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Economics MCQs

Managerial Economics

Quiz # 3, 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 a differentiated product?
- A) A hamburger
- B) A shirt
- C) An automobile
- D) All of the above are differentiated products
Right Answer is the option "D"

2)

Which of the following is a characteristic of monopolistic competition?
- A) Few sellers
- B) A differentiated product
- C) Easy entry into and exit from the industry
- D) All of the above are characteristics of monopolistic competition
Right Answer is the option "A"

3)

The demand curve faced by a monopolistically competitive firm is
- A) perfectly elastic
- B) elastic
- C) unit elastic
- D) inelastic
Right Answer is the option "B"

4)

If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm
- A) should shut down
- B) should decrease output, but should not shut down
- C) should increase output
- D) None of the above is correct
Right Answer is the option "D"

5)

If an imperfectly competitive firm is producing a level of output where marginal cost is equal to marginal revenue, marginal revenue is below average variable cost, and price is equal to average total cost, then the firm is
- A) in long-run equilibrium
- B) in short-run equilibrium
- C) minimizing short-run average total cost
- D) breaking even
Right Answer is the option "C"

6)

Product variation refers to
- A) an activity undertaken by a firm to increase demand
- B) a problem with quality control that tends to decrease demand
- C) an activity undertaken by a firm to make demand more price inelastic
- D) None of the above is correct
Right Answer is the option "A"

7)

Which of the following industries is most likely to be monopolistically competitive
- A) The automobile industry
- B) The steel industry
- C) The car repair industry
- D) The electrical generating industry
Right Answer is the option "C"

8)

Marginal revenue is equal to price for which one of the following types of market structure?
- A) Monopoly
- B) Perfect competition
- C) Monopolistic competition
- D) Oligopoly
Right Answer is the option "B"

9)

The identification problem refers to the difficulties that a researcher encounters when trying to
- A) determine which independent variables influence quantity demanded
- B) find accurate data on the price of a commodity and on the quantity demanded of a commodity
- C) estimate a demand function from data on commodity price and quantity demanded
- D) measure the impact of extraneous variables on experimental market data
Right Answer is the option "C"

10)

The estimation of consumer demand by questioning a sample of consumers is referred to as the
- A) consumer survey approach
- B) observational research approach
- C) consumer clinic approach
- D) market experiment approach
Right Answer is the option "A"