MCQ Economics Class 12 Chapter 4 The Theory of Firm Under Perfect Competition Microeconomics Advertisement MCQ’s For All Chapters – Microeconomics Class 12th 1. The concept of supply curve is relevant only for?MonopolyMonopolistic competitionPerfect competitionOligopolyQuestion 1 of 152. In perfect competition, a firm earns profit when __________ exceeds the _____________?Total revenue, total fixed costMarginal cost, marginal revenueAverage revenue, average cost"Total cost, total revenueQuestion 2 of 153. Firms face competition when the good they produceis in a market with natural barriers to entry.is unique.is in a market with legal barriers to entry.has a close substitute.Question 3 of 154. All of the following are examples of product differentiation in monopolistic competition EXCEPTnew and improved packaging.lower price.acceptance of more credit cards than the competition.location of the retail store.Question 4 of 155. Perfect competition is an industry witha few firms producing identical goods.many firms producing goods that differ somewhat.a few firms producing goods that differ somewhat in quality.many firms producing identical goods.Question 5 of 156. Firms use marketing toinfluence a consumer's buying decision.convince customers that their product is worth its price.persuade buyers that their product is superior to others.All of the above answers are correct.Question 6 of 157. In perfect competition, the elasticity of demand for the product of a single firm isinfinite, because many other firms produce identical products.zero, because many other firms produce identical products.zero, because the firm produces a unique product.infinite, because the firm produces a unique product.Question 7 of 158. Price of a goods is determined at a point where :Demand > SupplyDemand < SupplyDemand = SupplyNone of theseQuestion 8 of 159. Total economic profit istotal revenue minus total opportunity cost.marginal revenue minus marginal cost.total revenue divided by total cost.marginal revenue divided by marginal cost.Question 9 of 1510. If you have found the percentage of the value of sales accounted for by the four largest firms in an industry, you have found theelasticity of supply value.Herfindahl-Hirschman Index.elasticity of demand value.four-firm concentration ratio.Question 10 of 1511. In the above table, the firmmust be in a perfectly competitive industry, because its marginal revenue is constant.cannot be in a perfectly competitive industry, because its short-run economic profits are greater than zero.cannot be in a perfectly competitive industry, because its long-run economic profits are greater than zero.must be in a perfectly competitive industry, because its marginal cost curve eventually risesQuestion 11 of 1512. The above figure illustrates a firm's total revenue and total cost curves. Which one of the following statements is FALSE?At output Q1 the firm makes zero economic profit.At an output above Q3 the firm incurs an economic loss.Economic profit is the vertical distance between the total revenue curve and the total cost curve.At output Q2 the firm incurs an economic loss.Question 12 of 1513. Which of the following is the best example of a natural monopoly?owning the only licensed taxicab in townthe United States Postal Serviceownership of the only ferry across Puget Sound for twenty milesthe cable television company in your hometownQuestion 13 of 1514. Which of the following is NOT correct about patents?Patents stimulate innovation.A patent is a barrier to entry.Patents enable a firm to be a permanent monopoly.Patents encourage invention of new products.Question 14 of 1515. For a firm in perfect competition, a diagram shows quantity on the horizontal axis and both the firm's marginal cost (Mc) and its marginal revenue (MR) on the vertical axis. The firm's profit-maximizing quantity occurs at the point where theMC curve intersects the MR curve from above, going from left to right.slope of the MC curve is zero.MC curve intersects the MR curve from below, going from left to right.MC and MR curves are parallel.Question 15 of 15 Loading...
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