Question # 1

Under monopoly, in the long run a firm

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Earns normal profit

Earns abnormal profit

Bears minimum loss

Bears abnormal loss

When total revenue and total cost of a firm are equal, the firm earns

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Abnormal profit

Normal profit

Normal loss

Abnormal loss

Usually elasticity of demand in equilibrium situation under monopoly is

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Equal than unity

Less than unity

more than unity

Zero

Law of constant return is also known as:

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

When a firm earns abnormal profit in the short run, then its

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MC=MR=AR=AC all are equal

MC=MR=AR while AC is less

MC=MR=AR while AC is more

MC=MR=AR while AV is sometimes equal to them and sometimes less than tham

Firms equilibrium is at that point where

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MC=AR

MC=MR

MC=AVC

MC=AC

If the equation is this, MC=MR=AR(P)<AC then the firm

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Earns normal profit

Earns abnormal profit

Bears loss

Bears abnormal loss

Speed of increase in total revenue remains equal with the increase in output

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Under monopoly

Under oligopoly

Under perfect competition

Under pure competition

When total production decreases, marginal product is:

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Positive

Negative

Zero

Infinite

Under monopoly, number of firms is

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Large

Few

One

Two

Law of increasing return is also known as:

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

According to neo classical approach, output is the function of:

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Labour

Capital

Organization

Both (a) and (b)

If there are large number of firms in some particular industry, then situation is called

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Perfect competition

Imperfect competition

Monopoly

Monopolistic competition

A firm earns normal profit

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When price of the commodity is equal to average cost

When price of the commodity is more than average cost

When price of the commodity is less than average cost

When total revenue is more than total costs

Monopolist firm in the long run

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Always faces loss

Usually faces loss

Usually earns normal profit

Always earns abnormal profit

A monopolist firm usually earns

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Normal profit

Abnormal profit

Minimum loss

Abnormal loss

Firm earns abnormal profit, when

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AC=AR

AR>AC

AR<AC

AC=MC

When total production is maximum, marginal product is:

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Positive

Negative

Zero

Infinite

The difference between total revenue (TR) and total cost (TC) is called

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Loss

Profit

Profit or loss

Utility

A monopolistic firm has control of

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Whole market supply by one firm

Whole market supply by two firms

Whole market supply by a few firms

None of these

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Principles of Economics Icom Part 1 English Medium Chapter 7 Online Test MCQs With Answers

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