Veerendra – Page 32

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January 14, 2022

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January 14, 2022

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January 14, 2022

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MCQ Questions for Class 11 Economics Chapter 4 The Theory of the Firm under Perfect Competition with Answers

The Theory of the Firm under Perfect Competition Class 11 MCQ Online Test With Answers Questions

January 14, 2022

Check the below NCERT MCQ Questions for Class 11 Economics Chapter 4 The Theory of the Firm under Perfect Competition with Answers Pdf free download. MCQ Questions for Class 11 Economics with Answers were prepared based on the latest exam pattern. We have provided The Theory of the Firm under Perfect Competition Class 11 Economics MCQs Questions with Answers to help students understand the concept very well.

Class 11 Economics Chapter 4 The Theory of the Firm under Perfect Competition MCQ With Answers

Economics Class 11 Chapter 4 MCQs On The Theory of the Firm under Perfect Competition

MCQ Questions For Class 11 Statistics Economics Chapter 4 Question 1.
The concept of supply curve is relevant only for?
(a) Monopoly
(b) Monopolistic competition
(c) Perfect competition
(d) Oligopoly

Answer

Answer: (c) Perfect competition

Under Perfect Competition A Firm Can Produce With MCQ Question 2.
Which of the following is an example of perfect competition?
(a) Agriculture
(b) Banking sector
(c) Car manufacturing
(d) Railways

Answer

Answer: (a) Agriculture

In Perfect Competition MCQ Class 11 Chapter 4 Question 3.
Can MR be negative or zero.
(a) Yes
(b) Can’t say
(c) No
(d) Only negative but not zero

Answer

Answer: (a) Yes

MCQ On Perfect Competition Class 11 Chapter 4 Question 4.
If all units are sold at same price how will it affect AR and MR?
(a) B. AR > MR
(b) A. AR = MR
(c) D. AR + MR = 0
(d) C. AR < MR

Answer

Answer: (b) A. AR = MR

Under Perfect Competition MCQ Class 11 Chapter 4 Question 5.
What is price line
(a) The demand curve
(b) The AR curve
(c) The MR curve
(d) The TR curve

Answer

Answer: (c) The MR curve

Class 11 Economics Chapter 4 MCQ Question 6.
Can TR be a horizontal Straight line?
(a) May be
(b) Can’t say
(c) Yes
(d) No

Answer

Answer: (d) No

Perfect Competition MCQ Class 11 Chapter 4 Question 7.
The revenue of a firm per unit sold is its
(a) MR
(b) AR
(c) TR
(d) TC

Answer

Answer: (b) AR

Question 8.
The product of AR and price at every unit sold is the firm’s
(a) TR
(b) TVC
(c) MR
(d) AR

Answer

Answer: (a) TR

Question 9.
In perfect competition, in the long run, ______________?
(a) There are large profits for the firm
(b) There is no profit and no loss for the firm
(c) There are negligible profits for the firm
(d) There are large losses for the firm

Answer

Answer: (b) There is no profit and no loss for the firm

Question 10.
In perfect competition, when the marginal revenue and marginal cost are equal, profit is?
(a) Maximum
(b) Zero
(c) Negative
(d) Average

Answer

Answer: (a) Maximum

Question 11.
In perfect competition, a firm earns profit when __________ exceeds the _____________?
(a) Total revenue, total fixed cost
(b) Marginal cost, marginal revenue
(c) Average revenue, average cost
(d) Total cost, total revenue

Answer

Answer: (c) Average revenue, average cost

Question 12.
In the perfectly competitive market, in the long run, competitive prices equal the minimum possible ________ cost of good?
(a) Average
(b) Total
(c) Variable
(d) Marginal

Answer

Answer: (a) Average

Question 13.
In perfect competition, in the long run, if a new firm enters the industry the supply curve shifts to the right resulting in_________?
(a) Reduction in supply
(b) No change in price
(c) Fall in price
(d) Rise in price

Answer

Answer: (c) Fall in price

Question 14.
Which of the following type of competition is just a theoretical economic concept, not a realistic case where actual competition and trade take place?
(a) Monopolistic competition
(b) Monopoly
(c) Oligopoly
(d) Perfect competition

Answer

Answer: (d) Perfect competition

Question 15.
In perfect competition, which of the following curves generally lies below the demand curve and slopes downward?
(a) Average revenue
(b) Average cost
(c) Marginal revenue
(d) Marginal cost

Answer

Answer: (c) Marginal revenue

Question 16.
A firm can sell as much as it wants at the market price. The situation is related to?
(a) Monopoly
(b) Monopolistic competition
(c) Perfect competition
(d) Oligopoly

Answer

Answer: (c) Perfect competition
Explanation:
Pure or perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product (the product is a “commodity” or “homogeneous”). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices.

