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

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

Question # 2

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

Question # 3

A monopolist who is charging high price operates on.

Question # 4

Some goods are not closely related to each other and are neither substitutes nor complements for such goods the cross price elasticity of demand would be.

Question # 5

If an increase in the price of gasoline increases the demand for gas hybrid cars, then

Question # 6

Perfect competition implies

Question # 7

A Market situation where the number of buyers is very large and the number of sellers are very small is called.

Question # 8

The method most commonly used to test the overall significance of a regression is.

Question # 9

In pure monopoly there is.

Question # 10

If the price of both goods increase by the same percent , the budget line will.

Question # 11

If there is no price surprise, total output is.

Question # 12

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 # 13

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

Question # 14

In the long run a profit maximizing monopoly produces an output volume that

Question # 15

The classical are of the view that utility can be.

Question # 16

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 # 17

In substitution effect a consumer

Question # 18

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

Question # 19

An income demanded curve of an inferior good is.

Question # 20

If the production function is Q = 8 KL the marginal rate of technical substitution of labor for capital is.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 Allocative efficiency is achieved under which of the following market structures.
A. Perfect competition
B. Monopolistic competition
C. Oligopoly
D. Monopoly
2 If average fixed cost is 40 and average variable cost is 80 for a given output we the know that average total cost is.
A. 40
B. 120
C. 80
D. None of the above
3 To maximize revenue, an excise tax should be imposed on a product
A. That has a highly elastic demand curve
B. Such as St. Joseph's children's' aspirin.
C. Such as salt
D. such as Toyota automobiles
4 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.
A. Inferior goods
B. Substitutes
C. Complements
D. Normal goods
5 If the demand curve for a good is downward sloping then the good must be.
A. Normal
B. Inferior
C. Giffen
D. Either a or b
6 Firms in monopolistic competition compete on
A. Price
B. Quality
C. Advertising
D. All of the above are correct
7 A firm that is a price taker faces a perfectly
A. Elastic supply curve
B. Inelastic demand curve
C. Elastic demand curve
D. In elastic supply curve
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 A demand curve is not related to
A. The time period
B. The price of the commodity
C. The price of substitution
D. Any of above
10 If the prices of both goods increase by the same percent the budget line will
A. Shift parallel to the left
B. shift parallel to the right
C. Pivot about the x axis
D. Pivot abut the Y axis

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