Question # 1

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

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Labour

Capital

Organization

Both (a) and (b)

When average product is maximum, marginal product is:

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Positive

Equal to AP

Zero

Negative

What can a firm do in the short run

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Firm can increase its plants

Firm can expand its building

New firm can not enter the business

New firm can enter the business

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

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

If the demand for commodity being produced increases, then a firm in the short run ------- its variable factors

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Increases

Decreases

Keeps the same

None of three

Law of constant return is also known as:

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

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

Laws of returns are also known as:

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Laws of substitution

Laws of consumption

Laws of cost

All of three

Monopolist firm in the long run

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Always faces loss

Usually faces loss

Usually earns normal profit

Always earns abnormal profit

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)

If a monopolist wants to increase the sale of its product, it will have to --------- the price of its good

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Decrease

Increase

Keep constant

None of the three

The formula of calculating total revenue is

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P x Q

P x AC

AC x Q

TC / Q

Law of increasing return is more applicable in:

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Trade sector

Industrial sector

Agricultural sector

Power sector

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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