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

  • Total Questions20

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PPSC Economics Topic 2 Micro Economics

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Question # 1

Firm A's margin of safety is.

Question # 2

Firm A's annual profit is.

Question # 3

If a simultaneous and equal percentage decrease in the use of all physical inputs leads to a larger percentage decrease in physical output a firm's production function is said to exhibit.

Question # 4

The income elasticity of demand

Question # 5

The arc income elasticity of demand is approximately

Question # 6

Given the above demand and supply equations for widgets, the equilibrium price and quantity is.

Question # 7

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 # 8

The arc elasticity formula is used to estimate elasticity when

Question # 9

If the monopolist maximizes profits when marginal revenue equals marginal cost equals average cost economic profits must be.

Question # 10

The competitive firm maximizes its profit by operating where

Question # 11

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

Question # 12

The are price elasticity of demand is approximately

Question # 13

Under perfect competition, the price system automatically result in efficient output selection when

Question # 14

If a monopolist's demand curve is downward sloping and linear, then its total revenue curve must be.

Question # 15

Which of the following is an automatic stabilizer.

Question # 16

The same graph shows that the firm order to maximize profits , should produce.

Question # 17

For a competitive firm the demand curve

Question # 18

If the price elasticity of demand for a non giffen good is inelastic are decreased in its price result in.

Question # 19

The classical are of the view that utility can be.

Question # 20

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

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 Which of the following is correct for the demand and supply schedules given above.
A. The demand curve is non linear
B. The slope of the supply curve is 4
C. Equilibrium quantity is 40 units
D. The slope of the demand curve is 0.5
2 For a competitive firm the demand curve
A. A horizontal
B. Coincides with the marginal revenue curve
C. Coincides with the average revenue curve
D. All of the above
3 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
4 Disposable income is equal to.
A. National income
B. National income minus taxes plus transfers
C. Real GDP
D. National income Minus taxes
5 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
6 An increase in the discount rate at the FED generally has the following effect on bond prices.
A. There is no demonstrated effect
B. Such an increase tends to lower bond prices.
C. Such an increase tends to raise bond prices
D. Bond prices are related to the government purchase and sale of bonds.
7 A linear homogenous production function would reveal.
A. Constant returns to scale
B. Increasing returns to scale
C. Decreasing return to scale
D. Doubling all inputs would more than double output
8 Given the cost data indicated in the table above the average variable cost of producing 7 units of output is
A. Rs.37
B. Rs.29
C. Rs.31
D. Greater than Rs.37
9 In the short run no firm operates with a loss unless
A. Variable cost equals fixed cost
B. Variable cost falls short of fixed cost
C. Total revenue covers variable costs
D. Total revenue covers fixed cost
10 Everyone's absolute income doubles family A's APC, according to the simple Keynesian consumption function is expected to.
A. Fall
B. Double
C. Increase
D. Halve

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