Economics Practice MCQ Page 19
Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 1552 In a pure monopoly,then firm may make a long -run profit because
- monopoly firms are more efficient than competitive ones.
- barriers prevent new firms from entering the market.
- a monopoly can buy input more cheaply .
- it will operate at minimum average cost.
- its demand curve is highly elastic.
Question: 1554 The supply curve of a pure monopoly is
- its marginal cost curve above average variable cost.
- its marginal cost curve above marginal revenue.
- its marginal cost curve above average total cost.
- its marginal cost curve above average revenue.
Question: 1557 When it maximizes profit,the monopoly firm in Figure 4 charges a price of
- indeterminate marginal based on Figure 4.
Question: 1558 The maximum profit or minimum loss that the monopoly firm in Figure 4 can earn is
- a loss of $24,000.
- zero profit.
- a profit of $1,000.
- a profit of 6,000.
- indeterminate based on Figure4.
Question: 1559 At its profit-maximizing level of output ,demand for the product of the monopoly firm in Figure 4 is
- perfectly elastic
- elastic .
- unitary elastic.
- perfectly inelastic.
Question: 1561 Monopolistic competition is
- like perfect competition except the product is differentiated.
- like pure monopoly except the product is differentiated.
- like perfect competition except there are few sellers.
- like pure monopoly except there are two sellers.
- like perfect competition except information is imperfect.
Question: 1562 A monopolistically competition firm is a
- price taker who can make profits only in the short run.
- price taker who can make profits in the long run .
- price searcher who can make profits only in the short run.
- price searcher who can make profits in the long run .
- price searcher who cannot make profits in the short run .
Question: 1563 The short-run profit -maximization problem of a monopolistic competitor is
- similar to that of a perfectly competitive firm.
- similar to its long-run profit-maximization problem.
- similar to that of a pure monopolist.
- unlike either that of the perfectly competitive firm or the pure monopolist.
- uninteresting because it cannot earn a profit.
Question: 1564 If firm monopolistically competitive industry are making large short-run profits then in the long run,
- no entry into the industry is possible,so profits will persist.
- new firms will enter the industry ,driving up the costs of existing firms to eliminate profits.
- profits will be lower but positive due to product differentiation
- entry of new firms will drive down the demand curves of existing firms to eliminate profits.
- each firm will expand its output,reducing profits.
Question: 1565 Long -run equilibrum under monopolistic competition
- is identical to pure monopoly .
- is identical to perfect competition.
- implies that firms are producing at minimum average cost.
- implies that firms produce less output than the minimum-average -cost level.
- implies that firms produce more output than the minimum-average-cost levels.
Question: 1566 Which of the following is not an example of nonprice competition?
- Lobbying for stricter licensing laws.
- Offering a reduced scale price.
- Repackaging the produce as "new and improved."
- Offering longer warranties on a product.
Question: 1568 Which of the following is consistent with economic efficiency?
- Everyone can be made better off by real-locating resources.
- The marginal cost of a good is large than its price.
- Some goods are produced by profit-maximizing monopolies.
- The marginal utility of the last dollar spent is equal for any good on which it could be spent.
- Price exceeds marginal cost for some goods.
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