M.C.Q (1 Marks)

MCQ 11 Mark

In perfect competition, when the marginal revenue and marginal cost are equal, profit is:

A
Negative
B
Average
C
Zero
✓
Maximum

Answer

Correct option: D.

Maximum

(d) Maximum
Explanation: In perfect competition, when the marginal revenue and marginal cost are equal, profit is maximum.

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MCQ 21 Mark

Implicit costs are

A
Same as explicit costs
B
Total cost
C
Opportunity costs
✓
Imputed costs

Answer

Correct option: D.

Imputed costs

(d) Imputed costs
Explanation: It is the cost of self supplied factors.

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MCQ 31 Mark

The relationship between AR and MR when price is constant is

A
$AR > MR$
B
The values increase
C
The values decrease
✓
The values are same

Answer

Correct option: D.

The values are same

(d) The values are same
Explanation: When price is constant then AR will also be equal to price as AR = TR/Qty. Marginal revenue is addition in revenue with sale of every additional unit. If price is constant, then each additional unit will yield revenue equal to the price. So, in perfect competition AR=MR.

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MCQ 41 Mark

Under perfect competition, the firm earns normal profit in the long run because of:

✓
fee entry and exit
B
large number of buyers and sellers
C
absence of selling cost
D
homogeneous commodity

Answer

Correct option: A.

fee entry and exit

(a) fee entry and exit
Explanation: Entry into the market as well as exit from the market is free for firms under perfect competition. It ensures their normal profit in the long run.

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MCQ 51 Mark

Assertion (A): There is a negative relationship between income and the demand of an individual.
Reason (R): Inferior goods are the goods the demand for which increases as the income of the buyer rises.

A
Both A and R are true and R is the correct explanation of A.
B
Both A and R are true but R is not the correct explanation of A.
✓
A is true but R is false.
D
A is false but R is true.

Answer

Correct option: C.

A is true but R is false.

(c) A is true but R is false.
Explanation: There is a negative relationship between income and the demand of an individual because inferior goods are the goods the demand for which decreases as the income of the buyer rises.

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MCQ 61 Mark

The relationship between AC & MC is

A
AC continues to fall till MC is greater than AC
✓
AC continues to fall till MC is less than AC
C
AC continues to rise till MC is less than AC
D
AC continues to fall till MC is equal to AC

Answer

Correct option: B.

AC continues to fall till MC is less than AC

(b) AC continues to fall till MC is less than AC
Explanation:
When $MC < AC , AC$ falls
When $MC = AC , AC$ is constant and at ita minimum point
When $MC > AC , AC$ rises

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MCQ 71 Mark

The relationships between TR and MR when price fall is

A
TR falls but MR rises
B
TR rises but MR falls
C
Both rise in sales
✓
TR rises and then fall but MR falls with sales

Answer

Correct option: D.

TR rises and then fall but MR falls with sales

(d) TR rises and then fall but MR falls with sales
Explanation: When more output is sold by lowering the price, then MR will fall. Till the point MR is positive, TR will rise and when MR becomes negative, TR starts falling. TR is at its maximum when MR is zero.

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MCQ 81 Mark

The steeper is the negatively sloped demand curve, the further below is the marginal revenue curve.

✓
true
B
May be
C
Can’t say
D
false

Answer

Correct option: A.

true

(a) True
Explanation: True

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MCQ 91 Mark

The problem of 'How to produce’ is making a choice between

A
None of these
B
Capital Intensive methods
C
Labour intensive methods
✓
Both of these

Answer

Correct option: D.

Both of these

(d) Both of these
Explanation: Technology means the correct proportion in which the different factors of production are to be employed. There are two types of techniques. A labour-intensive technique would employ relatively more labour and less capital. On the other hand, capital- intensive technique means more capital and less labour.The context of how to produce is ‘which techniques are to be adopted’?

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MCQ 101 Mark

In the case of contraction of supply, we move:

✓
from upper point to lower point
B
to left on the another supply curve
C
to right on the another supply curve
D
from lower point to upper point

Answer

Correct option: A.

from upper point to lower point

(a) from upper point to lower point
Explanation: Movement from a higher point to a lower point on the same supply curve is known as a contraction of supply.

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Economics M.C.Q (1 Marks)

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