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 monopolistic competition, firms desire to sell more output at equilibrium because.

Question # 2

A profit maximizing monopolist in two separate markets will

Question # 3

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

Question # 4

In monopoly there is.

Question # 5

One of the following has more elastic demand.

Question # 6

A firm charges Rs. 800 for its unique word processor. If total revenue is Rs. 56,000 in July, how many word processor were sold that month.

Question # 7

If X , Y, and Z are willing to work for Rs. 4, Rs, 5, and Rs.6 respectively but N pays them Rs. 7 each, producers surplus is.

Question # 8

when there is huge change in demand following method is used to measure elasticity of demand.

Question # 9

The income elasticity of demand

Question # 10

The income effect of a price change

Question # 11

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

Question # 12

In the neighborhood of the long run equilibrium of a monopolistically competitive firm average cost will be.

Question # 13

An income demanded curve of an inferior good is.

Question # 14

In substitution effect a consumer

Question # 15

In the short run the competitive firm will produce if.

Question # 16

Indifference curve is alwyas.

Question # 17

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

Question # 18

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

Question # 19

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.

Question # 20

An indifference curve shows various combinations to goods Which gives the consumer.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 In the long run a profit maximizing firm will choose to exit a market when
A. Fixed costs exceed total costs
B. Total revenue from production is less than total costs
C. Average fixed cost is rising.
D. Marginal cost exceeds marginal revenue at the current level of production.
2 Firm A's margin of safety is.
A. 0.10
B. 0.40
C. 0.20
D. 0.30
3 A combination labour and capital where the cost of an output is minimized is called.
A. Optimum factor combination
B. Good combination
C. Least combination
D. Substitutes combination
4 When goods are compliments the cross demand curve
A. Upward to the right
B. Backward to bottom
C. Inwards to the right
D. Downwards to right
5 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.
6 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
7 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
8 Duopoly is a market situation when there is
A. Single seller
B. Many seller
C. Two seller
D. Few seller
9 If a price floor of Rs.15 is imposed, the governments cost is.
A. Rs.150
B. Rs.300
C. Rs.750
D. Rs.450
10 If the monopolist maximizes profits when marginal revenue equals marginal cost equals average cost economic profits must be.
A. Negative
B. Positive
C. Zero
D. Either a or c

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