Question 17.
Globalization has made Indian Market as?
(a) Seller market
(b) Buyer market
(c) Monopsony market
(d) Monopoly market

Answer

Answer: (b) Buyer market
Explanation:
Globalisation is the rapid integration or interconnection between countries mostly on the economic plane. In other words Globalisation means integrating our economy with the world economy. Movement of people between countries increases due to globalisation.

Question 18.
When AR = Rs. 10 and AC = Rs. 8, the firm makes?
(a) Gross profit
(b) Super normal profit
(c) Normal profit
(d) Net profit

Answer

Answer: (b) Super normal profit
Explanation:
Super normal profit is defined as extra profit above that level of normal profit.
Here the firm earns profit of Rs. 2 over the cost occurred.

Question 19.
A competitive firm in the short run incurs losses. The firm continues production, if?
(a) P = AVC
(b) P > AVC
(c) P < AVC
(d) P > = AVC

Answer

Answer: (d) P > = AVC
Explanation:
With loss minimization, price exceeds average variable cost but is less than average total cost at the quantity that equates marginal revenue and marginal cost. In this case, the firm incurs a smaller loss by producing some output than by not producing any output.

Question 20.
In the long run the market price of a commodity is equal to its minimum average cost of production under the___________?
(a) Monopolist competition
(b) Perfect competition
(c) Oligopoly
(d) Monopoly

Answer

Answer: (b) Perfect competition
Explanation:
Perfect competition is an industry structure in which there are many firms producing homogeneous products. None of the firms are large enough to influence the industry. In the long-run, companies that are engaged in a perfectly competitive market earn zero economic profits.

The long-run equilibrium point for a perfectly competitive market occurs where the demand curve (price) intersects the marginal cost (MC) curve and the minimum point of the average cost (AC) curve. Since they are the price takers and the price remains constant so does the AC of production.

Question 21.
While a seller under perfect competition equates price and MC to maximize profits a monopolist should equate?
(a) MR and MC
(b) AR and MR
(c) AR and MC
(d) TC and TR

Answer

Answer: (a) MR and MC
Explanation:
In a monopolistic market, there is only one firm that produces a product. There is absolute product differentiation because there is no substitute.

The marginal cost of production is the change in the total cost that arises when there is a change in the quantity produced.

The marginal revenue is the change in the total revenue that arises when there is a change in the quantity produced a firm maximizes its total profit by equating marginal cost to marginal revenue and solving for the price of one product and the quantity it must produce.

Question 22.
Marginal revenue in any competitive situation is?
(a) TR_n – P_n-1
(b) TR_n – TR_n-1
(c) TR_n / Q_n-1
(d) None of above

Answer

Answer: (b) TR_n – TR_n-1
Explanation:
Marginal revenue (MR) can be defined as additional revenue gained from the additional unit of output. Marginal revenue is the change in total revenue which results from the sale of one more or one less unit of output.

Formula:
Total revenue = TR
Total Unit = n
Total Unit less one unit = n – 1
MR = TR_n -TR_n-1

Question 23.
A rational consumer is a person who?
(a) Has perfect knowledge of the market
(b) Is not influenced by persuasive advertising
(c) Behaves at all times, other things being equal, in a judicious manner
(d) Knows the prices of goods in different market and buys the cheapest

Answer

Answer: (a) Has perfect knowledge of the market
Explanation:
A rational consumer is considered to be that person who makes rational consumption decisions.

In other words, the consumer who makes his choices after considering all the other alternative goods (and services) available in the market is called a rational consumer.

Question 24.
In which of the following types of market structures, are resources, assumed to be mobile?
(a) Oligopoly
(b) Perfect competition
(c) Monopolistic competition
(d) Monopoly

Answer

Answer: (b) Perfect competition
Explanation:
Pure or perfect competition is a theoretical market structure in which the following criteria are met:
1. All firms sell an identical product (the product is a “commodity” or “homogeneous”).
2. All firms are price takers (they cannot influence the market price of their product).
3. Market share has no influence on prices.
4. Buyers have complete or “perfect” information in the past, present and future about the product being sold and the prices charged by each firm.
5. Resources for such a labor are perfectly mobile.
6. Firms can enter or exit the market without cost.

