Question # 1

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

Which law is applicable when human and natural forces are balance ?

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

When average product is maximum, marginal product is:

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Positive

Equal to AP

Zero

Negative

Law of constant return is also known as:

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

Shut down point appears, when

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AVC=AR

AVC>AR

AVC<AR

AC=AR

The formula of calculating total revenue is

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P x Q

P x AC

AC x Q

TC / Q

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

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Loss

Profit

Profit or loss

Utility

Usually elasticity of demand in equilibrium situation under monopoly is

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Equal than unity

Less than unity

more than unity

Zero

A firm is in equilibrium when its

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Marginal revenue is equal to marginal cost

Marginal revenue is more than marginal cost

Marginal revenue is less than marginal cost

Marginal revenue is equal to average cost

Firm earns abnormal profit, when

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AC=AR

AR>AC

AR<AC

AC=MC

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

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Labour

Capital

Organization

Both (a) and (b)

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

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Earns normal profit

Earns abnormal profit

Bears minimum loss

Bears abnormal loss

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

When total production decreases, marginal product is:

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Positive

Negative

Zero

Infinite

Industry is in equilibrium under perfect competition in the long run, when every existing firm in the industry

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Is earning abnormal profit

Is earning normal profit

Is facing minimum loss

Is facing abnormal loss

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

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