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

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

Question # 2

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.

Question # 3

In the short run, the supply of farm commodities is.

Question # 4

A production possibilities curve indicates that when resources are being used efficiently

Question # 5

The long run is a time period that is.

Question # 6

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

Question # 7

Elasticity of demand of luxurious goods is always more elastic

Question # 8

The market demand for a product is found by

Question # 9

When due to change in price of commodity x demand of commodity y is charged it is called.

Question # 10

The short term interest rates on bonds over the next 5 years is 6% , 7%, 9% ,10% and 8% according to the expectations Hypothesis, the interest rates on bonds with 5 years to maturity will be.

Question # 11

when there is huge change in demand following method is used to measure elasticity of demand.

Question # 12

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

Question # 13

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

Question # 14

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

Question # 15

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

Question # 16

The downward kinked demand curve facing the individual oligopolistic implies that

Question # 17

If X , Y, and Z are willing to work for Rs. 4, Rs, 5, and Rs.6 respectively but N pays them Rs. 7 each, producers surplus is.

Question # 18

An income demanded curve of an inferior good is.

Question # 19

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 # 20

A profit maximizing monopolist in two separate markets will

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 Which of the following will not be a determinant of the price elasticity of demand for a commodity.
A. The absence of substitute for the good.
B. The presence of substitutes for the good.
C. The importance of the commodity in consumers budgets
D. The cost of producing the commodity
2 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
3 Allocative efficiency is achieved under which of the following market structures.
A. Perfect competition
B. Monopolistic competition
C. Oligopoly
D. Monopoly
4 Duopoly is a market situation when there is
A. Single seller
B. Many seller
C. Two seller
D. Few seller
5 Firms entering a perfectly competitive market will cause the price of the product to
A. Decrease
B. Increase
C. Remain constant
D. Respond more to consumer demand than supply
6 When due to change in price of commodity x demand of commodity y is charged it is called.
A. Income elasticity
B. Price elasticity
C. More elastic
D. Cross elasticity
7 A monopoly there is
A. No difference between firm and industry
B. A few firms
C. Lot of firms
D. none of these
8 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
9 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
10 When the demand curve is vertical its shows that the demand is.
A. Less elastic
B. Very high elastic
C. Elastic
D. Perfectly inelastic

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