Economics MCQs

Page No. 276

An increase in national income is ?


aLikely in increase exports

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bLikely to decrease savings

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c Likely to decrease investment

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dLikely to increase spending on imports

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Companies in the private sector are owned by ?


aThe government

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b Shareholders

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cEmployees

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dThe community

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View Answer Employees

Normal profit occurs when ?


a Average revenue equals average variable cost

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bMarginal revenue equals marginal cost

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c Average revenue equals marginal cost

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d Average revenue equals average cost

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To be allocatively efficient a firm must produce where ?


a The total cost equals demand

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b The average revenue equals the marginal revenue

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c The price equals the average cost

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dThe price equals the marginal cost

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Profit is measured by ?


aRevenue – fixed costs

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b Fixed cost + revenue

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cRevenue – sales

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d Revenue – total costs

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To maximise sales revenue a firm should produce where ?


aMarginal cost is zero

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bMarginal revenue is maximised

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cMarginal revenue is zero

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d Marginal revenue equals marginal cost

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Barriers to entry ?


a Enable abnormal profits to be made in the long run

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bEnable losses to be made in the long run

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cEnable abnormal profits to be made in the short run only

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dOccur in perfect competition

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In perfect price discrimination ?


a The demand curve is the marginal cost curve

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b The average revenue equals the average cost

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cThe marginal cost is the average cost curve

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dThe demand curve is the marginal revenue

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For a firm operating in two markets and price discriminating the profit maximising condition is ?


aMarginal revenue in A= Price B

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bMarginal revenue in A = Marginal revenue B = Price A = Price B

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cMarginal revenue in A = Marginal revenue B = Marginal cost

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dMarginal revenue in A = Marginal revenue B = Average cost

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If marginal revenue equals marginal cost ?


aNo profit is being made

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bTotal revenue equals total cost

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cProfits are maximised

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d Producing another unit would increase profits

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View Answer Profits are maximised

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