to the law of demand?

(a) Giffen goods

(b) Level of income

(c) Future expectations

(d) Conspicuous necessities

3. When price elasticity is found between two points is known as :

(a) Arc elasticity

(b) Cross elasticity

(c) Point elasticity

(d) None of the above

4. Luxury goods are price ................. while necessities are price ...........

(a) Inelastic, Elastic ,

(b) Elastic, Inelastic

(c) Inelastic, Unitary

(d) Unitary, Elastic

5. The elasticity of substitution between two perfect substitutes is _

(a) Greater than O

(b) Infinity

(c) Less than infinity

(d) Zero

6. Slope of a demand curve is determined by -

(a) its own price

(b) factors other than its own price

(c) any of these

(d) None of these.

7. Demand for car decreases due to increase in price. It implies that car and petrol ar ...........

(a) Normal goods

(b) Inferior goods

(c) Substitute goods

(d) Complementary goods

8. Effect of change in the price of a product on the consumer’s purchasing power is ...........

(a) Consumer surplus

(b) Income effect

(c) Substitute effect

(d) None of the above

9. In a free market economy, when consumers increase their purchases of a good and the level of ................. exceeds ................. , then prices tend to rise.

(a) Demand, supply

(b) Supply, demand

(c) Prices, demand

(d) Profits, supply

10. Total revenue falls as the price of a good increase if price elasticity of demand is

(a) Elastic

(b) Unitary elastic

(c) Inelastic

(d) Perfectly Elastic

11. What is the shape of the demand curve faced by a firm under perfect competition?

(a) Horizontal

(b) Vertical

(c) Positively sloped

(d) Negatively sloped

12. Which of the following is not a condition of perfect competition?

(a) A large number of firms

(b) Perfect mobility of factors

(c) Informative advertising to ensure that consumers have good information.

(d) Freedom of entry and exit into and out of the market.

13. Which is the other name that is given to the average revenue curve?

(a) Profit curve

(b) Demand curve

(c) Average cost curve

(d) Indifference curve

14. Under which of the following forms of market structure does a firm has no control over the price of its product?

(a) Monopoly

(b) Monopolistic competition

(c) Oligopoly

(d) Perfect competition

15. In perfect competition in the long run there will be no_ ................. .

(a) Normal profits

(b) Supernormal profit

(c) Production

(d) Costs

16. When the perfectly competitive firm and industry are in long run equilibrium then:

(a) P = MR = SAC = LAC

(b) D = MR = SMC = LMC

(c) P = MR = Lowest point on the LAC curve

(d) All the above

17. The perfectly competitive firm can sell its output at ................. prices.

(a) Variable

(b) Normal

(c) Fixed

(d) Normal or fixed

18. Supply of a product in ................. is relatively inelastic.

(a) Short period

(b) Long period

(c) Very short period

(d) None of the above

19. Many sellers offering differentiated products to many buyers is characterized as:

(a) Oligopoly

(b) Monopoly

(c) Monopolistic competition

(d) Perfect competition

20. ................. refers to the selling of specific commodity or service to

different buyer at two or more different prices.

(a) Price determination

(b) Price differentiation

(c) Product differentiation

(d) Price discrimination

21. In perfect competition since firm is the price taker which curve is straight line?

(a) Total revenue

(b) Marginal revenue

(c) Total cost

(d) Marginal cost

22. Product differentiation is the feature of ................. .

(a) Perfect competition

(b) Monopoly

(c) Oligopoly

(d) Monopolistic competition

23. Under ................. there will be no difference between firm and industry.

(a) Duopoly

(b) Bilateral monopoly

(c) Monopoly

(d) None of the above

24. Monopolist is a ................. .

(a) Price taker

(b) Price dictator

(c) Price maker

(d) Price motivator

25. In the long run, monopolist firm earn ................. .

(a) Supernormal profit

(b) Loss

(c) Normal profit

(d) Any of these

1 (a) 2 (b) 3 (a) 4 (b) 5 (b)

6 (a) 7 (d) 8 (b) 9 (a) 10 (a) 11 (a)

12 (c) 13 (b) 14 (d) 15 (b) 16 (d) 17 (c)

18 (a) 19 (c) 20 (d) 21 (b) 22 (d) 23 (c)

24 (c) 25 (a)