Question 25.
At producer’s equilibrium when MR = MC, the firm earns only
(a) Abnormal loss
(b) Abnormal profit
(c) Normal Profit
(d) Normal loss

Answer

Answer: (c) Normal Profit

Question 26.
Beyond producer’s equilibrium when MR<MC, the firm earns only
(a) Abnormal profit
(b) Normal loss
(c) Abnormal loss
(d) Normal Profit

Answer

Answer: (c) Abnormal loss
Explanation:
Marginal Cost < Marginal Revenue means abnormal loss situation, where the total revenue of a business does not cover total cost incurred for the business, due to which the profits of the business are below normal limits.

Question 27.
Before producer’s equilibrium when MR > MC, the firm earns only
(a) Normal Profit
(b) Normal loss
(c) Abnormal loss
(d) Abnormal profit

Answer

Answer: (d) Abnormal profit
Explanation:
If a firm makes more than normal profit it is called super-normal profit. Super normal profit is also called economic profit, and abnormal profit, and is earned when total revenue is greater than the total costs.
Total profits = total revenue (TR) – total costs (TC)
Abnormal Profit = MR > MC

Question 28.
A producer’s equilibrium is a situation when
(a) AR = MR
(b) MR = MC
(c) AR = AC
(d) TR = TC

Answer

Answer: (b) MR = MC
Explanation:
Producer’s equilibrium refers to a situation where profits are maximised, i.e., the difference between total revenue and total cost is maximised, or in cases of losses, the difference is minimised, so as to minimise losses.

Question 29.
The elasticity at a point on a straight line supply curve passing through the origin will be
(a) 3.0
(b) 1.0
(c) 4.0
(d) 2.0

Answer

Answer: (b) 1.0
Explanation:
Regardless of the gradient of the linear supply curve or its position on the supply curve, the PES of a linear supply curve that passes through the origin is always equal to 1. Therefore, if the supply curve originates with P = 0 and Q = 0, the elasticity will always be 1.

Formula:
% Change in quantity
% Change in price.

Question 30.
The elasticity at a point on a straight-line supply curve passing through the origin making an angle of 45° will be
(a) 4.0
(b) 2.0
(c) 3.0
(d) 1.0

Answer

Answer: (d) 1.0

Question 31.
Under perfect competition the number of firms
(a) Is about 10
(b) Are many but limited
(c) Is large
(d) Is limited

Answer

Answer: (c) Is large

Question 32.
When ___________, the firms are earning just normal profit:
(a) AC = AR
(b) MC = AC
(c) AR = MR
(d) MC = MR

Answer

Answer: (a) AC = AR
Explanation:
AC = AR means the firm’s cost and revenue are equal which means the firm does not earn any profit or no loss, which means the firm is earning normal profit.

Question 33.
Which of the following is the condition for equilibrium of a firm?
(a) MC curve must cut MR curve from above
(b) MR = MC
(c) None of above
(d) Both of these

Answer

Answer: (b) MR = MC
Explanation:
A firm is in equilibrium when it is satisfied with its existing level of output. The firm wills, in this situation produce the level of output which brings in greatest profit or smallest loss. When this situation is reached, the firm is said to be in equilibrium.

Marginal cost should be equal to marginal revenue, then only the firm can be called at equilibrium.

Question 34.
In perfect competition, since the firm is a price taker, the ________ curve is straight line
(a) Total cost
(b) Marginal cost
(c) Total revenue
(d) Marginal revenue

Answer

Answer: (d) Marginal revenue
Explanation:
Marginal revenue is the extra revenue generated when a perfectly competitive firm sells one more unit of output. The marginal revenue received by a firm is the change in total revenue divided by the change in quantity.

Perfect competition is a market structure with a large number of small firms, each selling identical goods. Perfectly competitive firms have perfect knowledge and perfect mobility into and out of the market. These conditions mean perfectly competitive firms are price takers, they have no market control and receive the going market price for all output sold.

Since they are the price takers and have no control over price but just the production, so even if they increase their quantity of production, still the price will remain constant and so does the marginal revenue.

