Question # 1

Firms equilibrium is at that point where

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MC=AR

MC=MR

MC=AVC

MC=AC

Law of diminishing return is more applicable in:

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Trade sector

Industrial sector

Agricultural sector

Education sector

Law of increasing return is also known as:

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

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

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

Under monopoly, in the long run a firm

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Earns normal profit

Earns abnormal profit

Bears minimum loss

Bears abnormal loss

A monopolist controls the supply

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Totally

Partially

More

Not at all

Under perfect competition in the long run a firm

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Always earns abnormal profit

Always earns normal profit

Usually earns abnormal profit

Usually faces loss

Tendency of average revenue curve under monopoly is alwaus

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Falls down

Parallel to x-axis

Rises up

Parallel to y-axis

If variable costs of a firm are covered partly under perfect competition, then that firm

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Will run with normal profit

Will run with abnormal profit

Will run with minimum loss

Will not continue its business and close down

If the most part of total supply of commodity is produced by one firm, it is called

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Oligopoly

Monopoly

Perfect competition

Monopolistic competition

One condition which is not included in perfect competition conditions

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Homogeneity of product

Difference in price

Large number of buyers and sellers

Perfect knowledge of the market

When total production is maximum, marginal product is:

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Positive

Negative

Zero

Infinite

When total production increases, marginal product is:

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Positive

Negative

Zero

Infinite

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

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

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