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 groups is most hurt by unexpected inflation.

Question # 2

The price of salsa rises, How does the increase in the price of salsa affect the supply of salsa.

Question # 3

If the price of product X falls and this change increases the demand for product Y then.

Question # 4

In perfect competition the transpiration cost

Question # 5

The arc income elasticity of demand is approximately

Question # 6

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

Question # 7

Law of variable proportion is also called.

Question # 8

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

Question # 9

Labour has the following characteristics accept one.

Question # 10

Law of demand is not applicable on

Question # 11

According to Keynes, when the great depression started the government should be.

Question # 12

If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.

Question # 13

In perfect competition there is.

Question # 14

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

Question # 15

Which of the following is not a basic assumption of perfect competition.

Question # 16

In the short run the competitive firm will produce if.

Question # 17

If the income elasticity of demand is +4

Question # 18

The market demand for a product is found by

Question # 19

The demand curve for labor for a monopolist when other inputs are fixed is equal to its

Question # 20

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.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 A firm's long run average total cost lineis
A. Identical to its long run marginal cost line
B. Also its long run supply curve
C. In fact the average total cost curve of the optimal plant
D. Tangent to all the curve of short run average total cost
2 Allocative efficiency is achieved under which of the following market structures.
A. Perfect competition
B. Monopolistic competition
C. Oligopoly
D. Monopoly
3 Which of the following does not represent a barrier to entry into a market.
A. Import quotas
B. patent laws
C. Government franchleses
D. Anti trust legislation
4 The firm under monopolistic competition is likely to produce less and set a higher price than under perfect competition because.
A. The firm faces decreasing returns to scale
B. The firm faces increasing costs
C. The firm must incur selling expenses including advertising.
D. The firm faces a downward sloping demand curve
5 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.
6 Which of the following groups is most hurt by unexpected inflation.
A. Workers with cost of living adjustments in their labor contracts
B. Home owners
C. People with large debts to pay for their homes and cars
D. People with large retirement savings held in savings accounts.
7 The largest source of tax revenue for the federal government is
A. The prerenal income tax
B. The social security tax
C. the property tax
D. The sales tax
8 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
9 The arc income elasticity of demand is approximately
A. 0.02
B. 1.9
C. 3.3
D. 0.5
10 Under perfect competition, the price system automatically result in efficient output selection when
A. MC = MR
B. MC = MU
C. P = ATC
D. P > AVC

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