Subject Code: 17UES3C5

JAMAL MOHAMED COLLEGE (Autonomous)

Tiruchirappalli – 620 020
Objective Type Questions
Department of: Economics
Semester: IIIrd UG/PG: UG
Title of the Paper: Micro Economics – III

1. 1. Market Means
a. Place b. Price
c. Income d. Place where the buyer and sellers meet

2. Value determined by
a. Price b. Income
c. Place d. All the above

3. Mercator means
a. Market b. Place
c. Income d. None

4. To the housewife is called

a. Market b. Marketing
c. Place d. None

5. Nature of demand decide by the

a. Size of the market b. Place of the market
c. Both d. None

6. Marshall suggests that time plays a role in deciding

a. Price b. Value
c. Both d. None

7. In a very short period commodity by nature is

a. Durable b. Perishable
c. Both d. None

8. Very long period is called

a. Market period b. Long period
c. Secular period d. None

9. When a firm said to be equilibrium?

a. Maximum satisfaction b. Maximum profit
c. Both d. None
10. What is Marginal Cost?
a. Addition made to the total cost b. Addition made to the total revenue
c. Both d. None

TC
11. =?
TR

a. MC b. TR
c. AC d. AR

TR
12. =?
TQ

a. MR b. TC
c. AR d. AC

13. Particular unit of production is called

a. Industry b. Firm
c. Both d. None

14. Addition made to the total revenue is called

a. MR b. TR
c. AR d. AC

TFC
15. =?
Tq
a. AFC b. AVC
c. AC d. ATC

TVC
16. =?
Tq
a. AFC b. AVC
c. AC d. ATC

TK
17. =?
Tq
a. MR b. AR
c. Both d. None

18. TFC + TVC = ?

a. TC b. ATC
c. MC d. AFC
 TK
19. =?
Tq
a. MR b. AR
c. TR d. TC

20. Equilibrium of the firm is called

a. Maximum profit b. Minimum profit
c. Both d. None

21. Short period price is called

a. Normal price b. Market price
c. Both d. None

22. Perfect competition means

a. Large numbers of buyers and sellers b. Homogeneous product
c. Both d. None

23. Seller is a price taker not price maker under

a. Perfect competition b. Imperfect competition
c. Both d. None

24. What are the basic conditions for price determination under perfect competition?
a. MC = MR b. MC cuts MR from the below
c. Both d. None

25. Under perfect competition firm may income loss during the
a. Long period b. Short period
c. Both d. None

26. Perfect competition is a market

a. Situation b. Condition
c. Both d. None

27. Seller is a price taker under

a. Perfect competition b. Imperfect competition
c. Both d. None

28. Both Perfect and loss occur under perfect competition during
a. Short period b. Long period
c. Both d. None

29. MC = MR is a Condition for price determination under

a. Monopoly b. Perfect competition
c. Both d. None
30. Perfect Knowledge of the buyers and sellers under
a. Monopoly b. Perfect competition
c. Both d. None

31. Product nature under perfect competition is

a. Heterogeneous b. Homogeneous
c. Both d. Bone

32. Free entry and exit under

a. Monopoly b. Perfect Competition
c. Both d. None

33. Under perfect competition there is no

a. Selling cost b. Sales promotion
c. Advertisement expenditure d. All the above

34. Price is unchanged under during short period

a. Perfect competition b. Imperfect competition
c. Both d. None

35. Free entry and exit leads to

a. Loss b. Profit
c. Both d. None

36. Demand and supply leads automatic equilibrium under

a. Perfect competition b. Imperfect competition
c. Both d. None

37. MC cuts MR from the

a. Below b. Above
c. Middle d. None

38. MR = P = AR under
a. Perfect competition b. Monopoly
c. Both d. None

39. Long period always under perfect competition

a. Super normal profit b. Normal profit
c. Both d. None

40. If demand is higher than supply it is called

a. Excess demand b. Security demand
c. Both d. None

41. Monopoly means

a. Single seller b. Double seller
c. Both d. None

42. Mono means single poly means

a. Buyer b. Seller
c. Both d. None
43. Monopoly is a
a. Greek root b. Latin root
c. Both d. None

