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

The Marginal cost of product W exhibiting positive externalities is McW = 25 + 5 Qs, the competitive price for each unit of W (Pw) is Rs. 175 and the positive externality is worth Rs. 100 to society for each unit produced. Society considers product W under produced by how many units.

Question # 2

One of the following has more elastic demand.

Question # 3

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

Question # 4

When a tax is levied on a good.

Question # 5

As long as the principle of diminishing marginal utility is operating any increased consumption of a good.

Question # 6

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.

Question # 7

If the production function is Q = 8 KL the marginal rate of technical substitution of labor for capital is.

Question # 8

The "compensated" demand curve is the demand curve that.

Question # 9

As the opportunity cost of a good falls, ceteris paribus the substitution effect implies that people buy

Question # 10

In contract to perfectly competitive markets monopolists

Question # 11

An oligopolistic industry can be characterized by all of the following except

Question # 12

If a monopolist faces a downward sloping market demand curve its.

Question # 13

A market demand curve can be derived by adding all the individual demand curves

Question # 14

Firm A's annual profit is.

Question # 15

In long run equilibrium a monopolistically competitive firm will find.

Question # 16

The exit of firms out of a competitive market causes the supply curve to.

Question # 17

The tax is question 52 is

Question # 18

An -increase the expected future price of a good.

Question # 19

The negative slope of the demand curve indicates that there is _______ relationship between the price and the quantity demanded.

Question # 20

A demand curve shows that relation between price and demand.

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PPSC Economics Chapter 2 Important MCQ's

Sr.# Question Answer
1 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
2 Law of demand is not applicable on
A. Daily goods
B. Scarce goods
C. Consumer goods
D. Producer goods
3 A Market situation where the number of buyers is very large and the number of sellers are very small is called.
A. Perfect competition
B. Duopoly
C. Oligopoly
D. In perfect competition
4 The "Law of demand" most directly means that consumers buy
A. More of a good the higher their incomes, ceteris paribus.
B. Less of good the higher its price ceteris paribus
C. Buy more of a good the less is its supply ceteris paribus
D. Buy less of a good the greater is its supply ceteris paribus
5 In perfect competition price is settled by
A. Sellers
B. Buyers
C. Producers
D. Both a and b
6 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.
7 In perfect competition, a seller by increasing price.
A. Sell more
B. Produce its revenue
C. Decrease cost
D. Sell nothing
8 In contract to perfectly competitive markets monopolists
A. Do no have to worry about market demand
B. Sell only if demand is inelastic
C. Can never incur an economic loss
D. Can earn an economic profit indefinitely
9 What is the per unit marginal cost of increasing production from 20 to 25 units.
A. Rs. 3,500
B. Rs.100
C. Rs.4,000
D. Rs.500
10 If the price of product X falls and this change increases the demand for product Y then.
A. X and Y are complements
B. X and Y are substitutes
C. X is an inferior good
D. Y is an inferior good

Test Questions