1.  The kinked demand curve explains

a

  Demand flexibility

b

 Demand rigidity

c

 Price flexibility

d

 Price rigidity

Answer & Explanation
Answer : Option D

2.  Law of diminishing marginal utility is based on the assumption that

a

  Tastes change over time

b

 Consumption is continuous

c

 Different units of goods consumed are homogeneous

d

 None of these

Answer & Explanation
Answer : Option A

3.  The Law of Diminishing Returns depends on the assumption that

a

  Total output is constant

b

 Land is the factor kept constant

c

 The state of technical knowledge is unchanged

d

 Average output declines faster than marginal output

Answer & Explanation
Answer : Option C

4.  How many sellers are present in duopoly?

a

  1

b

 2

c

 3

d

 No limit

Answer & Explanation
Answer : Option B

5.  Imperfect competition arises when

a

  Product variation, ignorance of consumers and distance and transport costs lead to imperfections in the competitive market which operates on certain assumptions

b

 There are unexplainable imperfections in the market

c

 There is imperfect rivalry among competitors

d

 Competition does not exist

Answer & Explanation
Answer : Option A

6.  Monopolistic competition constitutes

a

  Many firms producing differentiated product

b

 Many firms producing close substitutes

c

 Single firm producing close substitutes

d

 None of these

Answer & Explanation
Answer : Option A

7.  'Kinked' demand curve is related with

a

  Oligopoly

b

 Monopoly

c

 Perfect competition

d

 Discriminating monopoly

Answer & Explanation
Answer : Option A

8.  Law of diminishlng marginal rate of substitution is associated with

a

  Hicks

b

 Keynes

c

 Slutsky

d

 Marshall

Answer & Explanation
Answer : Option A

9.  Laws of increasing and constant returns are temporary phase of

a

  Law of proportionality

b

 Law of Diminishing Utility

c

 Law of variable proportion

d

 Law of Diminishing Return

Answer & Explanation
Answer : Option C

10.  The difference between monopoly equilibrium and competitive equilibrium is

a

  There is no difference at all

b

 Under perfect competition, the MC = MR whereas under monopolistic conditions this need not be the case

c

 The MC should rise at the point of equilibrium under perfect competition whereas under monopoly it can rise, fall or remain constant

d

 None of the above

Answer & Explanation
Answer : Option C

11.  Which subject is relevant to the study of consumer behaviour?

a

  Sociology

b

 Economics

c

 Psychology

d

 All of these

Answer & Explanation
Answer : Option D

12.  Cartels is a form of

a

  Monopoly

b

 Collusive oligopoly

c

 Non-Collusive oligopoly

d

 None of these

Answer & Explanation
Answer : Option B

13.  The imposition of a ceiling on a monopolist's price will affect his

a

  Profits only

b

 Equilibrium output only

c

 Equilibrium output and profits

d

 Average revenue in the short-run only

Answer & Explanation
Answer : Option C

14.  The size of a monopolist's plant and the degree of utilisation of any given plant size, depend entirely on the

a

  Factor price

b

 Market Supply

c

 Market demand

d

 Price of the good

Answer & Explanation
Answer : Option C

15.  The Law of Dirninishing Returns is applied to all fields of production was stated by

a

  Walras

b

 David Ricardo

c

 C. Pigou

d

 Alfred Marshall

Answer & Explanation
Answer : Option D

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