Online MCQ Assignment Answer

QN1: Increase in demand is shown by:

a. Upward movement on the demand curve
b. Downward movement on the demand curve
c. Rightward shift of the demand curve
d. Leftward shift of the demand curve

Answer

Answer: c. Rightward shift of the demand curve

QN2: Coefficient of elasticity of demand is negative. It means:

a. Consumers sometimes buy negative units of commodity
b. Price and quantity demanded move in same capital
c. Law of demand holds
d. The two goods are complimentary to each other

Answer

Answer: d. The two goods are complimentary to each other

QN3: This is an assumption of law of demand:

a. Price of the commodity should not change
b. Quantity should not change
c. Supply should not change
d. Income of consumer should not change

Answer

Answer: b. Quantity should not change

QN4: Which of the following statements is NOT TRUE of indifference curves?

a. They exhibit higher levels of utility as you move from the origin
b. They could intersect
c. They are downward sloping
d. They are convex to the origin

Answer

Answer: d. They are convex to the origin

QN5: Ostentation means goods purchased not for ___ but for snob appeal.

a. Utility
b. Direct satisfaction
c. Demand
d. None of these

Answer

Answer: b. Direct satisfaction

QN6: An indifference curve between two commodities where one is a bad and the other a good would:

a. be vertical to the axis measuring units consumed of the good
b. remain downward sloping
c. be vertical to the axis measuring units consumed of the bad
d. be upward sloping

Answer

Answer: d. be upward sloping

QN7: “In the case of a Giffen good, the demand curve will be:”

a. Horizontal
b. Downward-sloping to the right.
c. Vertical
d. Upward-sloping to the right

Answer

Answer: d. Upward-sloping to the right

QN8: The situation in which limited resources are being used most effectively is called:

a. efficient
b. economic
c. abundant
d. scarce

Answer

Answer: a. efficient

QN9: Contraction of demand is shown by:

a. Upward movement on the demand curve
b. Downward movement on the demand curve
c. Rightward shift of the demand curve
d. Leftward shift of the demand curve

Answer

Answer: a. Upward movement on the demand curve

QN10: The opportunity cost of a particular activity

a. is the same for everyone pursuing this activity
b. may include both monetary costs and forgone income
c. always decreases as more of that activity is pursued
d. usually is known with certainty e. measures the direct benefits of that activity

Answer

Answer: b. may include both monetary costs and forgone income

QN11: Expansion of demand is shown by:

a. Upward movement on the demand curve
b. Downward movement on the demand curve
c. Rightward shift of the demand curve
d. Leftward shift of the demand curve

Answer

Answer: b. Downward movement on the demand curve

QN12: Economics is

a. the study of the markets for stocks and bonds
b. the study of choice under conditions of scarcity
c. exclusively the study of business firms
d. fundamentally the same as sociology e. applicable only when scarcity is not a problem

Answer

Answer: c. exclusively the study of business firms

QN13: People and organizations have to make choices about how to allocate time and money because of

a. government rules and regulations
b. corporate control of our lives
c. scarcity of time and money
d. religious values

Answer

Answer: c. scarcity of time and money

QN14: The three fundamental questions of economic organization are:

a. “when, for whom, and how”
b. “how, what, and for whom”
c. “who, how, and when”
d. “what, who, and why”

Answer

Answer: b. “how, what, and for whom”

QN15: Law of demand shows relation between:

a. Income and price of commodity
b. Price and quantity of a commodity
c. Income and quantity demand
d. Quantity demanded and quantity supplied

Answer

Answer: b. Price and quantity of a commodity

QN16: “In our model of decision making under different conditions, what is the difference between risk and uncertainty?”

a. “Under risk, there is a well defined problem; under uncertainty, the definition is unclear”
b. “Under risk, information is reliable; under uncertainty, it is not”
c. “Under risk, probabilities can be measured; under uncertainty, they cannot”
d. “Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies”

Answer

Answer: d. “Under risk, choices are clear and the chances of different outcomes can be measured; under uncertainty, neither applies”

QN17: “Customers will be ready to purchase a specified quantity of a product, at a specified price, if marginal utility of further spending is equivalent to the”

a. Cost
b. opportunity cost
c. revenue
d. product cost

Answer

Answer: b. opportunity cost

QN18: Tastes & first choices are determinants of

a. supply
b. demand
c. demand curve
d. elasticity

Answer

Answer: b. demand

QN19: “Demand Function, X = f (P) where X = demand of a commodity; P = Price of the commodity”

a. Demand is directly related to price
b. Price is inversely related to demand
c. Price is directly related to demand
d. None of the above

Answer

Answer: c. Price is directly related to demand

QN20: An indifference curve shows combinations of two goods that:

a. could be available to the consumer in a given time period
b. would provide the consumer with the same level of satisfaction
c. could provide the consumer with similar levels of satisfaction
d. a consumer could buy with their given income.

