Economics MCQs

Page No. 252

The reason for the kinked demand curve is that ?


aThe oligopolist believes that competitors will match output increase but not output reduction


bThe oligopolist believes that competitors will match price increase but not output reduction


cThe oligopolist believers that competitors will match price cuts but not price rises


d The oligopolist believes that competitors will match price increase but not output increase



A natural monopoly has a declining _______ over a large range of output?


a long run marginal cost


b short run marginal cost


c long run average cost


dlong run marginal cost



A monopoly may be self-perpetuating because profits may be used for ?


aresearch


b cost-saving


ctechnical advance


dall of the above


View Answer all of the above

Comparing a monopoly and competitive firm, the monopolist will ?


aproduce less at a lower price


bproduce more at a lower price


cproduce less at a higher price


d produce less at a lower price



Where a tax can be shifted, the incidence depends on ?


aWhether there is perfect or imperfect information


belasticities of demand and supply


chow many producers there are:


d who is legally obliged to pay the tax



Economists use the term Black Markets for situations where ?


agoods are sold at prices above legal or official price.


bbuyers and/or sellers are not paying taxes as they should


cillegal substances are sold


dtransactions are not recorded in the GDP figures.



If the market price is below the equilibrium price ?


a quantity demanded will be greater than quantity supplied


b quantity demanded will be less than quantity supplied


cdemand will be less than supply.


dquantity demanded will equal quantity supplied .



It is necessary to ration a good whenever ?


asupply exceeds demand


b a surplus exists


cthere is perfectly inelastic demand for the good


ddemand exceeds supply


View Answer demand exceeds supply

A price ceiling is ?


aa maximum price usually set by government that sellers may charge for a good


b the different between the initial equilibrium price and the equilibrium price after a decrease in supply


c a minimum price usually set by government that sellers must charge for a good


d a minimum price that consumers are willing to pay for a good.



Nationalisation occurs when ?


a The government sells assets to a the private sector


bThe government bans a product


cThe government takes control of an industry


dThe government taxes a product to a raise its price



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