REVISION EXERCISE

tiple Choice Questions (MCQs)

.Producer's Equilibrium under MR-MC approach is achieved when:
(a) MR= MC clohoos (b) MC> MR after the equality between MR and MC
(c) Either (a) or (b) (d) Both (a) and (b)
2
refers toasituation when a firm has no intention to expand or contract the output.
(a) Producer's Equilibrium (b) Market Equilibrium
(o) Consumer's Equilibrium (d) None of these
8.12

produciIntrnogducthen
tory isMicroecon mie
3. Excess of receipts from sale of goods over expenditure incurred on
(a) Average Revenue (b) Revenue
(c) Profits (d) Marginal Revenue
4. Producer is not at equilibrium when MC > MR because:
ler med as.
(a) Profits can be increased by producing more (b) Benefit is less than
(c) Both (a) and (b) (d) None of these
cost
5. The following diagram correctly depicts the producer's equilibrium in case of
(a) (b) (c) constant prices.
(d)
o MC

MC MC
R
-MR B

MR MR

Output (in units) Ol Output (in units) Output (in units) MP

Output (in units)
6. In the folowing schedule, producer's equilibrium is at
Output (Units) 1 2 3

MR) 10 10 10 10 10

MC ) 12 10 10 15

(a) 2 units (b) 4 units

(c) 3 Units (d) 5 units
(7)If MRis more than MC at a particular level of output, then producer will:
(a) Reduce production (b) Increase production
(c) Keep the production at current level (d) None of these

8. In the following diagram, producer's equilibrium is achieved at point

Revenue
and
Cost

(in
T)
MC
-MR

X
Output (in units)
(a) K (b) L
(c) Both (a) and (b) (d) Neither (a) nor (b)
9. Producer's equilitbrium refers to stage of that output level when:
(a) Firm earns maximum profits
(b) Firm bears minimum losses
(c) Firm has no inclination to expand or contract the output
(d) All of these
10. In case of perfect competition, a firm is in equilibrium when: from below
(a) MC= MR (b) MC cuts MR
(c) MC is rising when it cuts MR (d) Allof these
 Equilibrium 8.13
firnm diminishes
when exceeds
of a
Revenue,Marginal Cost (b) Marginal Cost, Marginal
profits
(a) Marginal
The
1L. Revenue Average Cost (d)
Average Revenue, Average Cost
Revenue
Marginal Marginal
MC and Revenue
= MR, then for achieving
(b) MC Curve shouldequilibrium
c)
IMarginal Cost = output:
should cut MR Curve from above cut MR Curve frorn below
Curve
2 MC
should not cut MR Curve at all (d) MCCurve should be tangent to MR
(a)
MC Curve (in)
then Curve
(c) fallswith rise in output, Producer's Equilibrium is achieved at:
price
When Cost
13. MC
andPLF
Revenue

MR

M X
Output (in units)
(a) PointE (b) PointFDnte
Both(a) and (b) (d) Neither (a) nor (b)
(c)
Ans. 1. (d); 2. (a); 3. (c); 4. (b);5. (a);6. (b);7. (b); 8. (b); 9. (d); 10. (d); 11. (b); 12. (b); 13. (a)