PPSC Economics Topic 2 MCQS Test Preparation

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MCQ's Test For PPSC Economics Topic 2 Micro Economics

Try The MCQ's Test For PPSC Economics Topic 2 Micro Economics

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PPSC Economics Topic 2 Micro Economics

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Question # 1

the ouput where diminishing return to production begin is also the ouput where

Question # 2

In perfect competition a firm is.

Question # 3

For commodities, X and Y, the possibilities are X is preferred to Y , Y is preferred to X or X and Y are equally preferred, In indifference curve analysis, this is known as the.

Question # 4

In the short run if price falls the firm will respond by

Question # 5

If a monopolist's has only fixed costs and chooses that output at which marginal cost equals price. it will

Question # 6

Average fixed cost

Question # 7

To maximize revenue, an excise tax should be imposed on a product

Question # 8

The "Law of demand" most directly means that consumers buy

Question # 9

If an increase in the price of gasoline increases the demand for gas hybrid cars, then

Question # 10

The income effect of a price change

Question # 11

Allocative efficiency is achieved under which of the following market structures.

Question # 12

Last week, Martha spend one day cleaning a house for this she was paid $50 The rest of the week, she spend looking for a job Martha would be callsified as.

Question # 13

If a price floor of Rs.15 is imposed, the governments cost is.

Question # 14

If A is preferred to B and B is preferred to C and there is indifference between A and D

Question # 15

A normal good can be defined as one which consumers purchase more of as.

Question # 16

Disposable income is equal to.

Question # 17

If both supply and demand for a good increase at the same time which of the following must also increase

Question # 18

The demand for labor slopes down and to the right because of.

Question # 19

Which of the following statements abut the relationship between marginal cost and average cost is correct.

Question # 20

An increase in price causes an increase in total revenue when.

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Sr.# Question Answer
1 If the price of an apple increased from 50 to 60 the quantity demanded will decrease because of.
A. The substitution effect only
B. The income effect only
C. A change in income
D. The substitution and income effects.
2 Which of the following is a function of money
A. Medium of exchange
B. Store of value
C. Unit of accounting
D. All of the above
3 As long as the principle of diminishing marginal utility is operating any increased consumption of good.
A. Lowers total utility
B. Produces negative total utility
C. Lower marginal utility and therefore total utility
D. Lowers marginal utility, but may raise total utility.
4 When Daimler Benz maker of the Mercedes bought Chrysler the merger was
A. Horizontal
B. Vertical
C. Conglomerate
D. None of these
5 In capitalistic economy price is determined by
A. Supply and production
B. Demand and production
C. Demand and consumption
D. Demand and supply
6 The market demand for a product is found by
A. Horizontally summing the individual demand curves
B. Vertically summing the induvial demand curves
C. Both horizontally and vertically summing the individual demand curve.
D. None of the above
7 The firm under monopolistic competition is likely to produce less and set a higher price than under perfect competition because.
A. The firm faces decreasing returns to scale
B. The firm faces increasing costs
C. The firm must incur selling expenses including advertising.
D. The firm faces a downward sloping demand curve
8 In pure monopoly there is.
A. A lot of firms
B. Two firms
C. A single firm
D. Many firms
9 Extension and contraction of demand mean
A. Movement on the same demand curve
B. Movement to high demand curve
C. Movement to lower demand curve
D. Movement to another demand curve
10 A typical demand curve cannot be
A. Rising upwards to the right
B. A straight line
C. Concave to origin
D. Convex to origin
11 Holding all other things constant a higher price for ski lift tickets would.
A. Increase the number of skiers
B. Increase the price of skis
C. Decrease the number of skis sold
D. Decrease the demand for other winter recreational activities
12 Some goods are not closely related to each other and are neither substitutes nor complements for such goods the cross price elasticity of demand would be.
A. Positive
B. Negative
C. Zero
D. Cannot tell without more information
13 If a monopoly is unable to cover its short run variable costs, if should.
A. Shut down
B. Raise price
C. Lower price
D. Increase output
14 One of the difference between a perfectly competitive fir's long run equilibrium and the long run equilibrium of a monopolistically competitive firm is that
A. LMS = MR under perfect competition but not under monopolistic competition
B. SAC = LAC under perfect competition but not under monopolistic competition
C. SMC = LMC under perfect competition but not under monopolistic competition
D. LAC = LMC under perfect competition, but not under monopolistic competition
15 A monopsony is
A. The scale supplier of an input
B. The scale supplier of an output
C. The sole buyer of some type of input
D. A unionized industry
16 In order to practice price discrimination which of the following is needed.
A. Some degree of monopoly power
B. An ability to separate the market
C. An ability to prevent reselling
D. All of the above
17 Skills that embodied in a person are called.
A. Human capital
B. Embodied skills
C. Physical capital
D. Experience skills
18 A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.
A. Inferior goods
B. Substitutes
C. Complements
D. Normal goods
19 If X , Y, and Z are willing to work for Rs. 4, Rs, 5, and Rs.6 respectively but N pays them Rs. 7 each, producers surplus is.
A. Rs. 4
B. Rs.7
C. Rs.5
D. Rs.6
20 BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.
A. Buy an additional pair of shorts
B. Buy an additional pair of both items
C. Possibly not make any adjustment in her behavior
D. Sell her shorts and keep her shoes

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