Answer

Answer: b. would provide the consumer with the same level of satisfaction

QN21: “In a Sweezy Oligopoly, if a firm decreases its prices, a competitor will?”

a. Increase prices
b. Decrease prices
c. Keep their prices constant
d. Either B or C

Answer

Answer: b. Decrease prices

QN22: “The ‘law of diminishing returns to scale’ refers to the general tendency for ___to eventually diminish as more of the variable input is employed, given the quantity of fixed inputs.”

a. marginal product
b. average total cost
c. marginal cost
d. average product

Answer

Answer: a. marginal product

QN23: “If both average cost (AC) and marginal cost (MC) are U shaped, then”

a. AC will reach a minimum at a level of output that is less than that at which MC reaches a minimum.
b. the total cost curve will be a straight line.
c. AC will reach a minimum at a level of output that is greater than that at which MC reaches a minimum.
d. both AC and MC will reach a minimum at the same level of output

Answer

Answer: c. AC will reach a minimum at a level of output that is greater than that at which MC reaches a minimum.

QN24: “If firms compete in a Cournot fashion, then”

a. each firm views the output of the rival as given.
b. each firm views the prices of rivals as given.
c. each firm views the profits of rivals as given.
d. all of the above

Answer

Answer: a. each firm views the output of the rival as given.

QN25: The obligatory condition for the maximization of output given the factor prices:

a. Isoquant line must be tangent to one of the isocosts.
b. Isoquant line must be tangent to all the isocosts.
c. Isoquant line need not be tangent to isocost.
d. Isoquant line needs to be parallel to isocost.

Answer

Answer: a. Isoquant line must be tangent to one of the isocosts.

QN26: A monopolistically competitive firm in short-run equilibrium

a. will make negative proit (lose money).
b. will make zero profit (break-even).
c. will make positive profit.
d. Any of the above are possible

Answer

Answer: d. Any of the above are possible

QN27: A stable equilibrium in the Prisoner’s Dilemma game is known as a:

a. Baumol equilibrium.
b. Porter equilibrium.
c. Nash equilibrium.
d. Douglas equilibrium.

Answer

Answer: c. Nash equilibrium.

QN28: “If a firm’s revenues just cover all its opportunity costs, then:”

a. normal profit is zero
b. economic profit is zero
c. total revenues equal its explicit costs
d. total revenues equal its implicit costs

Answer

Answer: b. economic profit is zero

QN29: Marginal cost is computed as

a. Prime cost + All Variable overheads
b. Direct material + Direct labor + Direct Expenses + All variable overheads
c. Total costs All fixed overheads
d. All of the above

Answer

Answer: a. Prime cost + All Variable overheads

QN30: Perfect competition occurs in a market where there are many firms each selling:

a. an identical product
b. a similar product
c. a unique product
d. a competitive product.

Answer

Answer: a. an identical product

QN31: “Q = f (L, K, I, R, E)… iss considered as”

a. Production Function
b. Production Function with one variable inputs
c. Production Function with two variable inputs
d. Production Function with various inputs

Answer

Answer: b. Production Function with one variable inputs

QN32: A long-run is also expressed as a series of short-runs.

a. TRUE
b. FALSE
c. Can t say
d. None of the above

Answer

Answer: a. TRUE

QN33: Game theory is concerned with:

a. How production can be managed at least cost.
b. How individuals make decisions taking into account the actions of others.
c. Managing a financial portfolio to minimize risk.
d. None of the above.

Answer

Answer: b. How individuals make decisions taking into account the actions of others.

QN34: “In perfect competition, a firm’s marginal revenue equals its:”

a. average revenue
b. price
c. total revenue
d. both a and b

Answer

Answer: b. price

QN35: A monopolistically competitive firm in long-run equilibrium

a. will make negative profit
b. will make zero profit
c. will make positive profit
d. Any of the above are possible

Answer

Answer: b. will make zero profit

QN36: “The marginal principle asserts that, in general, when net benefit is maximized”

a. total benefit will be equal to total cost.
b. average benefit will be equal to average cost.
c. marginal benefit will be equal to marginal cost.
d. average cost will be above total cost but below average benefit.

Answer

Answer: c. marginal benefit will be equal to marginal cost.

QN37: “In the long run, the typical firm:”

a. has all inputs fixed except one.
b. Has only variable inputs
c. May change some but not of all its inputs
d. Is concerned with its variable cost of production

Answer

Answer: b. Has only variable inputs

QN38: A cooperative buying group is an example of…

a. A factor leading to internal economies of scale
b. A factor leading to external economies of scale
c. Both A and B
d. None of the above

Answer

Answer: b. A factor leading to external economies of scale

QN39: “For a firm to maximize it’s profit, the level of output should reach at following two marginals:”

a. MC=MR; Slope of MR
b. MC>MR; Slope of MR= Slope of MC
c. MC=MR; Slope of MR= Slope of MC
d. MC Slope of MC

Answer

Answer: a. MC=MR; Slope of MR

QN40: Marginal cost (MC) curve intersects the

a. ATC and AFC curves at their minimum points.
b. “ATC, AVC and AFC curves at their minimum points”
c. AVC and AFC curves at their minimum points
d. ATC and AVC curves at their minimum points

Answer

Answer: a. ATC and AFC curves at their minimum points.