Deck 12: Economics and Market Structures

Question 1

Above the BP curve BoP is:

A)surplus
B)Deficit
C)Either Surplus or Deficit
D)None.

Answer 1

surplus

Question 2

When there is Zero or No capital mobility the BP curve is:

A)Negative
B)positive
C)Vertical
D)Horizontal

Answer 2

Vertical

Question 3

When there is High capital mobility the BP curve is:

A)Negative
B)positive
C)Vertical
D)Horizontal

Answer 3

Horizontal

Question 4

Which policy is recommended under flexible exchange rate system:

A)No policy is needed
B)Contractionary policy
C)expansionary monetary policy
D)Any policy.

Question 5

Khan's multiplier is known as:

A)investment multiplier
B)employment multiplier
C)Foreign trade multiplier
D)Saving multiplier

Question 6

Keynes's multiplier is known as:

A)investment multiplier
B)employment multiplier
C)Foreign trade multiplier
D)Saving multiplier

Question 7

The foreign trade multiplier also known as the:

A)Acceleration
B)employment multiplier
C)Income multiplier
D)export multiplier .

Question 8

Investment Multiplier explains measures the change income as result of change in:

A)Saving
B)Wealth
C)Employment
D)Investment.

Question 9

Under perfectly competitive market an individual seller is a

A)Price taker
B)Price maker
C)Individual seller can influence the price
D)None of the above

Question 10

Uniform price is a feature of

A)Perfect competition
B)Monopoly
C)Monopolistic competition
D)Oligopoly

Question 11

Which of the following is not a feature of a perfectly competitive market

A)Large number of buyers and sellers
B)Homogeneous product
C)Group behaviour
D)Perfect competition

Question 12

A perfectly competitive firm gets only normal profit when

A)MC = MR
B)AC = AR
C)AC < AR
D)MC = AR

Question 13

Which one of the following is a feature of a perfect competition

A)Group behavior
B)Selling cost
C)Homogeneous product
D)Differentiated product

Question 14

Average revenue curve under perfect competition is

A)Upward sloping
B)Downward sloping
C)Horizontal straight line
D)Vertical straight line

Question 15

Marginal revenue curve under perfect competition is

A)Upward sloping
B)Downward sloping
C)Horizontal straight line
D)Vertical straight line

Question 16

Average revenue curve under imperfect competition is

A)Upward sloping
B)Downward sloping
C)Horizontal straight line
D)Vertical straight line

Question 17

Marginal revenue curve under imperfect competition is

A)Upward sloping
B)Downward sloping
C)Horizontal straight line
D)Vertical straight line

Question 18

Perfect competition prevails when the demand for the output of each producer is

A)Elastic
B)Perfectly elastic
C)Inelastic
D)Perfectly inelastic

Question 19

Equilibrium price is determined under perfect competition by

A)The market demand
B)The market supply
C)The interaction between market demand and market supply
D)None of the above

Question 20

In the market period, market supply curve is

A)Perfectly elastic
B)Perfectly inelastic
C)Elastic
D)Inelastic

Question 21

Given the supply of a commodity, in the market period, the price of a commodity is determined 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

Question 22

Total profits are maximized where

A)TR equals TC
B)TR curve and TC curve are parallel
C)TR curve and TC curves are parallel and TC exceeds TR
D)TR curve and TC curves are parallel and TR exceeds TC

Question 23

The equality between MC and MR is

A)A necessary condition for equilibrium of the firm under perfect condition
B)A sufficient condition for equilibrium of the firm under perfect competition
C)A necessary but not sufficient condition for equilibrium of the firm under perfect condition
D)A necessary and sufficient condition for equilibrium of the firm under perfect condition

Question 24

In the short-run, a competitive firm can earn

A)Normal profit
B)Super normal profit
C)Loss
D)Either A or B or C depending

Question 25

If price is equal to average cost, in the short-run, the competitive firm can earn

A)Only normal profit
B)Super normal profit
C)Loss
D)All of the above