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

In perfect competition a firm is.

Question # 2

What is the per unit marginal cost of increasing production from 20 to 25 units.

Question # 3

"Treating an individual as typical of a group" in the definition of.

Question # 4

If the estimated values of Y and Py in 1987 are Rs. 20,000 and Rs. 6 respectively, what is the maximum price of X.

Question # 5

A market demand curve can be derived by adding all the individual demand curves

Question # 6

The income elasticity of demand

Question # 7

If the government lower taxes by $10 billion, the Real GDP will rise by

Question # 8

In pure monopoly there is.

Question # 9

The most important determinant of price elasticity is.

Question # 10

In monopolistic competition firm sell

Question # 11

Average fixed cost

Question # 12

The total utility of the third unit of product x is.

Question # 13

A firm's total revenue is Rs. 4,500 when it sells 15 pairs of boots compared to Rs. 4,480 when it sells 14 pairs,. The marginal revenue of the 15th pair of boots is.

Question # 14

How much will a speculator invest now if he expects to earn Rs. 144 two years from now assuming the nominal rate of interest is 20%

Question # 15

Elasticity of demand of luxurious goods is always more elastic

Question # 16

In the short run a competitive firm's supply curve is.

Question # 17

Given a proportional income tax and a government budget that is currently in balance, an increase in autonomous investment ceteris paribus, Increases equilibrium income and the budget.

Question # 18

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

Question # 19

A production possibilities curve indicates that when resources are being used efficiently

Question # 20

Price elasticity at a given price is not affected by.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 The "compensated" demand curve is the demand curve that.
A. Shows only the income effect
B. Shows only the substitution effect
C. Shows both the income and substitution effects
D. Shows the Geffen good demand curve
2 At level of income and output of 100 in the diagram above
A. APC < 1
B. Equilibrium occurs
C. Consumption expenditures are equal to 100
D. MPC > APC
3 An increase in price causes an increase in total revenue when.
A. Demand is elastic
B. Demand is inelastic
C. Demand is unit elastic
D. All of the above are possible
4 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
5 A typical demand curve cannot be
A. Rising upwards to the right
B. A straight line
C. Concave to origin
D. Convex to origin
6 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
7 The method most commonly used to test the overall significance of a regression is.
A. The t test
B. The F -test
C. Chi square test
D. R
8 If a monopolist's demand curve is downward sloping and linear, then its total revenue curve must be.
A. Identical to the demand curve
B. A ray from the origin with a slope equal to price
C. negative sloped with twice the slope of the demand curve
D. A rising function of output that increases at a decreasing rate , reaches a maximum, then falls.
9 As long as the principle of diminishing marginal utility is operating any increased consumption of a good.
A. Lowers total utility
B. Produces negative total utility
C. Lowers marginal utility and therefore total utility
D. Lowers marginal utility, but may raise total utility.
10 Which of the following does not characterize monopolistic competition.
A. Product differentiation
B. Many producers
C. Absence of advertising
D. Some control over price

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