44. Monopoly firm owned and operated by individuals is called

a. Private b. Public
c. Both d. None

45. What is an example of a legal monopoly

a. Under Govt. man date b. Private
c. Public d. None

46. What is an example for pure monopoly?

a. Electricity b. Microsoft
c. Both d. None

47. What is perfect monopoly?

a. Single suppliers in a market b. Few supplier
c. Both d. None

48. What is discriminating monopoly?

a. Different prices to different buyers b. Same price
c. Constant price d. None

49. Monopoly power means

a. Degree of price setting b. Price setting
c. Constant price d. None

50. How many degrees of monopoly power?

a. Four b. Two
c. Three d. Five

51. Monopolist maximise

a. Profit b. Price
c. Income d. All the above

52. Higher barrier to entry

a. Under monopoly b. Oligopoly
c. Perfect competition d. None

53. Price of the good or product being sold decided by the

a. Monopolist b. Oligopolist
c. Both d. None

54. Under monopoly price discrimination is possible

a. True b. False
c. Both d. None
55. Monopoly price discrimination is profitable
a. False b. True
c. Both d. None

56. Fortunate monopolist cannot sell enough if price rises

a. Fact b. False
c. Partially true d. None

57. Price of monopolist differ from place to place is called

a. Place discrimination b. Trade discrimination
c. Both d. None

58. Ed of is differ between market

a. Price discrimination b. Stable price
c. Both d. None

59. Dumping meaning

a. Price is low in the international market b. Price is high
c. Both d. None

60. Nature of commodity under monopoly

a. Homogeneous b. Heterogeneous
c. Both d. None

61. Monopolistic competition is under

a. Perfect b. Imperfect
c. Both d. None

62. Extreme situation of monopoly and the extreme situation of competition is called
a. Monopoly b. Oligopoly
c. Duopoly d. Monopolistic Competition

63. Product nature under monopolistic competition is

a. Homogeneous b. Heterogeneous
c. Both d. None

64. Demand curve under monopolistic competition is always

a. Determinate b. Indeterminate
c. Both d. None

65. Type of Imperfect competition is called

a. Monopolistic competition b. Monopoly
c. Oligopoly d. None

66. Restaurant business is a best example for

a. Monopoly b. Competition
c. Both d. Monopolistic Competition

67. Selling cost plays vital role under

a. Monopoly b. Oligopoly
c. Monopolistic competition d. Duopoly
68. Monopolistic competition
a. Less mobility b. Mobility
c. Both d. None

69. Under monopolistic competition

a. Lack of perfect knowledge b. Free entry
c. Free exit d. All the above

70. Differentiate product is a condition under

a. Monopoly b. Oligopoly
c. Both d. None

71. Products are having close substitute under

a. Monopoly b. Oligopoly
c. Duopoly d. Monopolistic Competition

72. Selling cost also called

a. Sales promotion cost b. Production cost
c. Both d. None

73. Selling cost can alter

a. Demand curve b. Supply curve
c. Revenue curve d. None

74. Oligopoly means

a. Few sellers b. Two seller
c. Three seller d. None

75. Price rigidity under

a. Duopoly b. Monopoly
c. Oligopoly d. None

76. Duopoly means

a. Two sellers b. Three sellers
c. Four sellers d. None

77. Bilateral monopoly means

a. Single seller single buyer b. Single seller
c. Single buyer d. None

78. Collusive oligopoly means

a. Agreement among the seller b. Non-agreement
c. Both d. None

79. Non-collusive oligopoly means

a. There is no agreement b. Agreement
c. Both d. None
80. There is no cost under
a. Oligopoly b. Duopoly
c. Both d. None

81. Factor price means

a. Remuneration to the factor service b. Remuneration to the product
c. Both d. None

