PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 If marginal revenue equals marginal cost No profit is being made total revenue equals total cost Profits are maximized Producing another unit would increase profits
2 Total revenue equals Price Plus quantity Price multiplied by quantity sold Price divided by the quantity sold Price minus quantity sold
3 The profit per scale is a measure of. Profit Profitability Feasibility Realism
4 In the short term a firm will produce provided the revenue Covers fixed costs Covers variable costs Covers total costs Covers revenue
5 In the long term a firm will produce provident the revenue covers. Fixed costs Variable cost Total costs Revenue
6 If firm earn normal profits. They will aim to leave the industry Other firms will join the industry The revenue equals total costs No profit is made in accounting terms
7 If the price is less than the average cost but higher than the average variable costs. The firm is making a loss and will should own in the short term. The firm is making a profit. The firm is making a loss but will continue to produce in the short term The firm is making a loss and is making a negative contribution to fixed costs
8 If the marginal revenue is less than the marginal cost then to profit maximize a firm should. Reduce output Increase output Leave output where it is. Increase costs
9 If marginal product is below average product. The total product will fall The average product will fall Average variable costs will fall Total revenue will fall
10 If marginal cost is positive and falling. Total cost is falling Total cost is increasing at a falling rate Total cost is falling at a falling rate Total cost is increasing at an increasing rate.
11 The average variable cost curve. Is derived from the average fixed costs Converges with the average cost as output increases Equals revenue minum profits Equal the total costs divided by the output
12 The first level of output at which the long run average costs are minimized is called. The minimum Efficient Scale The minimum External scale The Maximum External scale The maximum Effective scale.
13 When internal economics of scale occur Total costs fall Marginal costs increase Average costs fall Revenue falls
14 The law of diminishing returns assumes. There are not fixed factors of production There are no variable factors of production Utility is maximized when marginal product falls. Some factors of production are fixed
15 Which of the following is true. If the marginal cost is greater than the average cost the average cost fallls. If the marginal cost is greater than the average cost the average cost increases. If the marginal cost is positive total costs are maximized If the marginal cost is negatives total costs increase at a decreasing rate if output increases
16 If a maximum price is set below equilibrium there will be. A price fall A price increase Excess supply Excess demand
17 Nationalization occurs when The government bans a product The government takes control of an industry the government taxes a product to a raise the price. The government taxes a product to a raise its price.
18 A public good Is provided by the government Is free Has the properties of being non excludable and non diminishable Has external costs
19 With a positive externality There is under consumption in the free market There is over consumption in the free market The government may tax to decrease production Society could be made off if less was produced
20 Which of the following is the government most likely to subsidies. Negative externalities Positive externalities Monopolies O ligopojies
21 When supply increases in an agricultural market famer's earnings might fall because. Supply is price elastic Demand is price inelastic the government buys up all the excess production All output must be sold at a maximum price
22 The demand for a product would be more inelastic. The greater is the time under consideration The greater is the number of substitutes available to buyers The less expensive is the product in relation to incomes all of the above.
23 If the price in a market is fixed by the government above equilibrium. There is excess equilibrium There is excess supply There is excess demand There is equilibrium
24 If the fprice in a market is fixed by the government below equilibrium. There is excess equilibrium There is excess supply There is excess demand There is equilibrium
25 A public good will Be underprovided in the free market Be overprovided in the free market Not be provided in the free market Has no opportunity cost
26 "Income inequality can be high in the free market and should be reduce ".This is an example of what.? Judicial economic statement. Positive economic statement Formative economic statement Normative economic statement
27 An increase in demand for a product should. Increase equilibrium price and quantity. Decrease equilibrium price and quantity. Increase equilibrium price and decrease quantity. Decrease equilibrium price and increase quantity.
28 The law of demand states that. As the quantity demanded rises, the price rises. As the price rises the quantity demanded rises As the price rises, the quantity demanded falls. As supply rises, the demand rises.
29 The price mechanism does not act as a Signal Incentive Rationing device Indicator of income
30 The best describes consumer surplus. The price consumers are willing to pay for a unit The cost of providing a unit. The profits made by a firm The difference the price a consumer pays for an item and the price he is willing to pay.
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