Q1. In which form of the market structure is the degree of control over the price of its product by a firm very large?
(a) Monopoly
(b) Imperfect Competition
(c) Oligopoly
(d) Perfect competition
Q2. Average revenue curve is also known as:
(a) Profit Curve
(b) Demand Curve
(c) Average Cost Curve
(d) Indifference Curve
Q3. Disguised unemployment in India exists in
(a) Transport sector
(b) Agricultural sector
(c) Banking
(d) Service sector
Q4. Intensive Agriculture District Programme (IADP) was started in
(a) 1959-60
(b) 1960-61
(c) 1961-62
(d) 1962-63
Q5. Suppose that the demand curve for the ABC Co. slopes downward and to the right. We can conclude that
(a) the firm operates in a perfectly competitive market.
(b) the firm can sell all that it wants to at the established market price.
(c) the XYZ Co. is not a price taker in the market because it must lower price to sell additional units of output.
(d) the XYZ Co. will not be able to maximize profits because price and revenue are subject to change.
Q6. If firms in the shoes industry have the following market shares, which market structure would best describe the industry?
Market share (% of market)
Adidas 18.7
Puma 14.3
Rebook 11.6
sparx 9.4
bata 8.8
nike 7.4
Others 29.8
(a) Perfect competition
(b) Monopolistic competition
(c) Oligopoly
(d) Monopoly
Q7. Which sector is the backbone of Indian economy?
(a) Service Sector
(b) Financial Sector
(c) Tourism Sector
(d) Agriculture Sector
Q8. The kinked demand curve model of oligopoly assumes that
(a) the response to a price increase is less than the response to a price decrease.
(b) the response to a price increase is more than the response to a price decrease.
(c) the elasticity of demand is constant regardless of whether price increases or decreases.
(d) the elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases.
Q9. In terms of economics, the total value of the output (goods and services) produced and income received in a year by a domestic resident of a country put together is called
(a) Net National Product
(b) Gross National Product
(c) Gross National Income
(d) National income
Q10. A firm encounters its “shutdown point” when:
(a) average total cost equals price at the profit-maximising level of output.
(b) average variable cost equals price at the profit-maximising level of output.
(c) average fixed cost equals price at the profit-maximising level of output.
(d) marginal cost equals price at the profit-maximising level of output.
Q11. Suppose that, at the profit-maximizing level of output, a firm finds that market price is less than average total cost, but greater than average variable cost. Which of the following statements is correct?
(a) The firm should shutdown in order to minimize its losses.
(b) The firm should raise its price enough to cover its losses.
(c) The firm should move its resources to another industry.
(d) The firm should continue to operate in the short run in order to minimize its losses
Q12. Which of the following is definitely a major indication of the state of the economy of a country?
(a) Rate of GDP growth
(b) Rate of inflation
(c) Number of banks in a country
(d) None of these
Q13. When price is less than average variable cost at the profit-maximising level of output, a firm should:
(a) produce where marginal revenue equals marginal cost if it is operating in the short run.
(b) produce where marginal revenue equals marginal cost if it is operating is the long run.
(c) shutdown, since it will lose nothing in that case.
(d) shutdown, since it cannot even cover its variable costs if it stays in business.
Q14. In which year ‘Bombay plan’ was launched by some industrialists?
(a) 1942
(b) 1943
(c) 1944
(d) 1945
Q15. The Economic Planning Committee was established in the chairmanship of
(a) J.L. Nehru
(b) Dr. Rajendra Prasad
(c) Ramkrishna Mudaliyar
(d) K.C. Niyogi
Solutions
1.A
2.B
3.B
4.B
5.C
6.C
7.A
8.A
9.B
10.B
11.D
12.A
13.D
14.C
15.A
