If a firm is operating at any point inside the PPF, the firm is (a) Efficient firm ; (b) Inefficient firm ; (c) Poised for abnormal growth ; (d) None

If a firm is operating at any point inside the PPF, the firm is (a) Efficient firm ; (b) Inefficient firm ; (c) Poised for abnormal growth ; (d) None
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Answer :

 (b) Inefficient firm
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Economic growth is best depicted by (a) Outward shift in PPF ; (b) Upward movement in PPF ; (c) Inward movement in PPF (d) Downward movement in PPF

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Last Answer : (a) Outward shift in PPF ; 

Which of the following statement is true (a) Monopolist are price takers ; (b) Monopoly firm earn abnormal profits; (c) A Monopoly firm faces straight demand line ; (d) Supply curve of a monopoly firm is positive sloped

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In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion

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In the long run a firm in perfect competition earns (a) Normal profit only ; (b) Abnormal profit ; (c) Average profit of past five years; (d) 12.33% profit on capital employed

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Any point beyond PPF curve can be attained by (a) Increasing supply of factor inputs ; (b) Technological innovation ; (c) Both ; (d) None

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If an economy is working at a point left to PPF curve it shows that……… (a) The economy is working at less than the full employment level ; (b) The economy is at full employment level ; (c) The economy is country is faced with excess production ; (d) There is glut of imports

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Any point beyond PPF is (a) Attainable ; (b) Unattainable ; (c) Attainable with increase in production facilities ; (d) None

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Last Answer :  (c) Attainable with increase in production facilities

PPF is negative sloped due to (a) Scarcity of production resources ; (b) Unlimited wants ; (c) Improvement in technology; (d) Increasing opportunity cost

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Curvature of PPF is due to……… (a) Increase in opportunity cost ; (b) Decrease in opportunity cost ; (c) Fall in demand; (d) Fall in supply

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Which of these statement is true about production possibility curve (PPC/PPF) (a) It shows various combinations of two goods which yield same level of satisfaction (b) It shows various combination of two goods which an economy can produce with a given amount of resources (c) It shows various combination of two goods which an economy can produce with a given budget (d) It shows various combination of two goods which an economy can produce with a given time

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Total profit of a firm in a perfect competitive market is – (a) Total revenue less total cost ; (b) Marginal revenue less marginal cost; (c) Total revenue less marginal cost ; (d) Total revenue less variable cost

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The demand curve of a Monopoly firm is – (a) Same that of a firm in a perfect competition ; (b) Same as that of the total market demand; (c) Non-exist ; (d) Perfectly elastic

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What will happen if a firm in perfect competitive market, increase its output by 50% (a)Total sales revenue will also increase by 50% ; (b) (b)Selling price will come down by 50%; (c)Total sales revenue will decrease by 50% ; (d)Profit will increase by 25%

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Demand curve of an Oligopoly firm is characterized by (a) Horizontal to X axis ; (b) Kink at the price ; (c) U shaped curve ; (d) A liner line

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Average Revenue of a monopolist firm is (a) Always more than the Marginal revenue ; (b) Always less than the Marginal revenue; (c) Equal to marginal revenue ; (d) Any of the above three possible

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Which of the following faces a downward sloping demand curve (a) Firm in a competitive market ; (b) Firm in a monopoly market ; (c) Both ; (d) None

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For a monopoly firm the MR Curve (a) Overlaps AR curve ; (b) Is above the AR curve ; (c) Lies half way between AR curve and the Y axis ; (d) Is same as AR curve

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Which of the following statement is true (a) For a monopoly firm AR can be zero (b) For a monopoly firm MR can be zero or even negative (c) For monopoly firm MR and AR are identical (d) For a monopoly firm MR and AR are positive sloped

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For a monopoly firm market demand curve is (a) Marginal revenue curve itself ; (b) Average Revenue curve itself ; (c) Marginal cost curve (d) None

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Which of the following statement is true (a) In perfect competition Average and Marginal revenue are identical (b) In perfect competition Average and Marginal cost are identical (c) In perfect competition Average price and Marginal cost are identical (d) In perfect competition only normal profit can be earned by a firm

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Under perfect market conditions the supply curve of a firm is represented by (a) MC curve ; (b) MR curve ; (c) AR curve ; (d) AC curve

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Under perfect market conditions a firm is said to be in equilibrium where (a) Total output is equal to total demand ; (b) Profit is the maximum; (c) Where the total revenue is maximum ; (d) Where total average cost is the minimum

