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

  • Total Questions20

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PPSC Economics Topic 2 Micro Economics

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Question # 1

If a monopolist's has only fixed costs and chooses that output at which marginal cost equals price. it will

Question # 2

When the quantity demanded is changed on the same price

Question # 3

Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.

Question # 4

Which of the following groups is most hurt by unexpected inflation.

Question # 5

If the monopolist maximizes profits when marginal revenue equals marginal cost equals average cost economic profits must be.

Question # 6

An entrepreneur who collects profits in the short run for a new invention is collecting.

Question # 7

The income effect of a price change

Question # 8

A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called.

Question # 9

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

Question # 10

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

Question # 11

Which of the policies in the table above an increase in social welfare according to pareto efficiency.

Question # 12

The demand for labor will be more elastic if

Question # 13

MC = MR= AR=AC = Price shows the longs run

Question # 14

Law of demand is not applicable on

Question # 15

Perfect competition implies

Question # 16

Which of the following is a characteristic of monopolistic competition.

Question # 17

Short run is a time frame where a firm can change its.,

Question # 18

A negatively sloped isoquant implies

Question # 19

As disposable income increases from Rs. 1500 to 2000 , saving increases from minus Rs. 50 to Rs.250 if the relationship between disposable income and saving is linear, the MPC obviously has a value of.

Question # 20

If consumers spend 15 million a month on CDs, regardless of whether the prrice they pay goes up or down that implies that their price elasticity of demand for CDs is.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 When due to change in price of commodity x demand of commodity y is charged it is called.
A. Income elasticity
B. Price elasticity
C. More elastic
D. Cross elasticity
2 When the price of an inferior goods falls ceteris paribus the substitution effect leads to ________ in the quantity purchased and the income effect leads to _______ in the quantity purchased.
A. An increase an increase
B. An increase, a decrease
C. A decrease, an increase
D. A decrease, a decrease
3 If the price of an apple increased from 50 to 60 the quantity demanded will decrease because of.
A. The substitution effect only
B. The income effect only
C. A change in income
D. The substitution and income effects.
4 If a monopolist's has only fixed costs and chooses that output at which marginal cost equals price. it will
A. Earn positive economic profits
B. Earn zero economic profits
C. Incur a loss equal to its variable costs
D. Incur a loss equal to its fixed costs
5 Short run is a time frame where a firm can change its.,
A. Total cost
B. Total production
C. Plant size
D. None of these
6 In monopoly the firm can
A. Price
B. Output
C. Either price or output
D. Both a and b
7 Which of the following concepts represents the extra revenue a firm neceives from the services of an additional unit of a factor of production.
A. Total revenue
B. Marginal physical product
C. Marginal revenues product
D. Marginal revenue
8 The short run supply curve for a competitive industry is derived by.
A. Horizontally summing the marginal cost curves for each firm in the industry
B. Horizontally summing the average variable cost curves for each firming the industry
C. Vertically summing the marginal cost curves for each firm in the industry
D. None of the above
9 Assume a cosumer buys 25 units of good X at Rs.8 and 10 units of good Y at Rs. 6 in 1980. If Px = Rs. 6 and Py = Rs. 4 in 1970 the pasasche index is.
A. 1.14
B. 1.65
C. 1.37
D. 1.47
10 Which of the following is not a basic assumption of perfect competition.
A. Free entry and exit
B. Many small sellers and buyers
C. Perfect information
D. Short run

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