Question:

In short run a firms in monopolistic competition

A.

Always earns profit

B.

Incurs loss

C.

Earns normal profit only

D.

May earn normal profit, abnormal profit or incur losses

Answer» d. May earn normal profit, abnormal profit or incur losses

Question:

‘Production of commodities by means of commodities’ is relatedto:

A.

Karl Marx

B.

Kaldor

C.

Steedman

D.

Piero Sraffa

Answer» d. Piero Sraffa

Question:

The ratio of money supply to high powered money is:

A.

SLR

B.

CRR

C.

Money Multiplier

D.

Bank rate

Answer» c. Money Multiplier

Question:

Which is true of normal profits

A.

they are necessary to keep a firm in the industry in the long run.

B.

they are zero under pure competition in the long run.

C.

they are excluded from a firm\s costs of production.

D.

they are greater than the opportunity cost to the firm.

Answer» a. they are necessary to keep a firm in the industry in the long run.

Question:

Which of the following markets comes close to satisfying the assumptions of a perfectlycompetitive market structure?

A.

The stock market

B.

The market for agricultural commodities such as wheat or corn

C.

The market for petroleum and natural gas

D.

All of the above come close to satisfying the assumptions of perfect competition

Answer» d. All of the above come close to satisfying the assumptions of perfect competition

Question:

Marginal revenue curve under imperfect competition is

A.

Upward sloping

B.

Downward sloping

C.

Horizontal straight line

D.

Vertical straight line

Answer» d. Vertical straight line

Question:

Given the supply of a commodity in the market period, the price of the commodity isdetermined by

A.

the market demand curve alone

B.

the market supply curve alone

C.

the market demand curve and the market supply curve

D.

none of the above.

Answer» a. the market demand curve alone

Question:

When there are only two sellers, the market is called as:

A.

Oligopoly

B.

Monopsony

C.

Duopoly

D.

Bilateral monopoly

Answer» c. Duopoly

Question:

Selling cost is a feature of

A.

Monopolistic competition

B.

Perfect competition

C.

Monopoly

D.

Bilateral monopoly

Answer» a. Monopolistic competition

Question:

Marginal revenue is equal to price for which one of the following types of marketstructure?

A.

Monopoly

B.

Perfect competition

C.

Monopolistic competition

D.

Oligopoly

Answer» b. Perfect competition