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Economics MCQs

Managerial Economics

Quiz # 1, MCQs

NOTE: Attempt all Questions to see the Result at the bottom of this page.

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1)

Which of the following is not a type of market structure?
- A) Competitive monopoly
- B) Oligopoly
- C) Perfect competition
- D) All of the above are types of market structures.
Right Answer is the option "A"

2)

If the market demand curve for a commodity has a negative slope then the market structure must be
- A) perfect competition
- B) monopoly.
- C) imperfect competition
- D) The market structure cannot be determined from the information given
Right Answer is the option "D"

3)

If a firm sells its output on a market that is characterized by many sellers and buyers, a homogeneous product, unlimited long-run resource mobility, and perfect knowledge, then the firm is a
- A)
- B) an oligopolist
- C) a perfect competitor.
- D) a monopolistic competitor.
Right Answer is the option "C"

4)

If a firm sells its output on a market that is characterized by a single seller and many buyers of a homogeneous product for which there are no close substitutes and barriers to long-run resource mobility, then the firm is
- A) a monopolist.
- B) an oligopolist.
- C) a perfect competitor.
- D) a monopolistic competitor.
Right Answer is the option "A"

5)

If a firm sells its output on a market that is characterized by many sellers and buyers, a differentiated product, and unlimited long-run resource mobility, then the firm is
- A) a monopolist.
- B) an oligopolist.
- C) a perfect competitor
- D) a monopolistic competitor.
Right Answer is the option "D"

6)

If a firm sells its output on a market that is characterized by few sellers and many buyers and limited long-run resource mobility, then the firm is
- A) a monopolist
- B) an oligopolist
- C) a perfect competitor
- D) a monopolistic competitor.
Right Answer is the option "B"

7)

If one perfectly competitive firm increases its level of output, market supply
- A) will increase and market price will fall
- B) will increase and market price will rise
- C) and market price will both remain constant
- D) will decrease and market price will rise
Right Answer is the option "C"

8)

8. Which of the following markets comes close to satisfying the assumptions of a perfectly competitive market structure?
- A) The stock market
- B) The market for agricultural commodities such as wheat or corn
- C) The market for petroleum and natural gas
- D) All of the above come close to satisfying the assumptions of perfect competition
Right Answer is the option "D"

9)

The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if
- A) P = 6 and Q = 9.
- B) P = 5 and Q = 2
- C) P = 4 and Q = 4
- D) P = 3 and Q = 6
Right Answer is the option "D"

10)

Which of the following is a barrier to entry that typically results in monopoly?
- A) The firm controls the entire supply of a raw material.
- B) Production of the industry's product is subject to economies of scale over a broad range of output
- C) Production of the industry's product requires a large initial capital investment
- D) The firm holds an exclusive government franchise
Right Answer is the option "C"