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WorksheetsMix Economics chapter 4
Total questions: 62
Worksheet time: 31mins
In monopoly the product is
Substantially different than other products
Similar to other products but not identical
Identical to other product
In monopolistic competition the product is
Substantially different than other products
Similar to other products but not identical
Identical to other product
In perfect competition the product is
Substantially different than other products
Similar to other products but not identical
Identical to other product
In perfect competition if a producer tries to charge higher price than its competition, he shall
Lose some of his customer
Lose all his customers
Lose very few customers
Won’t lose any customer
In monopolistic competition if a producer tries to charge higher price than its competitor, he shall
Lose some of his customer
Lose all his customers
Lose very few customers
Won’t lose any customer
In monopoly market if a producer tries to charge higher price than its existing price
Lose some of his customer
Lose all his customers
Lose very few customers
Won’t lose any customer
In an oligopoly market
Large number of producers exist
Very few producers exist
only one producer is there
The market form in which competition is on the basis of price as the product are identical
Monopoly
Monopolistic competition
Perfect competition
oligopoly
If a firm which is in the perfect competitive industry and this firm is earning good profits in the short run, then what is most likely to be the case in the long run
The firm would continue to do so in the long run as well
New firms would start producing same products and this will lead to higher supply of that commodity which will finally cause fall in price
If a firm is operating in the monopoly type of market, and it is making huge profits in the short run, then what will happen in the long run
new firms would enter the industry and would produce same products thereby causing higher supply of that commodity and lower prices
New firms cannot enter the industry as there will be entry barriers and hence the firm would continue to make profits in the long run as well
The concept of normal profit in economics means the owner is getting
Zero profit or zero income out of business
Huge profits from business
Income equivalent to the income which he could have earned otherwise also by doing some other work
In which of the following market type, new firms can enter the market easily without any restrictions
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
A monopolist has control over
Price
Quantity sold
Either price or quantity sold
Both price and quantity sold
Indian railway has monopoly business when it come to long journey, it’s Aurangabad - Mumbai sleeper class fair is Rs.300. If it decides to make this fare Rs.1,500. What is most likely to happen
Since it’s monopoly it won’t face any reduction in bookings
even though it’s monopoly, some of the travellers might choose other options such as private luxury bus or even state transport buses
A market form where there is only one seller and only one buyer is known as
Duopoly
Bilateral monopoly
Monopsony
Oligopsony
There are 15 soya-bean plants in Maharashtra all whom together buy whole of the soya bean produced in Maharashtra, this type of market is known as
oligopoly
Bilateral monopoly
Monopsony
Oligopsony
A market in which only one seller is there it is known as ___________, similarly a market in which only one buyer is there who buy all the product in that market is known as __________
Monopoly ; oligopoly
Oligopoly ; oligopsony
Monopoly ; monopsony
Monopoly ; duopoly
A market in which few sellers are there is known as ___________, similarly a market in which few buyers are there who buy all the product in that market is known as __________
oligopoly ; monopoly
Oligopoly ; oligopsony
Monopoly ; monopsony
Oligopoly ; duopoly
A oligopoly market in which one firm is market leader and other firms are relatively small, such a market is known as
Partial oligopoly
Incomplete oligopoly
Imperfect oligopoly
Duopoly
A oligopoly market where products offered for sale are homogenous is known as
Duopoly
Monopsony
Perfect oligopoly
Imperfect oligopoly
Kinked demand curve is found in
All market forms
Oligopoly market
Monopoly market
Perfect competition
Find average profit or loss in this image
From point ‘a’ to point ‘c’
From point ‘b’ to point ‘c’
From point ‘a’ to point ‘b’
If the current demand is represented by the curve d d and other two demand curves represent change in demand. What will be equilibrium point if there is fall in the price of substitute goods
point ‘c’
Point ‘b’
point ‘a’
If the current demand is represented by the curve d d and other two demand curves represent change in demand. What will be equilibrium point if there is increase in population of a country
point ‘c’
Point ‘b’
point ‘a’
If the current demand is represented by the curve d d and other two demand curves represent change in demand. What will be equilibrium point if there is increase in income level in general
point ‘c’
Point ‘b’
point ‘a’
Suppose there is war between two countries which has adversely affected overall supply of a commodity, this would cause _______ in equilibrium price and ______equilibrium quantity
Fall ; rise
Rise ; fall
Rise ; rise
Fall ; fall
Suppose there is change in fashion in a manner that it has favourable affected demand of our product, what will be its effect on equilibrium and price and equilibrium quantity of our product
Eq Price would fall and eq quantity would rise
Eq Price would rise and eq quantity would also rise
Both eq price and eq quantity would fall
this curve is showing a possibility of
Normal profit
Super normal profit
Loss
At the point where MR is zero in this graph, Price elasticity if demand must be
Zero
One
Less than one
Infinite
Where MR is positive in this graph, price elasticity of demand must
Zero
One
Less than one
More than one
If a firm faces this type of revenue and cost curves in the long run then that means the firm is
Earning normal profits by underutilisation of resources
Super normal profits by optimum use of resources
Normal profits by optimum use of resources
There are 10 grocery store in a village, all of whom have Areal washing powder for sale. What is most likely to happen assuming consumers are rational,
They all can sell areal powder at different prices
They will sell areal powder at same price
There are 25 readymade garments shops in gulmandi, each one of them have different designs of garments, what is likely to happen, assuming consumers are rational.
