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

00:00
Question # 1

If a tax of Rs. 6 per units is imposed upon the suppliers, then.

Question # 2

The price elasticity of demand will increase with the length of the period to which the demand curve pertains because.

Question # 3

Economists tend to disagree primarily about.

Question # 4

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

Question # 5

The arc elasticity formula is used to estimate elasticity when

Question # 6

A monopsony is

Question # 7

A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.

Question # 8

The fundamental reason people must choose which goods to buy and consume is because of.

Question # 9

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 # 10

When a tax is levied on a good.

Question # 11

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 # 12

The law of diminishing marginal returns to a factor of production is.

Question # 13

If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.

Question # 14

In the short run if price falls the firm will respond by

Question # 15

Which of the following is a characteristic of monopolistic competition.

Question # 16

In a typical cartel agreement the cartel maximizes profit when it.

Question # 17

In monopoly the firm can

Question # 18

"The quantity demanded increases as its price increases and falls as its price falls" is called given goods, is presented by.

Question # 19

The exit of firms out of a competitive market causes the supply curve to.

Question # 20

change in quantity demanded

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 If the income elasticity of demand is +4
A. The good is an inferior good
B. The good is an inelastic normal good
C. The good is an elastic normal good
D. the good is an elastic inferior good
2 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
3 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
4 Average fixed cost
A. Is U shaped
B. Declines over the entire output range.
C. Is a long run concept only
D. Is influenced by diminishing returns to production
5 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.
6 Which of the following is a characteristics of monopolistic competition.
A. One seller serving the entire market
B. When each firm sells an identical product
C. When firms do not compete on a product's quality price and marketing.
D. When firms are free to enter and exit the market
7 The market demand for a product is found by
A. Horizontally summing the individual demand curves
B. Vertically summing the induvial demand curves
C. Both horizontally and vertically summing the individual demand curve.
D. None of the above
8 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
9 In price discrimination, which section of the market is charged the higher price.
A. The section with the richest people
B. The section with the oldest people
C. The section with the most inelastic demand
D. The section with the most elastic demand
10 Which of the following groups is most hurt by unexpected inflation.
A. Workers with cost of living adjustments in their labor contracts
B. Home owners
C. People with large debts to pay for their homes and cars
D. People with large retirement savings held in savings accounts.

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