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

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

Question # 2

A monopoly market.

Question # 3

For a competitive firm the demand curve

Question # 4

In a perfectly competitive market if firms are earning an economic profit the economic profit.

Question # 5

In order to constitute an oligopolistic market structure.

Question # 6

The statement that marginal cost = marginal revenue leads to profit maximization of loss minimization is true.

Question # 7

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

Question # 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.

Question # 9

The conditions necessary for a firm to be able to price discriminate include.

Question # 10

If a person's MPC is always two thirds and that person's break even point is Rs. 6,000, at a disposable income of Rs.9,000 the person's consumption expenditures will be.

Question # 11

The monopolization of the competitive market results in a deadweight loss to society of

Question # 12

A production function for a firm which produces a product with two or more inputs.

Question # 13

Micro economics studies such topics as

Question # 14

The marginal rate of substitution of two goods can be obtain from

Question # 15

Which of the following explains why demand curves slope downward.

Question # 16

When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by other firm in the market we have

Question # 17

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 # 18

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

Question # 19

In a typical cartel agreement the cartel maximizes profit when it.

Question # 20

Firm A's margin of safety is.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 The most important determinant of price elasticity is.
A. The slope of the demand curve
B. The availability of substitutes
C. The price of other goods
D. The income of the consumer
2 The short run supply curve for a competitive industry is derived by.
A. Horizontally summing the marginal cost curves for each firm in the industry
B. Horizontally summing the average variable cost curves for each firming the industry
C. Vertically summing the marginal cost curves for each firm in the industry
D. None of the above
3 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
4 Suppose that the price elasticity of demand for maple syrup has been estimated at-2 if quantity demanded increased by 10 precent, price must have changed by.
A. 5 percent lower
B. 5 percent higher
C. 10 percent lower
D. 10 percent higher
5 Which of the following does not characterize monopolistic competition.
A. Product differentiation
B. Many producers
C. Absence of advertising
D. Some control over price
6 As long as the principle of diminishing marginal utility is operating any increased consumption of a good.
A. Lowers total utility
B. Produces negative total utility
C. Lowers marginal utility and therefore total utility
D. Lowers marginal utility, but may raise total utility.
7 Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is
A. Rs. 1500
B. Rs.1300
C. Rs.1200
D. Rs.300
8 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
9 The average total cost when 20 units of output are produced is
A. Rs. 2,900
B. Rs.195
C. Rs. 20
D. Rs.900
10 The demand for labor slopes down and to the right because of.
A. The law of demand
B. The iron law of wages
C. The law of diminishing marginal returns
D. Economies of scale

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