Have you micro economics mcq subject in your academic course exam? If yes, you can prepare Micro economics mcq with answer set 4. After all set of mcq, must give online exam quiz and assess your knowledge.
MCQ of Micro economics set 4
Q1. Which of the following is one of the major causes of economic problems?
a. One of the major causes of economic problems is unlimited human wants
b. One of the major causes of economic problems is the alternative usage of resources
c. One of the major causes of economic problems is the scarcity of economic resources
d. All of the above
Answer
d. All of the above
Q2. Which of the following statements about the production possibility curve is accurate?
a. The main reason for the rightward shift of the production possibility curve is war
b. The main reason for the rightward shift of the production possibility curve is migration
c. The main reason for the rightward shift of the production possibility curve is skill development programmes
d. The main reason for the rightward shift of the production possibility curve is natural disasters
Answer
c. The main reason for the rightward shift of the production possibility curve is skill development programmes
Q3. Which of the following statements about the production possibility frontier is accurate?
a. The production possibility frontier can be a straight line when there is a decrease in the production of both goods
b. The production possibility frontier can be a straight line when more amount of both the goods can be produced
c. The production possibility frontier can be a straight line when all the resources are equally efficient for the production of both the goods
d. None of the above
Answer
c. The production possibility frontier can be a straight line when all the resources are equally efficient for the production of both the goods
Q4. Which of the following statements about the marginal cost is true?
a. When there is an increase in the marginal cost, the production possibility curve is concave to the origin
b. When there is an increase in the marginal cost, the production possibility curve is convex to the origin
c. When there is an increase in the marginal cost, the production possibility curve is similar to the origin
d. None of the above
Answer
a. When there is an increase in the marginal cost, the production possibility curve is concave to the origin
Q5. Which of the following statements about the economy is correct?
a. An economy is a system that helps in the production of goods and also enables people to earn a living
b. An economy is a system that helps in the production of services and also enables people to earn a living
c. Both a and b are correct
d. Both a and b are incorrect
Answer
c. Both a and b are correct
Q6. Which of the following statements reflect the correct situation related to the allocation of the resources?
a. Allocation of the resources comes under the causes of economic problems
b. Allocation of the resources comes under the causes of opportunity cost
c. Allocation of the resources comes under the causes of central problems
d. Allocation of the resources comes under the causes of marginal demand
Answer
c. Allocation of the resources comes under the causes of central problems
Q7. Which of the following conclusions is true about the statement ‘Rich people should be taxed more’?
a. The statement ‘rich people should be taxed more is an example of positive economic analysis
b. The statement ‘rich people should be taxed more is an example of productive economic analysis
c. The statement ‘rich people should be taxed more is an example of normative economic analysis
d. The statement ‘rich people should be taxed more is an example of negative economic analysis
Answer
c. The statement ‘rich people should be taxed more is an example of normative economic analysis
Q8. Which of the following statements reflects the actual relationship between the marginal opportunity cost and production possibility frontier?
a. When the marginal opportunity cost remains constant, the production possibility frontier is a downward sloping straight line
b. When the marginal opportunity cost remains constant, the production possibility frontier is an upward sloping straight line
c. When the marginal opportunity cost remains constant, the production possibility frontier is a central sloping straight line
d. There is no relation between the marginal opportunity cost and the production possibility frontier
Answer
a. When the marginal opportunity cost remains constant, the production possibility frontier is a downward sloping straight line
Q9. Which of the following statements is the actual meaning of scarcity?
a. The actual meaning of scarcity is that there is an increase in the resources
b. The actual meaning of scarcity is that there is a shortage in the resources
c. The actual meaning of scarcity is that there is no change in the resources
d. None of the above
Answer
b. The actual meaning of scarcity is that there is a shortage in the resources
Q10. Which of the following statements about the production possibility curve is true?
a. If a point falls inside the production possibility curve, it indicates that the resources are over utilised
b. If a point falls inside the production possibility curve, it indicates that the resources are underutilised
c. If a point falls inside the production possibility curve, it indicates that there is adequate employment in the economy
d. If a point falls inside the production possibility curve, it indicates that there is inadequate employment in the economy
Answer
b. If a point falls inside the production possibility curve, it indicates that the resources are underutilised
Q11. Which of the following is a sign of a free economy?
a. The prices are regulated
b. The prices are partly regulated
c. The prices are determined with the help of the forces of demand and supply
d. None of these
Answer
c. The prices are determined with the help of the forces of demand and supply
Q12. Which of the following is a part of microeconomics?
a. Factor pricing
b. National income
c. Both a and b are correct
d. Both a and b are incorrect
Answer
a. Factor pricing
Q13. Which of the following is true, according to Robbins?
a. Means are undefined
b. Means are scarce
c. Means are unlimited
d. All of the above
Answer
b. Means are scarce
Q14. In which economy do consumers and producers make choices based on market forces of supply and demand?
a. Market economy
b. Open economy
c. Controlled economy
d. Command economy
Answer
a. Market economy
Q15. The branch of economics that deals with the allocation of resources is ______.
a. Econometrics
b. Macroeconomics
c. Microeconomics
d. None of the above
Answer
c. Microeconomics
Q16. Given the same cost and revenue schedules, a profit-maximizing monopolist will produce:
(a) less output than a competitive industry
(b) more output than a competitive industry
(c) the same amount of output as a competitive industry
(d) none of above.
