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Worksheets

UT-1

Total questions: 50

Worksheet time: 25mins

Name
Class
Date
1.

Perfect competition is characterized by:

a)

Few buyers and sellers

b)

Many buyers and sellers

c)

Product differentiation

d)

Barriers to entry

2.

In perfect competition, firms are:

a)

Price makers

b)

Price takers

c)

Price discriminators

d)

Price regulators

3.

Under perfect competition, in the short run, a firm can earn:

a)

Only normal profit

b)

Only losses

c)

Normal or supernormal profit or loss

d)

Only supernormal profit

4.

In long run equilibrium under perfect competition, a firm earns:

a)

Supernormal profits

b)

Losses

c)

Normal profit

d)

Zero revenue

5.

In perfect competition, long-run equilibrium occurs where:

a)

MR = MC = ATC minimum

b)

MR > MC

c)

AR > MR

d)

MC < MR

6.

The industry supply curve in perfect competition is the:

a)

MC curve above AVC

b)

MC curve below AVC

c)

ATC curve

d)

AR curve

7.

The main feature of monopoly is:

a)

Many sellers

b)

Single seller

c)

Free entry

d)

Homogeneous products

8.

A monopoly firm faces which type of demand curve?

a)

Perfectly elastic

b)

Horizontal

c)

Downward sloping

d)

Vertical

9.

A monopolist maximizes profit where:

a)

AR = MR

b)

MR = MC

c)

MC = ATC

d)

TR = TC

10.

In the long run, a monopoly can earn:

a)

Only normal profits

b)

Only losses

c)

Only supernormal profits

d)

Normal or supernormal profits

11.

Price discrimination is possible when:

a)

Markets are separated

b)

Demand elasticity differs

c)

Resale is impossible

d)

All of the above

12.

Third-degree price discrimination is based on:

a)

Cost differences

b)

Income differences

c)

Elasticity differences

d)

Production differences

13.

A monopolist charges a higher price where demand is:

a)

Elastic

b)

Inelastic

c)

Unit elastic

d)

Perfectly elastic

14.

Which of the following can help control monopoly?

a)

Price ceilings

b)

Nationalization

c)

Promoting competition

d)

All of the above

15.

Monopolistic competition features:

a)

Homogeneous products

b)

Single producer

c)

Product differentiation

d)

No advertising

16.

Under monopolistic competition, firms can earn supernormal profits in the:

a)

Short run only

b)

Long run only

c)

Short and long run

d)

Never

17.

In long run equilibrium under monopolistic competition:

a)

Price = MC

b)

Price = minimum ATC

c)

Price > MC

d)

Price < MC

18.

Excess capacity occurs in which market structure?

a)

Perfect competition

b)

Monopoly

c)

Monopolistic competition

d)

Oligopoly

19.

Under monopolistic competition, demand curve is:

a)

Perfectly elastic

b)

Perfectly inelastic

c)

Downward sloping

d)

Vertical

20.

Oligopoly means:

a)

One seller

b)

Two sellers

c)

Few sellers

d)

Many sellers

21.

A common feature of oligopoly is:

a)

Price taking

b)

Independence

c)

Interdependence

d)

Free entry

22.

The kinked demand curve model explains:

a)

Price rigidity

b)

Price wars

c)

Collusion

d)

Perfect elasticity

23.

In the kinked demand curve model, the upper part of the curve is:

a)

Elastic

b)

Inelastic

c)

Unit elastic

d)

Perfectly elastic

24.

Cournot model of oligopoly assumes firms compete in:

a)

Prices

b)

Quantities

c)

Advertising

d)

Cost reduction

25.

In Cournot model, firms assume rivals’ output is:

a)

Zero

b)

Increasing

c)

Constant

d)

Unknown

26.

Price leadership is common in:

a)

Perfect competition

b)

Monopoly

c)

Oligopoly

d)

None of these

27.

Collusive oligopoly aims to maximize:

a)

Social welfare

b)

Industry profits

c)

Consumer surplus

d)

Government revenue

28.

The long-run curve under oligopoly is:

a)

Smooth

b)

Kinked

c)

Vertical

d)

Upward sloping

29.

Which market structure has the highest degree of competition?

a)

Oligopoly

b)

Monopoly

c)

Monopolistic competition

d)

Perfect competition

30.

Under monopoly, AR curve is also the:

a)

MC curve

b)

MR curve

c)

Demand curve

d)

Supply curve

31.

Macroeconomics deals with:

a)

Individual units

b)

Small firms

c)

Aggregate economy

d)

Consumer behavior only

32.

National income is a measure of:

a)

Total demand

b)

Total production

c)

Total economic activity

d)

Only consumption

33.

GDP refers to:

a)

Income earned by nationals abroad

b)

Total value of goods and services produced within a country

c)

Total wealth of the nation

d)

Government expenditure only

34.

Which of the following is a macroeconomic variable?

a)

Individual demand

b)

Price of one product

c)

National income

d)

Cost of production

35.

Circular flow model shows interaction between:

a)

Firm and industry

b)

Government and banks

c)

Households and firms

d)

Sellers and intermediaries

36.

Inflation means:

a)

Fall in prices

b)

Rise in general price level

c)

Increase in income

d)

Increase in unemployment

37.

Unemployment refers to:

a)

People not seeking jobs

b)

People working part-time

c)

People willing but unable to find work

d)

All retired people

38.

GDP at factor cost excludes:

a)

Subsidies

b)

Indirect taxes

c)

Depreciation

d)

Exports

39.

Personal income = National income – ?

a)

Corporate tax

b)

Savings

c)

Undistributed profits + Corporate tax + Transfer payments

d)

Depreciation

40.

National income measured at constant prices is called:

a)

Nominal NI

b)

Real NI

c)

Personal income

d)

Disposable income

41.

Which method of NI uses value added?

a)

Output method

b)

Income method

c)

Expenditure method

d)

Transfer method

42.

Expenditure method includes:

a)

Rent

b)

Wages

c)

Investment

d)

Profit

43.

GDP > GNP when:

a)

Net factor income from abroad is positive

b)

Net factor income from abroad is negative

c)

Exports exceed imports

d)

Indirect taxes rise

44.

Which is NOT a problem in NI estimation?

a)

Non-monetized sector

b)

Multiple counting

c)

Illegal activities

d)

Equal income distribution

45.

Transfer payments are:

a)

Included in NI

b)

Excluded from NI

c)

Equal to consumption

d)

Part of investment

46.

Precaution in NI measurement includes avoiding:

a)

Double counting

b)

Depreciation

c)

Direct taxes

d)

None of these

47.

Inflation reduces:

a)

Real income

b)

Investment

c)

Money supply

d)

Aggregate demand

48.

GDP deflator measures:

a)

Unemployment rate

b)

Inflation rate

c)

Growth rate

d)

Population growth

49.

Unemployment rate is calculated as:

a)

Employed ÷ Total population

b)

Unemployed ÷ Labour force

c)

Employed ÷ Labour force

d)

Unemployed ÷ Working population

50.

National Income in India is estimated by:

a)

NITI Aayog

b)

RBI

c)

Central Statistical Office (CSO) / NSO

d)

Finance Commission

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