Question 35.
Other name by which average revenue curve known:
(a) Indifference curve
(b) Profit curve
(c) Average cost curve
(d) Demand curve

Answer

Answer: (d) Demand curve
Explanation:
Average revenue curve is often called the demand curve due to its representation of the product’s demand in the market. Each point on the curve represents the price of the product in the market. Price determines the demand for a product, hence Average revenue curve is also demand curve. Assuming it is a perfect competitive market.

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Class 11 Microeconomics MCQ:

MCQ Questions for Class 11 Economics Chapter 3 Production and Costs with Answers

Production and Costs Class 11 MCQ Online Test With Answers Questions

January 14, 2022

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Class 11 Economics Chapter 3 Production and Costs MCQ With Answers

Economics Class 11 Chapter 3 MCQs On Production and Costs

Class 11 Economics Chapter 3 MCQ Question 1.
In production function, production is a function of:
(a) Price
(b) Factors of Production
(c) Total Expenditure
(d) None of these

Answer

Answer: (b) Factors of Production

MCQ Questions For Class 11 Economics Chapter 3 Question 2.
The basic reason of operating the Law of Diminishing Returns is:
(a) Scarcity of Factors
(b) Imperfect Substitution between Factors
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Chapter 3 Economics Class 11 MCQ Question 3.
Which of the following explains the short-run production function ?
(a) Law of Demand
(b) Law of Variable Proportion
(c) Returns to Scale
(d) Elasticity of Demand

Answer

Answer: (b) Law of Variable Proportion

Economics Class 11 Chapter 3 MCQ Question 4.
Long-run production function is related to:
(a) Law of Demand
(b) Law of Increasing Returns
(c) Laws of Returns to Scale
(d) Elasticity of Demand

Answer

Answer: (c) Laws of Returns to Scale

Question 5.
In which stage of production a rational producer likes to operate in shot-run production ?
(a) First Stage
(b) Second Stage
(c) Third Stage
(d) None of these

Answer

Answer: (b) Second Stage

Question 6.
Law of variable proportion explains three stages of production. In the first stage of production:
(a) Both MP and AP rise
(b) MP rises
(c) AP Falls
(d) MP is zero

Answer

Answer: (a) Both MP and AP rise

Question 7.
At which time all the factors of production may be changed ?
(a) Short run
(b) Long run
(c) Very Long run
(d) All the three

Answer

Answer: (b) Long run

Question 8.
Production function is expressed as:
(a) Q_x = P_x
(b) Q_x = f(A, B, C, D)
(c) Q_x = D_x
(d) None of these

Answer

Answer: (b) Q_x = f(A, B, C, D)

Question 9.
Which factors among following we find in short-run production process ?
(a) Fixed Factors
(b) Variable Factors
(c) Both (a) and (b)
(d) None of these

Answer

Answer: (c) Both (a) and (b)

Question 10.
The cycle which increases first and after being constant starts to reduce is called :
(a) APP
(b) MPP
(c) TPP
(d) All of these

Answer

Answer: (d) All of these

Question 11.
Which of the following is a saurce of production ?
(a) Land
(b) Labour
(c) Capital
(d) All of these

Answer

Answer: (d) All of these

Question 12.
Law of variable proportion is related to :
(a) Both short-run and long run
(b) Long-run
(c) Short-run
(d) Very Long-run

Answer

Answer: (c) Short-run

Question 13.
An active factor of production is:
(a) Capital
(b) Labour
(c) Land
(d) None of these

Answer

Answer: (b) Labour

Question 14.
If all the factors of production are increased by same proportion and as a result output increases by a greater proportion than it is called :
(a) Constant returns to scale
(b) Decreasing returns to scale
(d) All of these
(d) None of these

Answer

Answer: (d) All of these

Question 15.
Which of the following is included in money cost ?
(a) Normal Profit
(b) Explicit Cost
(c) Implicit Cost
(d) All of these

Answer

Answer: (d) All of these

Question 16.
Which of the following is not fixed cost ?
(a) Insurance Premium
(b) Interest
(c) Cost of Raw Material
(d) Rent of the Factory

Answer

Answer: (c) Cost of Raw Material

Question 17.
With the increase in production the difference between total cost and total fixed cost:
(a) Remains Constant
(b) Increases
(c) Decreases
(d) Both Increases or Decreases