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A competitive firm maximizes its total profit when ……………… (a) Average cost equal average realization ; (b) Marginal cost equals Price; (d) Total revenue is the maximum ; (d) MR = AR

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In a competitive market ……………….. is the price taker (a) Firm ; (b) Industry ; (c) Consumer ; (d) Trade association

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In a competitive market ………. is the price maker (a) Firm ; (b) Industry ; (c) Consumer ; (d) Trade association

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A monopoly firm makes more profit because (a) It has ability to choose among price and output combination ; (b) It can discriminate price; (c) It leave the consumer with no consumer surplus ; (d) it acts as a market leader

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In the short run an oligopolistic firm will (a) Make profits ; (b) Incur losses ; (c) Just break even ; (d) Any of these three are possible

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In short run a monopolistic competition firm will be in equilibrium where (a) MR = curve intersect SMC curve from above (b) MR curve intersect SMC curve from below (c) MC = AR ; (d) MR curve intersect SMC from below and P is equal to or more than AVC

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When the Demand curve of a pure monopoly firm is elastic, MR will be (a) Negative ; (b) Positive ; (c) Zero ; (d) Any of these

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The ideal level of operation for a pure monopoly firm is the level where (a) TR and STC curve are parallel to each other ; (b) TR = TC ; (c) TR = Total variable cost; (d) TR is less than STC

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In the short run if the price is above the average total cost in a monopolistic competitive market, the firm makes (a) Profits and new firms join the market ; (b) Profit and bar entry to new firms; (c) Makes losses and exit the market ; (d) Quick profit and disappears

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A firm that makes profit in excess of normal profit is earning (a) Economic profit ; (b) Costing profit ; (c) Normal profit ; (d) Super normal profit

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A firm that break even after all the economic costs are paid in earning (a) Economic profit ; (b) Accounting profit ; (c) Normal profit ; (d) Super normal profit

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When the price is less than the average variable cost, the firm should …………. (a) Continue to operate till the market recover ; (b) Shut down its operation for the time being (c) Retrench workers and pay them compensation; (d) Clear the existing stock at a price less than the prevailing price to beat the competitors

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If a firm shut down at a level when AVC > Price, the firm restricts its losses to (a) Total fixed cost ; (b) Average fixed cost ; (c) Variable cost ; (d) Average variable cost

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A firm faces the shut down situation when (a) Price is less than average variable cost ; (b) Price is more than the average variable cost (c) Price is equal to fixed cost ; (d) Price is more than the average fixed cost

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When a firm enters the law of diminishing returns to scale (a) TVC curve begins to fall at an increasing rate (b) TVC curve begins to increase at an increasing rate (c) TVC curve begins to fall at an decreasing rate (d) TVC curve begins to increase at an decreasing rate

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The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory

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The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory

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Last Answer : (b) Diseconomies of scale;

Implicit cost refers to ……………… (a) Value of inputs owned by the firm and used in its own manufacturing process (b) Value of input or services purchased from outside and used in its own manufacturing process ; (c) Value of inputs owned by the firm and sold to others ; (d) Value of inputs or services for which no payments were made to outside

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Interms of economics, if it is possible to make someone better off without making someone worse off, then the situation is - (1) Inefficient (2) Efficient (3) Optimal (4) Paretosuperior

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The cost of replacement of inefficient chiller with an energy efficient chiller in a plant was Rs. 10 lakh .The net annual cash flow is Rs 2.50 lakh .The return on investment is: a) 18% b) 20% c) 15 % d) none of the above

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In terms of economics, if it is possible to make someone betteroff without making someone worseoff, then the situation is (1) Inefficient (2) Efficient (3) Optimal (4) Paretosuperior

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Last Answer : Inefficient

In addition to three Central problem of economy, the additional problem(s) raised by the Modern economists is / are (a) Are the resources fully utilized or not ; (b) How efficient is the production and distribution system; (c) Whether the capacity to produce or grow is increasing or is static ; (d) All the three

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Which of these is/are not included in net domestic product at factor cost. (a) Wages or compensation of employees ; (b) Rent, interest, profits or operating surplus; (c) Mixed income ; (d) None

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……………. States that rapid growth of per capita income will be associated with a reduction in poverty. (a) The trickle down theory ; (b) Multiplier theory ; (c) Malthus population theory ; (d) None

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Structural unemployment is mainly due to (a) Structural changes in the economy ; (b) Technological development (c) Growth in GDP ; (d) Population explosion.

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Inflationary conditions may co-exist with which of the following situation (a) Increase in factor cost ; (b) Increase in employment opportunities; (c) Growth in GDP and imports ; (d) All the three

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