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- 1. Multiple Choice
What are the characteristics of a monopoly market?
one seller and large number of buyers
no close substitutes
new market entry is impossible
price maker
all the 4 characteristics
- 2. Multiple Choice
I = MC, II=ATC, III = demand curve, IV = MR. How does a monopoly choose its profit maximizing output and price?
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
- 3. Multiple Choice
One factor that distinguishes monopolistic competition from perfect competition is that:
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.
- 4. Multiple Choice
Scarcity is a situation:
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.
- 5. Multiple Choice
Labour, land and capital are called:
goods and services.
entrepreneurship.
outputs.
factors of production.
- 6. Multiple Choice
what would reduce an economy's protection against the import of cars?
a lower exchange rate
a higher quotas imported cars
a higher tariff on imported cars
higher subsidy for domestic car producers
- 7. Multiple ChoiceAn import quota is atax 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.
- 8. Multiple Choice
A total ban on imported products is a .....
Tariff
Quota
Embargo
Subsidy
- 9. Multiple Choice
Net national product at factor cost is also known as:
Net Domestic product
Gross National product
National Income
Personal Income
- 10. Multiple Choice
GNP(MP) = GDP(MP) + ________ :
Depreciation
Indirect taxes
NYFA
Subsidy
- 11. Multiple Choice
1.How many approaches in calculating national income?
4
3
2
1
- 12. Multiple Choice
4. The national income is
a. NNP at factor cost
b. NNP at market price
c. GNP at market price
d. GNP at factor cost
- 13. Multiple Choice
5.The value of the output of all goods and services produced within a country in a year.
total output
Gross Domestic Product
national income
net domestic product
- 14. Multiple Choice
6.When a nation's exports exceed its imports and is calculated as exports - imports
trade surplus
trade deficit
inventory
gross domestic product
- 15. Multiple Choice
Long run refers to time period in which________________.
all inputs cannot be increased.
all inputs can be increased.
there is at least one variable input.
there is at least one fixed input.
- 16. Multiple Choice
In the short Run, all inputs are considered to be variable inputs.
TRUE
FALSE
- 17. Multiple Choice
When MP increases, TP will increase at increasing rate.
TRUE
FALSE
- 18. Multiple Choice
What is the goal of a firm?
to make profits
to maximize profits
to maximize revenue
none of the above
- 19. Multiple Choice
Fixed Costs are only fixed in the
Long run
Short run
Period where there is neither a profit or a loss
none of the above
- 20. Multiple ChoiceThe reason that firms in perfect competition earn zero economic profit in the long run is that:Firms are smallThere are a large number of sellersThere are no barriers to entry or exitEach firm has control over market price
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