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

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

Question # 2

In an industry with a falling long term supply curve, which of the following is true.

Question # 3

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

Question # 4

The "Law of demand" most directly means that consumers buy

Question # 5

The price of salsa rises, How does the increase in the price of salsa affect the supply of salsa.

Question # 6

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

Question # 7

If the price of factor A is Rs.8.00 per hour, and its marginal product is 10 units, and the price of factor B is Rs. 5.00 and its marginal product is 9, is the producer is likely to.

Question # 8

When the demand curve is a straight line the elasticity of demand at the center point will be.

Question # 9

The most important determinant of price elasticity is.

Question # 10

An increase in price causes an increase in total revenue when.

Question # 11

As long as all prices remain constant an increase in money income results in.

Question # 12

Firms in monopolistic competition compete on

Question # 13

A monopolist will discontinue production if

Question # 14

Law of variable proportion is also called.

Question # 15

When goods are compliments the cross demand curve

Question # 16

The demand curve of unitary elastic commodity is.

Question # 17

The negative slope of the demand curve indicates that there is _______ relationship between the price and the quantity demanded.

Question # 18

A combination labour and capital where the cost of an output is minimized is called.

Question # 19

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.

Question # 20

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

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 In monopolistic competition, firms desire to sell more output at equilibrium because.
A. Price is greater than average cost
B. Price is greater than average variable cost
C. Price is greater than marginal cost
D. Price is equal to marginal revenue
2 Goods which can be consume directly are
A. Producer goods
B. Consumer goods
C. Free goods
D. Economics goods
3 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
4 A utility contour shows all the alternative combinations of two consumption goods that.
A. Can be produced with a given set of resources and technology
B. Yield the same total of utility
C. Can be purchased with a given budget at given prices
D. Equate the marginal utilities of these goods and therefore make the consumer indifferent between them.
5 The largest source of tax revenue for the federal government is
A. The prerenal income tax
B. The social security tax
C. the property tax
D. The sales tax
6 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
7 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
8 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.
A. Remains is balance
B. Has a surplus
C. Has a deficit
D. None of these
9 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.
10 Indifference curve theory is old wine in new labeled bottle is said by.
A. Marshall
B. Griffin
C. Ricardo
D. Allen

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