1.  Which subject is relevant to the study of consumer behaviour?

a

  Sociology

b

 Economics

c

 Psychology

d

 All of these

Answer & Explanation
Answer : Option D

2.  A situation in which the number of competing firms is relatively small is known as

a

  Monopoly

b

 Oligopoly

c

 Monopsony

d

 Perfect competition

Answer & Explanation
Answer : Option B

3.  A perfectly competitive industry becomes a monopoly with the same cost conditions, it will now sell

a

  A larger output at the old price

b

 A larger output at a higher price

c

 A reduced output at a higher price

d

 An unchanged output at a higher price

Answer & Explanation
Answer : Option C

4.  If a commodity is used for multiple purposes then the demand for it is known as

a

  Joint Demand

b

 Direct Demand

c

 Composite Demand

d

 Autonomous Demand

Answer & Explanation
Answer : Option C

5.  For maximisation of profit in the short run, the condition is

a

  AR = AC

b

 MC = AC

c

 MR = AR

d

 MR = MC

Answer & Explanation
Answer : Option D

6.  In perfect competition in the long run there will be no

a

  Costs

b

 Production

c

 Normal profit

d

 Supernormal profits

Answer & Explanation
Answer : Option D

7.  In the perfect competition at short run, the firm is a price and can sell amount of output at the going market price.

a

  Taker, any

b

 Maker, Any

c

 Taker, a definite

d

 None of the above

Answer & Explanation
Answer : Option A

8.  For a competitive firm, long period normal price will

a

  Equal AC of production only

b

 Equal TC of production only

c

 Equal MC of production only

d

 Equal AC and MC of production

Answer & Explanation
Answer : Option D

9.  Law of diminishlng marginal rate of substitution is associated with

a

  Hicks

b

 Keynes

c

 Slutsky

d

 Marshall

Answer & Explanation
Answer : Option A

10.  Which of the following is not the method of forecasting demand

a

  Total outlay method

b

 Expert option method

c

 Collective opinion method

d

 Controlled opinion method

Answer & Explanation
Answer : Option A

11.  The elasticity of substitution between two inputs in CES production function

a

  Remains constant

b

 Increases continuously

c

 Decreases continuously

d

 None of these

Answer & Explanation
Answer : Option A

12.  Impact of change in demand in one sector on other sectors is studied by

a

  Partial equilibrium

b

 General equilibrium

c

 Both (a) and (b)

d

 None of these

Answer & Explanation
Answer : Option B

13.  In short run, the law of variable proportions is also known as the

a

  Law of return to scale

b

 Law of constant returns

c

 Law of increasing returns

d

 Law of diminishing returns

Answer & Explanation
Answer : Option D

14.  A consumer consuming two goods will be in equilibrium, when the marginal utilities from both goods are

a

  zero

b

 Equal

c

 Minimum possible positive

d

 Maximum possible positive

Answer & Explanation
Answer : Option B

15.  Which of the following is an assumption of the model of perfect competition?

a

  Product homogeneity

b

 No government regulation

c

 Perfect mobility of factors of production

d

 All of the above

Answer & Explanation
Answer : Option D
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