Each of the seller have power to decide their own prices
each of the seller can sell the product at market determined prices
control over price comes from
product differentiation
Number of sellers
Goodwill of the seller
None of above
In oligopoly market products are
Homogenous
Heterogeneous
Either a or b
None
In which market form people can easily substitute product of one producer with product of other producer
Monopoly
Monopolistic competition
Perfect competition
None
In which market form people cannot easily substitute product of one producer with product of other producer
Monopoly
Monopolistic competition
Perfect competition
None
Indian railway has unique service which is not comparable with other modes of transportation. If railway decides to doubles its fares, what will be its effect on their demand
Demand will go down as people might reduce their unwanted visits to other places
Demand may go down if people choose to go by bus if it costs lower than railway
Demand may go down if people choose to fly by airlines if the difference in airfares and railway fare is relatively less due to increase in air fares
All of above
________ element is present in monopolistic competition but completely missing in monopoly
transportation costs
Competition
consumer
All of above
________ element is present in monopolistic competition but completely missing in perfect competition
Substitutability
Monopoly
homogeneity
All of above
negatively sloped demand curve is not applicable to
Monopoly
Monopolistic competition
perfect competition
None
A monopolist has fixed price of his product at ₹30/unit, now he will have to
Produce as much as he can with all his resources
Produce output that can be sold at prices determined by him
A monopolist has decided to produce and sell 5,000 units per month, now he can
Determine price as per his choice
Determine the price at a level where his demand will be 5,000 units
A monopolist can
maximise price
Maximise his output
Both a & b
Either a or b
A monopolist has
Absolute control over his price
Relative control over his price
Demand curve of a firm is drawn with the help of combination of _______ and ________
Price & quantity
total revenue & quantity
Marginal revenue & quantity
None
average revenue curve of a firm is drawn with the help of combination of _______ and ________
Price & quantity
total revenue & quantity
Marginal revenue & quantity
None
If a firm is making losses in the long run it will
suspend production for some time
Exit the market (discontinue that particular business)
continue to make losses
None
If a firm is making losses in the short run but it is able to recover its variable costs then it will
suspend production temporarily
Exit the market (discontinue that particular business)
continue production to minimise the loss
None
If a firm is making losses in the short run and it is not able to recover its variable costs then it will
suspend production temporarily (shut down)
Exit the market (discontinue that particular business)
continue production to minimise the loss
None
In the long run a firm never makes
Super normal profits
Normal profits
losses
None
Implicit costs are
Minimum returns that a business men wish to get from the business to survive in to the business
Actual cost incurred in running the business
A trader has explicit cost of Rs.100,000 and implicit costs of ₹50,000. His total revenue is ₹150,000. Will he able to meet his personal expenses from profits made into the business
No, as economic profit is zero
yes, his actual business expenditure is only ₹100,000
If an entrepreneur is able to recover implicit cost but nothing more than that this means he is making
super profit
Incurring losses
normal profit
None
If an entrepreneur is able to earn more than implicit costs then he is getting
More than what he could have earned elsewhere
Equal to what he could have earned elsewhere
Less than what he could have earned elsewhere
None
suppose there are 3 grocery stores in a colony, all of whom are earning good amount of profit (super normal profits), what is most likely to happen in such situation
They will continue to make huge profits
New grocery stores would open in that colony
Their costs would start rising after some days
None
suppose there are 3 grocery stores in a colony, all of whom are earning good amount of profit (super normal profits), as a result some new grocery stores got opened in that area, this will cause
increase in profits of each of the grocery store due to increased competition
Lowering of profits of each of the grocery store due to increased competition
No effect on profits
None
In a market form where there are no entry barriers, new firms enter the market when existing firms are earning
Normal profits
Super normal profits
Losses
None
In a market form where there are no entry barriers, existing firms exit the market in the long run, when existing firms are
Normal profits
Super normal profits
Incurring Losses
None
In a market form where there are entry barriers, new firms _________, if existing firms are making super normal profits
Can Enter the market
Cannot enter the market
Ignore the market
None
the process of new firms entering the market would continue as long as there are
Normal profit
Super normal profits
Losses
None
the process of new firms entering the market would cause the existing firms as well new firms to earn ________ profits in the long run
Normal profit
Super normal profits
Losses
None
