Economics Based Questions Set 1

Economics Based Questions Set 1

Economics based questions are very important in competitive exams with many questions coming from this section. We are here with a few series of questions on economics based questions

Economics Based Questions Set 1

1. Demand curve of a firm under perfect competition is—
(A) Perfectly Inelastic
(B) Perfectly Elastic
(C) More Elastic
(D) Less Elastic
Ans : (B)

2. Which of the following equation is correct for perfect competition ?
(A) AR = MR = Price
MR >(B) AR
MR <(C) AR
MR >(D) Price
Ans : (A)

3. Which equation is correct under normal profit ?
(A) AR = AC
AC >(B) AR
AC <(C) AR
(D) AR = AC = 0
Ans : (A)

4. The object of every producing firm is—
(A) To maximise production
(B) To minimise cost
(C) To maximise profit
(D) None of the above
Ans : (C)

5. Who determines price under perfect competition ?
(A) Representative firm
(B) Industry
(C) Normal firm
(D) Government
Ans : (B)

6. Marshall’s representative firm is a long-run average firm while optimum firm is a—
(A) Maximum cost firm
(B) Minimum cost firm
(C) Marginal cost firm
(D) Average cost firm
Ans : (B)

7. In perfect competition average revenue curve is—
(A) Parallel to x-axis
(B) Parallel to y-axis
(C) Slopes down from left to right
(D) Slopes upward from left to right
Ans : (A)

8. In the long-run, perfect competitive firm gets—
(A) Only normal profit
(B) Abnormal profit
(C) Loss
(D) Any of the above
Ans : (A)

9. What minimum price is acceptable by a firm in the short-period ?
(A) Equal to AC
(B) Equal to AVC
(C) Equal to AFC
(D) Equal to TC
Ans : (B)

10. Selling cost is a must in—
(A) Pure monopoly
(B) Perfect competition
(C) Imperfect competition
(D) All of the above
Ans : (C)