1st Year Principles of Economics Chapter 7 TestPrice And Output Determination

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. Monopoly can also be called:

   1. Perfect competition

   2. Imperfect competition

   3. Competition

   4. None

2. What can a firm do in the short run:

   1. Firm can increase its plants

   2. Firm can expand its building

   3. New firm can not enter the business

   4. New firm can enter the business

3. If there are large number of firms in some particular industry then situation is called:

   1. Perfect competition

   2. Imperfect competition

   3. Monopoly

   4. Monopolistic competition

4. Monopolist firm in the long run:

   1. Always face loss

   2. Usually faces loss

   3. Usually earns normal profit

   4. Always earns abnormal profit

5. A firm will be in equilibrium when its:

   1. Marginal revenue is less than marginal cost

   2. Marginal revenue is equal to marginal cost

   3. Marginal revenue is more than marginal cost

   4. Marginal revenue is zero

6. If the demand for commodity being produced increases, then a firm in the short run ...... its variable factors:

   1. Increases

   2. Decreases

   3. Decreases much

   4. Keeps the same

7. If the equation is this MC=MR=AR(P)=AC, then the firm:

   1. Earns normal profit

   2. Earns abnormal profit

   3. Bears minimum loss

   4. Bears abnormal loss

8. If a monopolist wants to increase the sale of its product it will have to ...... the price of its goods:

   1. Decrease

   2. Increase

   3. Keep constant

   4. None of three

9. If the most part of total supply of commodity is produced by one firm, it is called:

   1. Oligopoly

   2. Monopoly

   3. Perfect competition

   4. Monopolistic competition

10. Monopoly is opposite to:

    1. Perfect competition

    2. Imperfect competition

    3. Perfect competition and imperfect competition both

    4. Oligopoly