82. What is marginal product?

a. Additional made to the total product b. Total product
c. Both d. None

83. MPP means

a. Marginal physical product b. Marginal price product
c. Both d. None

84. Marginal productivity of labour always

a. Decline b. Increase
c. Decrease d. None

85. Rent is a payment to the

a. Land b. Labour
c. Capital d. Organisation

86. Different surplus of land is called

a. Rent b. Quasi rent
c. Both d. None

87. Quasi rent is

a. Short period differential surplus b. Temporary surplus
c. Both d. None

88. Original indestructible power of the soil earn

a. Rent b. Wage
c. Interest d. None

89. Rent is a
a. Differential surplus b. Surplus
c. Both d. None

90. Price paid to the land is called

a. Rent b. Wage
c. Interest d. Profit

91. Short period differential surplus is called

a. Quasi rent b. Rent
c. Both d. None

92. Wage is paid to the

a. Labour b. Land
c. Capital d. None
93. Iron law of wage is called
a. Subsistence wage b. Minimum wage
c. Both d. None

94. Subsistence wage theory propounded by

a. David Ricardo b. Malthus
c. Both d. None

95. Wage found theory propounded by

a. David Ricardo b. Malthus
c. Both d. Adam Smith & J.S. Mill

96. The found size decides the demand for the labour
a. Wage b. Wage found
c. Interest d. None

97. Interest is a price paid to

a. Capital b. Land
c. Profit d. None

98. Liquidity preference theory was propounded

a. Keynes b. Malthus
c. Both d. None

99. Profit is a remuneration paid to the

a. Organiser b. Capital
c. Interest d. Land

100. Innovation theory propounded by

a. Schumpeter b. David Ricardo
c. Both d. None

101. A consumer’s demand curve can be obtained from

a. Income-consumption Curve b. Engel’s curve
c. Price-consumption Curve d. None of these

102. Gossen’s first law is also called as

a. Law of substitutions b. Law of equi-marginal utility
c. Law of diminishing Marginal utility d. Law of Indifference

103. Ordinal approach is based on

a. Utility could not measured in cardinal numbers b. Utility could not measured in ordinal numbers
c. Both d. None of these

104. The economic analysis which expects consumers to behave in a

a. Rational b. Irrational
c. Emotional d. Indifferent

105. The law of equi-marginal utility states that

a. More units of it will be bought b. Less units of it will be bought
 c. Same units of it will be bought d. Nothing of it will be bought

106. An Indifference curve is always

a. Concave to the origin b. Convex to the origin
c. A vertical straight line d. A horizontal straight line

107. Under law of variable proportion stage-1 is known as

a. Stage of diminishing returns b. Stage of negative returns
c. Stage of constant returns d. Stage of increasing returns

108. Equilibrium price is the price at which

a. Quantity demand equals quantity supplied b. Quantity demand exceeds quantity supplied
c. Quantity demand equals quantity demand d. None of these

109. Under perfect competition which of the following is true?

1. MC=P 2. MC>P 3. MC<P 4. None of these
a. 1 and 3 only b. 4 only
c. 1 only d. 3 only

110. Market demand is

a. Sum of all the individuals demand b. demand at prevailing prices
c. demand in a perfectly free market d. None of these

111. In the case of Giffen goods a fall in price leads to

a. Makes the demand remains constant b. Reduce the demand
c. Increase the demand d. None of the above

112. When the law of demand operates the demand curve

a. slopes downwards from left to right b. slopes upward from left to right
c. slopes upward from right to left d. None

113. Normally, when price falls

a. Quantity demanded increases b. Quantity demanded decreases
c. Quantity demanded remains constant d. None of these happens

114. Responsiveness of demand to changes in its price

a. Income elasticity of demand b. Price elasticity of demand
c. Cross elasticity of demand d. None of these

115. The law of demand refers to

a. Price-supply relationship b. Price-cost relationship
c. Price-demand relationship d. Price-income relationship

116. When there is decrease in demand the demand curve

a. Moves upward towards to the axis b. Moves downwards towards to the axis
c. Remains unchanged d. None of the above

117. Two goods have to be consumed simultaneously are

a. Identical b. Complementary
c. Substitutes d. None of these
118. An exceptional demand curve slopes
a. Upwards to the right b. Downwards to the right
c. Both d. None

119. Which one of the following is true in case of normal goods?

a. When Price increases, demand also increases b. When Price increases, demand decreases
c. When Price remains constant, demand falls d. When price falls down, demand remains
constant

