MCQ on Managerial Economics 2

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Objective Questions and Answers of MBA: MCQ on Managerial Economics 2

Subject: MCQ on Managerial Economics 2

Part 2: List for questions and answers of Managerial Economics

 

Q1. Given the cost conditions

a) Monopoly output will be higher and prices lower than under pure competition

b) Monopoly output will be lower and price higher than under pure competition

c) Monopoly output and price will be higher than under pure competition

d) Monopoly output and price will be lower than under pure competition

 

Q2. In perfect competition, there is a process of

a) Restricted entry and exit of the firms

b) Free entry and free exit of the firms

c) Free entry but restricted exit of the firms

d) Semi-free exit but absolute free entry

 

Q3. The increasing returns to scale occurs because larger scale provides greater specialisation to various factors’ according to

a) Paul A. Samuelson

b) Alfred Marshall

c) Chamberlain

d) Joan Robinson

 

Q4. The change in TR resulting from the sale of one unit more of output, means

a) AR from a given output

b) MR from a given output

c) MR from a given input

d) MR from MC

 

Q5. Price effect in indifference curve analysis arises

a) When the consumer becomes either better off or worse off because price change is not compensated by income change

b) When the consumer is better off due to a change in income and price

c) When income and price change

d) None of the above

 

Q6. Marginal revenue will be positive if elasticity of demand is

a) Equal to one

b) More than one

c) Less than one

d) Equal to zero 

 

Q7. The degree of monopoly power can be measured by the formula

a) P – MC/P

b) MR/AR – MR

c) AR/AR – MR

d) AR – MR/MR

 

Q8. The supply curve for the short-run competitive firm is the same as

a) Average variable cost curve

b) Marginal cost curve

c) That part of the MC curve which equals or is greater than AVC

d) Average total cost curve

 

Q9. Other things being equal, a decrease in the quantity supplied to the market at given prices leads to

a) A higher price and a contraction of demand

b) A lower price and a contraction of demand

c) A higher price and an expansion of demand

d) A lower price and an expansion of demand

 

Q10. The lowest point of the TC curve is

a) The same as the lowest point of AVC curve

b) The right of the lowest point of the AVC curve

c) The left of the lowest point of the AVC curve

d) None of these

 

Q11. Any straight line supply curve which cuts the X-axis will have

a) An elasticity less than one but not zero

b) Unitary elasticity of supply

c) An elasticity greater than one

d) Zero elasticity of supply

 

Q12. When the law of diminishing returns begins to operate the TVC curve begins to

a) Fall at a decreasing rate

b) Rise at a decreasing rate

c) Fall at an increasing rate

d) Rise at an increasing rate 

 

Q13. MC is given by

a) The slope of the TC curve but not by slope of the TVC curve

b) The slope of the TVC curve but not by slope of the TC curve

c) The slope of the TFC curve

d) Either the slope of the TVC curve or slope of the TC curve

 

Q14. In short-run, a firm would remain in business as long as which one of the following of costs is covered?

a) Fixed costs

b) Total costs

c) Variable costs

d) Constant costs

 

Q15. Under monopoly the supply curve is absent because

a) There is no entry for others

b) The monopolist always makes profit

c) Equilibrium involves MC = MR and MC less than P

d) The monopolist controls the supply

 

Q16. Economists associated with the development of indifference curve analysis are

a) Hicks and Robbins

b) Hicks and Allen

c) Marshall and Hicks

d) Hicks and Walras

 

Q17. When the market supply curve for a commodity is negatively sloped, we have a case of

a) The stable equilibrium

b) Partial equilibrium

c) The general equilibrium

d) None of the above, unless additional information is given

 

Q18. Pure monopoly exists

a) When there is a single producer with close substitutes

b) When there is a single producer without any close substitutes

c) When there is a single producer

d) When a few producers control the industry 

 

Q19. Gossen’s Second law states that

a) The consumers consume only when Px/Py = mum

b) When the income increases the money value or real income will decrease

c) Once a person has spent his entire income he would have maximised his total pleasure from it only if the satisfaction gained from the last item of each commodity bought was the same

d) None of these

 

Q20. A centralised cartel

a) Is illegal in the U.S

b) Behaves as the multiplant monopolist if it wants to minimise the total cost of production

c) Leads to the monopoly situation

d) All of the above

 

Part 2: List for questions and answers of Managerial Economics

 

Q1. Answer:b

Q2. Answer:b

Q3. Answer:c

Q4. Answer:b

Q5. Answer:a

Q6. Answer:b

Q7. Answer:a

Q8. Answer:c

Q9. Answer:a

Q10. Answer:b

Q11. Answer:a

Q12. Answer:d

Q13. Answer:b

Q14. Answer:d

Q15. Answer:c

Q16. Answer:c

Q17. Answer:d

Q18. Answer:b

Q19. Answer:c

Q20. Answer:d