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Economics M.C.Q (1 Marks)

Model Paper 4 · CBSE STD 11 Commerce (CBSE - English Medium). 10 questions.

Questions

M.C.Q (1 Marks)

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10 questions · auto-graded multiple-choice test.

MCQ 11 Mark
The qty to be sold by a firm under perfect competition is also fixed by the market
  • A
    Ture
  • B
    Can’t say
  • C
    May be
  • ✓
    False
Answer
Correct option: D.
False
(d) False
Explanation: The firm is free to sell any qty under perfect competition.
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MCQ 21 Mark
Which of the following is an example of implicit cost? (Choose the correct alternative)
  • A
    Wages paid
  • B
    Cost of Raw material
  • C
    None of these
  • ✓
    Interest on owner’s capital
Answer
Correct option: D.
Interest on owner’s capital
(d) Interest on owner’s capital
Explanation: Interest on owner’s capital
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MCQ 31 Mark
AR is more elastic in monopolistic competition than in monopoly as
  • A
    Many close substitutes do not exist in monopolistic competition
  • B
    Many close substitutes do not exist in monopoly competition
  • ✓
    Many close substitutes exist in monopolistic competition
  • D
    Many close substitutes exist in monopoly competition
Answer
Correct option: C.
Many close substitutes exist in monopolistic competition
(c) Many close substitutes exist in monopolistic competition
Explanation: In monopoly, there is a single seller and no close substitutes are available for the product. So the customer cannot shift to any other product(as there are no substitutes) if the monopolist increases the price of the product. In such a case the demand is less elastic or inelastic. Whereas in monopolistic competition, there are large number of sellers and substitutes are available, so the customer will shift to substitute product if there is a increase in price. As such in this situation the demand is more elastic.
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MCQ 41 Mark
The break- even point where TR=TC, the firm cannot earn abnormal profits
  • A
    Can’t say
  • B
    False
  • ✓
    True
  • D
    May be
Answer
Correct option: C.
True
(c) True
Explanation: The firm can earn abnormal profits only when TR > TC
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MCQ 51 Mark
Assertion (A): Goods whose demand is higher offer high prices and low profits to the producers.
Reason (R): The producers will produce those goods which are more in demand and less in supply.
  • 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
  • C
    A is true but R is false.
  • ✓
    A is false but R is true.
Answer
Correct option: D.
A is false but R is true.
(d) A is false but R is true.
Explanation: Goods whose demand is higher offer high prices and high profits to the producers. The producers will produce those goods which are more in demand and less in supply.
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MCQ 61 Mark
Explain the relationship TC, TFC & TVC.
  • A
    $\frac{T V C}{T F C}= TC$
  • B
    $TVC \times TFC = TC$
  • C
    TVC - TFC = TC
  • ✓
    TVC + TFC = TC
Answer
Correct option: D.
TVC + TFC = TC
(d) TVC + TFC = TC
Explanation: TC is the sum of total fixed cost and total variable cost at various levels of output. Since TFC remains same at all levels of output , the change in TC is entirely due to TVC. Therefore the vertical distance between TC and TFC curve is equal to TVC.
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MCQ 71 Mark
AR curve is more elastic under monopolistic competition than under monopoly due to:
  • ✓
    availability of close substitutes
  • B
    high degree of government control
  • C
    low degree of government control
  • D
    lack of close substitutes
Answer
Correct option: A.
availability of close substitutes
(a) availability of close substitutes
Explanation: Demand for goods which have close substitute is relatively more elastic. When the price of such good rises, the consumers have the option of shifting to its substitute.
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MCQ 81 Mark
_________refers to the minimum price, fixed by the government, which is above the equilibrium price.
  • A
    Price floor
  • ✓
    Both price floor and minimum support price
  • C
    price ceiling
  • D
    Minimum support price
Answer
Correct option: B.
Both price floor and minimum support price
(b) Both price floor and minimum support price
Explanation: Price floors are sometimes called “price supports,” because they support a (minimum) price by preventing it from falling below a certain level. The price is set above the equilibrium price for the benefit of the suppliers or the producers.
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MCQ 91 Mark
If MOC increases, the shape of PPC will be
  • ✓
    Concave
  • B
    Inverted
  • C
    Straight
  • D
    Convex
Answer
Correct option: A.
Concave
(a) Concave
Explanation: MOC refers to the number of units of a commodity sacrificed to gain one additional unit of another commodity. In case of PPF, MOC is always increasing, i.e. more and more units of a commodity have to be sacrificed to gain an additional unit of another commodity.PPF is concave shaped because of increasing marginal opportunity costs, i.e. more and more units of one commodity are sacrificed to gain an additional unit of another commodity.
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MCQ 101 Mark
Subsidy on the production of a commodity causes:
  • ✓
    increase in supply
  • B
    no change in supply
  • C
    decrease in supply
  • D
    Contraction of supply
Answer
Correct option: A.
increase in supply
(a) increase in supply
Explanation: The subsidy is offered to the producers to increase the production of the commodity when it is economically not viable for the producers to do so at the existing market price. When the subsidy is offered, the supply curve of the commodity shifts to the right.
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