Economics Test Questions

1. Which commodity can be called as Giffen commodity ?
(A) Inferior commodity
(B) Superior commodity
(C) Any of above
(D) None of the above
Ans : (A)

2. The price of a commodity is determined where—
(A) Demand supply
(B) Demand supply
(C) Demand = supply
(D) None of the above
Ans : (C)

3. In perfect competition, the demand for a commodity is—
(A) Elastic
(B) Perfectly elastic
(C) Inelastic
(D) Perfectly inelastic
Ans : (B)


4. Which condition is not found in perfect competition ?
(A) Many buyers and sellers
(B) Perfect knowledge about market conditions
(C) Product differentiation
(D) Perfect factor-mobility
Ans : (C)

5. In which market, a firm cannot determine price ?
(A) Perfect competition
(B) Monopoly
(C) Monopolistic competition
(D) Oligopoly
Ans : (A)

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

7. Which of the following equation is correct for perfect competition ?
(A) AR = MR = Price
(B) AR MR
(C) AR MR
(D) Price MR
Ans : (A)

8. Which equation is correct under normal profit ?
(A) AR = AC
(B) AR AC
(C) AR AC
(D) AR = AC = 0
Ans : (A)

9. 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)

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

11. 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)

12. 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)

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

14. 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)

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

16. Which category of land is rent less land ?
(A) First category of land
(B) Second category of land
(C) Third category of land
(D) Marginal land
Ans : (D)

17. Opportunity cast of a factor is known as—
(A) Transfer earning
(B) Money cost
(C) Present earning
(D) None of the above
Ans : (A)

18. Quasi Rent is—
(A) Equal to firm's total profit
(B) More than firm's total profit
(C) Less than firm's total profit
(D) None of the above
Ans : (D)

19. Which of the following can not be accepted factor of production ?
(A) Land
(B) Labour
(C) Light of sun
(D) Capital
Ans : (C)

20. Land is the only factor of production whose supply is ?
(A) More Elastic
(B) Perfectly Elastic
(C) Perfectly Inelastic
(D) Unitary Elastic
Ans : (C)