Answer

Answer: (b) Increases

Question 18.
Changes in production quantity affect:
(a) Both Fixed and Variable Cost
(b) Only Variable Cost
(c) Only Fixed Cost
(d) None of the above

Answer

Answer: (b) Only Variable Cost

Question 19.
What happens when production is shut down ?
(a) Fixed Cost Increases
(b) Variable Costs Decline
(c) Variable Costs become zero
(d) Fixed Costs become zero

Answer

Answer: (c) Variable Costs become zero

Question 20.
The alternative name of opportunity cost is:
(a) Economic Cost
(b) Equilibrium Price
(c) Marginal Cost
(d) Average Cost

Answer

Answer: (a) Economic Cost

Question 21.
When average cost is decreasing what status marginal cost has as compared to average cost ?
(a) MC > AC
(b) MC = AC
(c) MC ≤ AC
(d) MC ≠ AC

Answer

Answer: (c) MC ≤ AC

Question 22.
Which statement of the following is true ?
(a) AC=TFC – TVC
(b) AC = AFC + TVC
(c) AC=TFC + AVC
(d) AC = AFC + AVC

Answer

Answer: (d) AC = AFC + AVC

Question 23.
What is an opportunity cost ?
(a) The alternative foregon
(b) The opportunity lost
(c) Transfer earnings
(d) All of these

Answer

Answer: (d) All of these

Question 24.
The shape of average cost curve is :
(a) U-shaped
(b) Reactangular Hyperbola shaped
(c) Line parallel to x-axis
(d) None of these

Answer

Answer: (a) U-shaped

Question 25.
The average fixed cost at 5 units of output is Rs. 20. Average variable cost at 5 units of output is Rs. 40. Average cost of producing 5 units is:
(a) Rs. 20
(b) Rs. 40
(c) Rs.56
(d) Rs.60

Answer

Answer: (d) Rs.60

Question 26.
Which of the following is correct ?
(a) TVC = TC – TFC
(b) TC = TVC-TFC
(c) TFC = TVC + TC
(d) TC = TVC x TFC

Answer

Answer: (a) TVC = TC – TFC

Question 27.
Average variable costs can be defined as:
(a) TVC x Q
(b) TVC + Q
(c) TVC-Q
(d) TVC ÷ Q

Answer

Answer: (d) TVC ÷ Q

Question 28.
With increase in output, the difference between total cost and total variable cost:
(a) Decreases
(b) Increases
(c) Remains Constant
(d) None of the above

Answer

Answer: (c) Remains Constant

Question 29.
Which factors are used in short-run production process ?
(a) Fixed Factors
(b) Variable Factors
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Question 30.
Following figure shows:

(a) Total Fixed Cost
(b) Total Variable Cost
(c) Total Cost
(d) None of these

Answer

Answer: (b) Total Variable Cost

Question 31.
In which market MR may become zero or negative ?
(a) Monopoly
(b) Monopolistic Competition
(c) Both (a) and (b)
(d) Perfect Competition

Answer

Answer: (c) Both (a) and (b)

Question 32.
In which market AR = MR ?
(a) Monopoly
(b) Monopolistic Competition
(c) Both (a) and (b)
(d) Perfect Competition

Answer

Answer: (d) Perfect Competition

Question 33.
In monopoly and monopolistic competition :
(a) AR = MR
(b) AR > MR
(c) AR < MR
(d) None of these

Answer

Answer: (b) AR > MR

Question 34.
To which market, following figure belongs ?

(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) None of the above

Answer

Answer: (b) Monopoly

Question 35.
With which condition, firm will get maximum profit ?
(a) Where MR = MC
(b) Where MC cuts MR from below
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Question 36.
In perfect competition, which of the following remains constant ?
(a) AR
(b) MR
(c) Both AR and MR
(d) None of the both

Answer

Answer: (c) Both AR and MR

Question 37.
In perfect competition:
(a) AR = MR
(b) AR > MR
(c) MR < MC
(d) MR = MC = 0

Answer

Answer: (a) MR = MC

Question 38.
When 5 units of a goods are sold, total revenue is Rs. 100. When 6 units are sold, marginal revenue is Rs. 8. At what price are 6 units sold ?
(a) Rs. 28 per unit
(b) Rs. 20 per unit
(c) Rs. 18 per unit
(d) Rs. 12 per unit

