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

Suppose an individual spends all his income on only two goods, good X and good Y moreover suppose that you were asked to derive his price consumption curve for good Y Which of the following would be allowed to very.

Question # 2

In the long run a profit maximizing firm will choose to exit a market when

Question # 3

The supply curve of a perfectly competitive firm

Question # 4

An exceptional demand curve is.

Question # 5

In the long run a profit maximizing monopoly produces an output volume that

Question # 6

When the demand curve is vertical its shows that the demand is.

Question # 7

An economy that falls to realize all of its p9otential gains from specialization is.

Question # 8

In the short run no firm operates with a loss unless

Question # 9

A linear homogenous production function would reveal.

Question # 10

Which of the following would cause the demand curve for an input to shift.

Question # 11

In substitution effect a consumer

Question # 12

In perfect competition the transpiration cost

Question # 13

The monopolization of the competitive market results in a deadweight loss to society of

Question # 14

Which of the following does not apply to pareto efficiency.

Question # 15

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

Question # 16

Which of the following is a function of money

Question # 17

If the prices of both goods increase by the same percent the budget line will

Question # 18

Firms entering a perfectly competitive market will cause the price of the product to

Question # 19

Skills that can be transferred to other employers are called.

Question # 20

As long as the principle of diminishing marginal utility is operating any increased consumption of good.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 Foundation of law of demand is.
A. Law of diminishing marginal utility
B. Law of substitution
C. Law of increasing return to scale
D. Law of diminishing marginal rate of substitution.
2 If a simultaneous and equal percentage decrease in the use of all physical inputs leads to a larger percentage decrease in physical output a firm's production function is said to exhibit.
A. Decreasing returns to scale
B.
Constant returns to scale
C. Increasing returns to scale
D. Diseconomies of scale
3 When the demand curve is vertical its shows that the demand is.
A. Less elastic
B. Very high elastic
C. Elastic
D. Perfectly inelastic
4 The elasticity of demand for cigarettes by a non smoker is.
A. Unitary price elastic
B. Relatively price elastic
C. Perfectly price elastic
D. Perfectly price inelastic
5 The fundamental reason people must choose which goods to buy and consume is because of.
A. Scarcity
B. Specialization
C. People engaging in exchange
D. The fact there are many different economic agents
6 If a good is normal then the demand curve for that good must be.
A. Downward sloping
B. Upward sloping
C. Perfectly elastic
D. Completely inelastic
7 The arc elasticity formula is used to estimate elasticity when
A. The product is thought to be inelastic
B. The product is thought to be elastic
C. The demand function is known
D. There are two observations of price and quantity
8 MC = MR= AR=AC = Price shows the longs run
A. Monopolist firm
B. Oligopolistic firm
C. Competitive firm
D. Both a and b
9 When a tax is levied on a good.
A. The market price falls because demand declines.
B. The market price falls because supply falls.
C. A wedge is placed between the price buyers pay and the price sellers receive
D. The market price rises because demand falls.
10 The are price elasticity of demand is approximately
A. 0.3
B. 3.3
C. 6.0
D. 0.2

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