Economics MCQs

Page No. 276

An increase in national income is ?


aLikely in increase exports


bLikely to decrease savings


c Likely to decrease investment


dLikely to increase spending on imports



Companies in the private sector are owned by ?


aThe government


b Shareholders


cEmployees


dThe community


View Answer Employees

Normal profit occurs when ?


a Average revenue equals average variable cost


bMarginal revenue equals marginal cost


c Average revenue equals marginal cost


d Average revenue equals average cost



To be allocatively efficient a firm must produce where ?


a The total cost equals demand


b The average revenue equals the marginal revenue


c The price equals the average cost


dThe price equals the marginal cost



Profit is measured by ?


aRevenue – fixed costs


b Fixed cost + revenue


cRevenue – sales


d Revenue – total costs



To maximise sales revenue a firm should produce where ?


aMarginal cost is zero


bMarginal revenue is maximised


cMarginal revenue is zero


d Marginal revenue equals marginal cost



Barriers to entry ?


a Enable abnormal profits to be made in the long run


bEnable losses to be made in the long run


cEnable abnormal profits to be made in the short run only


dOccur in perfect competition



In perfect price discrimination ?


a The demand curve is the marginal cost curve


b The average revenue equals the average cost


cThe marginal cost is the average cost curve


dThe demand curve is the marginal revenue



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


aMarginal revenue in A= Price B


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


cMarginal revenue in A = Marginal revenue B = Marginal cost


dMarginal revenue in A = Marginal revenue B = Average cost



If marginal revenue equals marginal cost ?


aNo profit is being made


bTotal revenue equals total cost


cProfits are maximised


d Producing another unit would increase profits


View Answer Profits are maximised

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