120. Economic costs consists of

a. Both explicit and Implicit cost b. only Implicit cost
c. only explicit cost d. None of these

121. Under law of variable proportions

a. All factors are vary b. No factor is vary
c. some factors fixed and one factor is vary d. None of these

122. In the II-stage of variable proportion

a. Both MP and AP increases b. Both Mp and AP diminishes
c. MP increases and AP diminishes d. AP increases and MP diminishes

123. Cost which is neither increased or decreased is a

a. Fixed cost b. Variable cost
c. Marginal cost d. None of these

124. On an indifference map higher indifference curves shows

a. Same level of satisfaction b. Optimum level of satisfaction
c. Higher level of satisfaction d. None of these

125. Match the following

(a) Cardinal approach – 1.Marginal utility

(b) Ordinal approach – 2. Indifference curve
(c) Hicks-Allen approach - 3.Alfred Marshall
(d) Consumer surplus – 4.revealed preference theory

a. 1 4 2 3 b. 1 2 3 4
c. 4 3 2 1 d. 3 2 1 4

126. TU n – TU (n-1) is the formula of

a. Total Utility b. Marginal Utility
c. Cardinal utility d. None of these

127. Which of the following creates time utility?

a. Farmer b. Trader
c. Carpenter d. Driver

128. Total Utility can be found by

a. Adding up the MU of all units b. Multiplying all the units by its MU
c. Multiplying price by number of units d. None of these
129. Iso-quant refers to
a. Another name of Indifference curve b. The production Indifference curve
c. An equal quantity curve of a consumer d. An equal cost curve of a producer

130. The word micro is derived from

a. Latin b. Hindi
c. French d. Greek

131. Which of the following statement is true?

a. All costs are fixed in the short run b. All costs are variable in the long run
c. All costs are variable in the short run d. All costs are fixed in the long run

132. According to Robbins, ‘Means’ are

a. Scarce b. Unlimited
c. Undefined d. All of these

133. Which of the following falls under micro economics?

a. National Income b. General price level
c. Factor Pricing d. National savings and Investment

134. Normative economics deals with

a. Facts b. Opinions
c. Both a and b d. None of the above

135. Resources for satisfying human wants are

a. Limited b. Unlimited
c. Available at 0 price d. None of these

136. Example of Microeconomic variable is

a. Wholesale price index b. National Income
c. Market Demand d. Aggregate Demand

137. Under Inductive method, the logic proceeds from

a. General to Particular b. Particular to General
c. Both a and b d. None of these

138. Human Wants are

a. Few b. Countable
c. Innumerable d. one thousand

139. Goods which can satisfy human wants are

a. Consumer Goods b. Capital Goods
c. Social Goods d. Public Goods

140. Goods which are used to produce more good

a. Consumer Goods b. Capital Goods
c. Social Goods d. Public Goods

141. The term ‘Marginal’ in economics refers to

a. Unimportant b. Additional
c. Minimum Unit d. Just barely passing
142. ‘Utility’ is most closely related to
a. Useful b. Useless
c. Satisfaction d. Necessary

143. Which of the following will not be the income of a person?

a. Wages b. Profit
c. Scholarship d. Salary

144. Food, Shelter and Clothing are

a. Necessaries b. Comfort
c. Luxuries d. None of these

145. The method to measure elasticity of demand is:

a. Percentage b. Total Outlay
c. Geometric d. All of the above

146. If a change in demand is brought by a change in income it is

a. Income elasticity b. Price elasticity
c. Cross elasticity d. Arc elasticity

147. If we know that quantities bought and sold are equal, we conclude that
a. Quantity demand and supplied are also equal b. The market is on equilibrium
c. There will be no tendency for a price change d. All of the above

148. Price of a product is determined in a free market

a. By Demand for the product b. By Supply of the product
c. By Both Demand and Supply d. By the government

149. Market equilibrium means a situation where

a. Qs = Qd b. Qs = Qp
c. Qd = Qp d. Qq = Qp

150. If Potential price is Rs.375 and the actual price is Rs.200, then consumer surplus is
a. Rs. 375 b. Rs. 175
c. Rs.200 d. Rs. 50

