Principles of Economics
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20 QuestionsShow answers
  • Question 1
    60 seconds
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    Q.

    What are the characteristics of a monopoly market?

    answer choices

    one seller and large number of buyers

    no close substitutes

    new market entry is impossible

    price maker

    all the 4 characteristics

  • Question 2
    180 seconds
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    Q.

    I = MC, II=ATC, III = demand curve, IV = MR. How does a monopoly choose its profit maximizing output and price?

    answer choices

    Choose Q2 and P6 for which MR = MC and P = AR

    Choose Q2 and P4 for which MR = MC and P = ATC

    Choose Q1 and P5 for which MR = ATC and P = ATC

    Choose Q1 and P5 for which MR = ATC and P = ATC

    Choose Q3 and P5 for which MR = minimum of ATC and P = AR

  • Question 3
    120 seconds
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    Q.

    One factor that distinguishes monopolistic competition from perfect competition is that:

    answer choices

    No barriers to entry/exist in monopolistic competition.

    Firms in monopolistic competition can set its own price and output.

    Firms in monopolistic competition make zero economic profit in the long run.

    Close substitutes are available in monopolistic competition.

  • Question 4
    60 seconds
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    Q.

    Scarcity is a situation:

    answer choices

    where people’s needs exceed their resources.

    where people’s wants exceed their resources.

    where the quantity of resources is sufficient to meet all wants

    where people’s needs exceed other people’s resources.

    where the quantity of resources is sufficient to meet all needs.

  • Question 5
    45 seconds
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    Q.

    Labour, land and capital are called:

    answer choices

    goods and services.

    entrepreneurship.

    outputs.

    factors of production.

  • Question 6
    60 seconds
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    Q.

    what would reduce an economy's protection against the import of cars?

    answer choices

    a lower exchange rate

    a higher quotas imported cars

    a higher tariff on imported cars

    higher subsidy for domestic car producers

  • Question 7
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    Q. An import quota is a
    answer choices
    tax on import quantities above the legal limit.
    way to increase tariff revenues for the exporting country.
    legal limit on the amount of a good that can be imported into a country.
    legal incentive for members of WTO to increase their exports of a good or service.
  • Question 8
    30 seconds
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    Q.

    A total ban on imported products is a .....

    answer choices

    Tariff

    Quota

    Embargo

    Subsidy

  • Question 9
    30 seconds
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    Q.

    Net national product at factor cost is also known as:

    answer choices

    Net Domestic product

    Gross National product

    National Income

    Personal Income

  • Question 10
    30 seconds
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    Q.

    GNP(MP) = GDP(MP) + ________ :

    answer choices

    Depreciation

    Indirect taxes

    NYFA

    Subsidy

  • Question 11
    20 seconds
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    Q.

    1.How many approaches in calculating national income?

    answer choices

    4

    3

    2

    1

  • Question 12
    20 seconds
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    Q.

    4. The national income is

    answer choices

    a. NNP at factor cost

    b. NNP at market price

    c. GNP at market price

    d. GNP at factor cost

  • Question 13
    20 seconds
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    Q.

    5.The value of the output of all goods and services produced within a country in a year.

    answer choices

    total output

    Gross Domestic Product

    national income

    net domestic product

  • Question 14
    20 seconds
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    Q.

    6.When a nation's exports exceed its imports and is calculated as exports - imports

    answer choices

    trade surplus

    trade deficit

    inventory

    gross domestic product

  • Question 15
    30 seconds
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    Q.

    Long run refers to time period in which________________.

    answer choices

    all inputs cannot be increased.

    all inputs can be increased.

    there is at least one variable input.

    there is at least one fixed input.

  • Question 16
    30 seconds
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    Q.

    In the short Run, all inputs are considered to be variable inputs.

    answer choices

    TRUE

    FALSE

  • Question 17
    30 seconds
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    Q.

    When MP increases, TP will increase at increasing rate.

    answer choices

    TRUE

    FALSE

  • Question 18
    30 seconds
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    Q.

    What is the goal of a firm?

    answer choices

    to make profits

    to maximize profits

    to maximize revenue

    none of the above

  • Question 19
    60 seconds
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    Q.

    Fixed Costs are only fixed in the

    answer choices

    Long run

    Short run

    Period where there is neither a profit or a loss

    none of the above

  • Question 20
    60 seconds
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    Q. The reason that firms in perfect competition earn zero economic profit in the long run is that:
    answer choices
    Firms are small
    There are a large number of sellers
    There are no barriers to entry or exit
    Each firm has control over market price
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