hitechpathshala

Q. 1

Which of these is not a feature of Market?

Buyers and Sellers.

Commodity, Product or Service.

Bargaining for a Price

Government Regulation and Control

Q. 2

Which of these is a feature of the Market?

Perishable Nature of the commodity

Government Regulation and Control

One Price for a Product or Service at a given time

Scarcity of Resources

Q. 3

Which of the following is an element of Market Structure?

Buyers & Sellers

A product or service

Bargaining for a Price

All of the above

Q. 4

The Market for ultimate consumers is known as

Whole Sale Market

Retail Market

Unregulated Market

Regulated Market

Q. 5

Which of these is not a Market Structure in Economics?

Perfect Competition

Monopoly

Monopolistic Competition

Intense Competition

Q. 6

Free Entry / Exit is a characteristic feature of

Perfect Competition

Monopoly

Monopolistic Competition

a) and (c

Q. 7

Free Entry / Exit is a not a characteristic feature of —

Perfect Competition

Monopoly

Monopolistic Competition

All the above.

Q. 8

Free Entry / Exit is possible in —

short—run

long—run

Both (a) and (b)

Neither (a) nor (b

Q. 9

Assume that when price is Rs. 20, the quantity demanded is 9 units, and when price is

Rs. 19, the quantity demanded is 10 units. Based on this information, what is the marginal revenue resulting from an increase in output from 9 units to 10 units.

Rs. 20

Rs. 19

Rs. 10

Rs. 1

Q. 10

Assume that when price is Rs. 20, the quantity demanded is 15 units, and when price is
Rs. 18, the quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units?

Rs. 18

Rs. 16

-Rs. 12

Rs. 28

Q. 11

Suppose a firm is producing a level of output such that MR > MC, what should be firm do to maximize its profits?

The firm should do nothing.

The firm should hire less labour.

The firm should increase price.

The firm should increase output.

Q. 12

Which of the following is not an essential condition of pure competition?

Large number of buyers and sellers

Homogeneous product

Freedom of entry

Absence of transport cost

Q. 13

What is the shape of the demand curve faced by a firm under perfect competition?

Horizontal

Vertical

Positively sloped

Negatively sloped

Q. 14

Which is the first order condition for the profit of a firm to be maximum?

AC = MR

MC = MR

MR = AR

AC = AR

Q. 15

Which of the following is not a characteristic of a “price-taker”?

TR = P x Q

AR = Price

Negatively – sloped demand curve

Marginal Revenue = Price

Q. 16

With a given supply curve, a decrease in demand causes

an overall decrease in price but an increase in equilibrium quantity.

an overall increase in price but a decrease in equilibrium quantity.

an overall decrease in price and a decrease in equilibrium quantity.

no change in overall price but a reduction in equilibrium quantity.

Q. 17

It is assumed in economic theory that

decision making within the firm is usually undertaken by managers, but never by the owners.

the ultimate goal of the firm is to maximise profits, regardless of firm size or type of business organisation.

as the firm’s size increases, so do its goals.

the basic decision making unit of any firm is its owners.

Q. 18

Assume that consumers’ incomes and the number of sellers in the market for good A both decrease. Based upon this information, we can conclude, with certainty, that the equilibrium:

price will increase.

price will decrease.

quantity will increase.

quantity will decrease.

Q. 19

Which of the following is not a condition of perfect competition?

A large number of firms.

Perfect mobility of factors.

Informative advertising to ensure that consumers have good information.

Freedom of entry and exit into and out of the market.

Q. 20

Which of the following is not a characteristic of a perfectly competitive market?

Large number of firms in the industry.

Outputs of the firms are perfect substitutes for one another.

Firms face downward-sloping demand curves.

Resources are very mobile.

Q. 21

Which of the following is not a characteristic of monopolistic competition?

Ease of entry into the industry.

Product differentiation.

A relatively large number of sellers.

(d) A homogeneous product.

Q. 22

Monopoly may arise in a product market because

A significantly important resource for the production of the commodity is owned by a single firm.

The government has given the firm patent right to produce the commodity.

The costs of production and economies of scale makes production by a single producer more efficient.

All the above.

Q. 23

Oligopolistic industries are characterized by:

a few dominant firms and substantial barriers to entry.

a few large firms and no entry barriers.

a large number of small firms and no entry barriers.

one dominant firm and low entry barriers.

Q. 24

When price is less than average variable cost at the profit-maximising level of output, a firm should:

produce where marginal revenue equals marginal cost if it is operating in the short run.

produce where marginal revenue equals marginal cost if it is operating is the long run.

shut down, since it will lose nothing in that case.

shut down, since it cannot even cover its variable costs if it stays in business.

Q. 25

A purely competitive firm’s supply schedule in the short run is determined by

its average revenue.

its marginal revenue.

its marginal utility for money curve.

its marginal cost curve

Q. 26

One characteristic not typical of oligopolistic industry is

horizontal demand curve.

too much importance to non-price competition.

price leadership.

a small number of firms in the industry.

Q. 27

The structure of the toothpaste industry in India is best described as

perfectly competitive.

monopolistic.

monopolistically competitive.

oligopolistic.

Q. 28

The structure of the cold drink industry in India is best described as

perfectly competitive.

monopolistic.

monopolistically competitive.

oligopolistic.

Q. 29

Which of the following statements is incorrect?

Even a monopolistic firm can have losses.

Firms in a perfectly competitive market are price takers.

It is always beneficial for a firm in a perfectly competitive market to discriminate prices.

Kinked demand curve is related to an oligopolistic market.

Q. 30

Under perfect competition, in the long run, there will be no _________ _ .

normal profits

supernormal profits.

production

costs

CHAPTER:7 MARKET FORMS, MARKET PRICE AND OUTPUT DETERMINATION

Marks: 30