Answer with Expansion:

1. d. Place where the buyer and seller meet
2. a. Price
3. a. Market
4. b. Marketing
5. a. Size of the Market
6. b. Value
7. b. Perishable
8. c. Secular Period
9. b. Maximum Profit
10. a. Addition made to the total cost
11. a. MC
12. a. MR
13. b. Firm
14. a. MR
15. a. AFC
16. b. AVC
17. b. AR
18. b. ATC
19. a. MR
20. a. Maximum Profit
21. b. Market Price
22. c. Both
23. a. Perfect Competition
24. c. Both
25. b. Short Period
26. a. Situation
27. a. Perfect Competition
28. a. Short Period
29. b. Perfect Competition
30. b. Perfect Competition
31. b. Homogeneous
32. b. Perfect Competition
33. d. All the above
34. a. Perfect Competition
35. c. Both
36. a. Perfect Competition
37. a. Below
38. a. Perfect Competition
39. b. Normal Profit
40. a. Excess Demand
41. a. Single Seller
42. b. Seller
43. a. Greek Root
44. a. Private
45. a. Under Govt. Man date
46. c. Both
47. a. Single Supplier in a Market
48. a. Different Prices to Different Buyers
49. a. Monopoly Power Means
50. b. Two
51. a. Profit
52. a. Under Monopoly
53. a. Monopolist
54. a. True
55. b. True
56. a. Fact
57. a. Place Distribution
58. a. Price Discrimination
59. a. Price is Low in the International
60. a. Homogeneous
61. a. Perfect
62. d. Monopolistic Competition
63. c. Both
64. b. Indeterminate
65. a. Monopolistic Competition
66. d. Monopolistic Competition
67. c. Monopolistic Competition
68. a. Less Mobility
69. d. All the above
70. d. None
71. d. Monopolistic Competition
72. a. Sales Promotion Cost
73. a. Demand Curve
74. a. Few Sellers
75. c. Oligopoly
76. a. Two Sellers
77. a. Single Seller
78. a. Agreement Among
79. a. There is no Agreement
80. d. None
81. a. Remuneration to the Factor Service
82. a. Addition Made to the Total Product
83. a. Marginal Physical Product
84. a. Decline
85. a. Land
86. a. Rent
87. c. Both
88. a. Rent
89. a. Differential Surplus
90. a. Rent
91. a. Quasi Rent
92. a. Labour
93. c. Both
94. c. Both
95. d. Adam Smith & J.S.Mill
96. b Wage Found
97. b. Land
98. a. Keynes
99. a. Organiser
100. a. Schumpeter
101. c. Price-consumption Curve
102. c. Law of diminishing Marginal utility
103. a. Utility could not measured in cardinal numbers
104. a. Rational
105. a. More units of it will be bought
106. b. Convex to the origin
107. d. Stage of increasing returns
108. a. Quantity demand equals quantity supplied
109. c. 1 only
110. a. Sum of all the individuals demand
111. b. Reduce the demand
112. a. slopes downwards from left to right
113. a. Quantity demanded increases
114. b. Price elasticity of demand
115. c. Price-demand relationship
116. b. Moves downwards towards to the axis
117. b. Complementary
118. a. Upwards to the right
119. b. When Price increases, demand decreases
120. a. Both explicit and Implicit cost
121. c. some factors fixed and one factor is vary
122. b. Both Mp and AP diminishes
123. a. Fixed cost
124. c. Higher level of satisfaction
125. a. 1 4 2 3
126. b. Marginal Utility
127. b. Trader
128. a. Adding up the MU of all units
129. a. Another name of Indifference curve
130. d. Greek
131. b. All costs are variable in the long run
132. a. Scarce
133. c. Factor Pricing
134. b. Opinions
135. a. Limited
136. c. Market Demand
137. b. Particular to General
138. c. Innumerable
139. a. Consumer Goods
140. b. Capital Goods
141. b. Additional
142. c. Satisfaction
143. c. Scholarship
144. a. Necessaries
145. d. All of the above
146. a. Income elasticity
147. d. All of the above
148. c. By Both Demand and Supply
149. a. Qs = Qd
150.