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

Which of the following correct about firms in an oligopoly.

Question # 2

If average variable cos tis less then marginal cost then certainly.

Question # 3

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

Question # 4

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

Question # 5

Elasticity of demand of luxurious goods is always more elastic

Question # 6

Indifference curve theory is old wine in new labeled bottle is said by.

Question # 7

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

Question # 8

The Lorenz curve shows that

Question # 9

In long run equilibrium a monopolistically competitive firm will find.

Question # 10

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

Question # 11

When the demand curve is vertical its shows that the demand is.

Question # 12

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

Question # 13

Finance minister tax a commodity

Question # 14

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

Question # 15

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

Question # 16

A monopolist will discontinue production if

Question # 17

A demand curve is not related to

Question # 18

Duopoly is a market situation when there is

Question # 19

Labour has the following characteristics accept one.

Question # 20

The Isoquant curve shows different combinations of two factors of production which give the producer.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 In the short run if price falls the firm will respond by
A. Shutting down
B. Equating average variable cost to marginal revenue
C. Reducing output along its marginal cost curve as long as marginal revenue exceed average variable cost
D. None of the above
2 The statement that marginal cost = marginal revenue leads to profit maximization of loss minimization is true.
A. All the time
B. Only in the long run
C. Only if "marginal cost is rising at the point of equality.
D. Only if average total cost is falling at the point of equality
3 In perfect competition, a seller by increasing price.
A. Sell more
B. Produce its revenue
C. Decrease cost
D. Sell nothing
4 Which of the following statements abut the relationship between marginal cost and average cost is correct.
A. When MC is falling AC is falling
B. AC equals MC and MC'S lowest point
C. When MC exceeds Ac, Ac must be rising
D. When Ac exceed MC, MC must be rising
5 If the production function is Q = 8 KL the marginal rate of technical substitution of labor for capital is.
A. 8
B. K/L
C. L/K
D. B/KL
6 Which of the following is a characteristic 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 quality price and marketing
D. When firms are free is enter and exit the market
7 if a consumer is purchasing only two commodities X and Y , and the marginal utility per dollar of Y is greater than the marginal utility per dollar of X to maximize total utility with the limited income the consumer should buy.
A. .Less of both commodities
B. .More of both commodities
C. More of Y.
D. None of the above
8 If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.
A. 50%
B. 2%
C. 8%
D. 100%
9 When there is a surplus in a market
A. There is downward pressure on price
B. There is upward pressure on price
C. The market could still be in equilibrium
D. There are too many buyers chasing too few goods.
10 The monopolization of the competitive market results in a deadweight loss to society of
A. RSJK
B. JKL
C. THJ
D. RSJL

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