Answer
(a) less output than a competitive industry
Q17. The quantity supplied by a profit maximizing monopolist is:
(a) equal to quantity demanded at competitive market price
(b) insufficient to supply the quantity demanded at monopoly price
(c) equal to quantity demanded when price equals marginal cost
(d) insufficient to satisfy the quantity demanded at the competitive market price
Answer
(d) insufficient to satisfy the quantity demanded at the competitive market price
Q18. Which of the following is not true of a profit maximizing monopoly firm in equilibrium?
(a) total profit is maximum for the firm
(b) there is less output than under competitive conditions
(c) average costs are minimum at the equilibrium rate of output
(d) the price is higher than under competitive conditions.
Answer
(a) total profit is maximum for the firm
Q19. In the long run equilibrium output of the individual firm is —– than optimum output.
a. less
b. more
c. None of these
Answer
a. less
Q20. The assumed demand curve is —– than the actual demand curve.
a. More
b. less
c. None of these
Answer
a. More
Q21. Sweezy’s model is based on the —– list approach,
a. Marginal
b. economic
c. None of these
Answer
a. Marginal
Q22. An oligopolistic firm is guided in its decisions by the —– demand curve.
a. Imagined
b. fact
c. None of these
Answer
a. Imagined
Q23. Under oligopoly, a firm expects that when it raises its price, it is most likely that rival firms will also —– the price.
a. raise
b. decrease
c. None of these
Answer
a. raise
Q24. For an oligopolistic firm, the demand curve is highly —– and gradually falling for prices above the current or existing price,
a. elastic
b. competitive
c. Both A and B
Answer
a. elastic
Q25. Sweezy’s kinked demand curve model explains the rigidity or stickiness in oligopolistic prices in the face of short-term increases or decreases in —– input costs.
a. Variable
b. fixed
c. None of these
Answer
a. Variable
Q26. The Hall and Hitch model of the Kinked demand curve is based on an empirical survey of a sample of 38 well managed firms in —–
a. USA
b. England
c. Both A and B
Answer
b. England
Q27. —– duopoly model model assumes that his rival firm will keep its price constant irrespective of his own decision about pricing.
a. Bertrand’s
b. empirical’s
c. None of these
Answer
a. Bertrand’s
Q28. In —– strategy, prices are high in early stages to recover costs as soon as possible.
a. Penetration
b. Market Skimming
c. Both A and B
Answer
b. Market Skimming
Q29. Under —– method, price is set up to cover manufacturing costs plus a predecided amount of profits.
a. Full cost pricing
b. Low cost pricing
c. None of these
Answer
a. Full cost pricing
Q30. In telecom sector, the companies often follow the —– pricing.
a. fixed rate
b. Going rate
c. Both A and B
Answer
b. Going rate
Q31. Some products are abruptly priced at 9.99 or 99.99. It is known as —– pricing.
a. Psychological
b. fair
c. None of these
Answer
a. Psychological
Q32. A consumer purchases more of a good if the price goes down and vice versa. This is known as—–
a. MRS
b. Law of Demand
c. Both A and B
Answer
b. Law of Demand
Q33. When price of tea goes up, then the demand for coffee is likely to go up as well.
a. True
b. False
Answer
a. True
Q34. When the price of X brand of soap went up, people began buying Z brand of soap. This happened due to the substitution effect.
a. True
b. False
Answer
a. True
Q35. Supply is a positive function of price.
a. True
b. False
Answer
a. True
Q36. A supply schedule is a table that represents the various amounts of goods available for supply at various prices.
a. True
b. False
Answer
a. True
Q37. If we go by the Law of Demand, the price elasticity for most goods would be negative.
a. True
b. False
Answer
a. True
Q38. The price elasticity of a straight line demand curve varies from zero to infinity.
a. True
b. False
Answer
a. True
Q39. When the income elasticity is negative, the good is an inferior good.
a. True
b. False
Answer
a. True
Q40. The total utility reaches a maximum value when marginal utility approaches zero.
a. True
b. False
Answer
a. True
Other Micro Economics Exam MCQ set
- Micro economics mcq with answer set 1
- Micro economics mcq with answer set 2
- Micro economics mcq with answer set 3
- Micro economics mcq with answer set 4
- Micro economics mcq with answer set 5
