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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

In contestable markets, large oligopolistic firms, end up behaving like ?
A perfectly competitive firms
B a cartel
C a monopoly
D monopolistically competitive firms.
Correct Answer: monopolistically competitive firms.
Form society’s point of view, society would be better off if a monopolist ?
A produced less and charged a higher price
B produced more and charged a higher price
C produced more and charged a lower price
D produced less and charged a lower price.
Correct Answer: produced more and charged a lower price
Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? the monopolist has?
A maximized its total revenue
B set price equal to its average cost
C equated marginal revenue and marginal cost
D maximized the difference between marginal revenue and marginal cost.
Correct Answer: equated marginal revenue and marginal cost
The slope of marginal revenue curve is ?
A always equal to one.
B half as steep as the demand curve
C the same as the slope of the demand curve
D twice as steep as the demand curve
Correct Answer: twice as steep as the demand curve
Economic profits are ?
A the difference between total revenue and total costs.
B anything greater than the normal opportunity cost of investing
C the opportunity costs of all inputs
D a rate of profit that is just sufficient to keep owners and investors satisfied
Correct Answer: anything greater than the normal opportunity cost of investing
A normal rate of profit ?
A Is the rate of return on investments over the interest rate on risk-free government bonds.
B is the rate that is just sufficient to keep owners or investors satisfied.
C is the difference between total revenue and total costs
D is zero in a perfectly competitive industry.
Correct Answer: is the rate that is just sufficient to keep owners or investors satisfied.
If firms can neither enter nor leaves an industry, the relevant time period is the ?
A immediate run
B intermediate run
C long run
D short run
Correct Answer: short run
The cosmetics industry is not considered by economists to be a good example of perfect competition because ?
A there are many EU and government health controls on cosmetic products
B there are a very large number of firms in the industry
C firms spend a large amount of money on advertising
D profit margins are very high for both producers and retailers
Correct Answer: firms spend a large amount of money on advertising
If a firm has some degree of market power, then output price ?
A no longer influences the amount demand of the firm’s product
B becomes a decision variable for the firm
C is guaranteed to be above a firm’s average cost.
D is determined by the actions of other firms in the industry
Correct Answer: becomes a decision variable for the firm
Market power is ?
A a firm’s ability to monopolies a market completely.
B a firm’s ability to raise price without losing all demand for its product
C a firm’s ability to sell any amount of output it desires at the market-determined price.
D a firm’s ability to charge any price it likes
Correct Answer: a firm’s ability to raise price without losing all demand for its product
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