Answer

Answer: (c) Rs. 18 per unit

Question 39.
MR is shown as:
(a) \(\frac { ΔTR }{ ΔQ }\)
(b) \(\frac { TR }{ Q }\)
(c) \(\frac { ΔAR }{ Q }\)
(d) None of these

Answer

Answer: (a) \(\frac { ΔTR }{ ΔQ }\)

Question 40.
AR is shown as:
(a) \(\frac { TR }{ Q }\)
(b) \(\frac { ΔQ }{ P }\)
(c) \(\frac { ΔTR }{ ΔQ }\)
(d) None of these

Answer

Answer: (a) \(\frac { TR }{ Q }\)

Question 41.
In which market AR curve is parallel to X-axis ?
(a) Perfect Competition
(b) Monopoly
(c) Monopolistic Competition
(d) In all the above

Answer

Answer: (a) Perfect Competition

Question 42.
Which of the following is a true statement ?
(a) AR indicates price
(b) AR Curve and Demand Curve are the same
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Question 43.
The basic condition of firm’s equilibrium is:
(a) MC = MR
(b) MR = TR
(c) MR = AR
(d) AC = AR

Answer

Answer: (a) MC = MR

Question 44.
In final equilibrium of firm:
(a) MC cuts MR from above
(b) MC cuts MR from below
(c) Both (a) and (b) are
(d) None of the above is true

Answer

Answer: (b) MC cuts MR from below

Question 45.
For every market, which condition has to be fulfilled for firm’s equilibrium ?
(a) AR = MC
(b) MR = MC
(c) MC should cut MR from below
(d) Both (b) and (c)

Answer

Answer: (d) Both (b) and (c)

Question 46.
Which is a method of producer’s equilibrium ?
(a) TR and TC Method
(b) MR and MC Method
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Question 47.
For a firm’s equilibrium:
(a) MR = MC
(b) MR > MC
(c) MR < MC
(d) MR = MC = 0

Answer

Answer: (a) MR = MC

Question 48.
On which assumption, the law of supply depends ?
(a) There should be no change in income levels of buyers and sellers in the market.
(b) Prices of factors of production remain stable
(c) Technological level remains constant
(d) All the above

Answer

Answer: (d) All the above

Question 49.
If other things being same, what does the positive relationship between price and supply quantity signify ?
(a) Law of Demand
(b) Elasticity of Supply
(c) Law of Supply
(d) Supply Function

Answer

Answer: (c) Law of Supply

Question 50.
The reason of decrease in supply is:
(a) Increase in Production Cost
(b) Increase in Price of Substitutes
(c) Fall in number of Firms in the Industry
(d) All the above

Answer

Answer: (d) All the above

Question 51.
The figure given below shows:

(a) Extension in Supply
(b) Contraction in Supply
(c) Elasticity of supply
(d) Elasticity of demand

Answer

Answer: (a) Extension in Supply

Question 52.
The quantity of a goods which the seller is ready to sell in the market at fixed price and time is called ?
(a) Supply
(b) Demand
(c) Elasticity of supply
(d) Elasticity of Demand

Answer

Answer: (a) Supply

Question 53.
Supply is associated with:
(a) A Time Period
(b) Price
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (c) Both (a) and (b)

Question 54.
Determinating factor of supply of goods is:
(a) Price of Goods
(b) Price of Related Goods
(c) Price of Factor of Production
(d) All the above

Answer

Answer: (d) All the above

Question 55.
Which of the following statement is true ?
(a) Price and quantity have direct relationship
(b) Supply curve rises from left to right
(c) Supply is affected by many factors
(d) All the above

Answer

Answer: (d) All the above

Question 56.
Which of the following function shows the laws of supply ?
(a) S = f(P)
(b) S = f(a/p)
(c) S = f(Q)
(d) None of the above

Answer

Answer: (a) S = f(P)

Question 57.
Following figure shows :

(a) Perfectly Elastic Supply
(b) Perfectly Inelastic Supply
(c) Elastic Supply
(d) Inelastic Supply

Answer

Answer: (a) Perfectly Elastic Supply

Question 58.
Which of the following is correct ?
(a) Perfectly Elastic Supply e_s = ∞
(b) High Elastic Supply e_s > 1
(c) Perfectly Inelastic Supply e_s = 0
(d) All the above

Answer

Answer: (d) All the above

Question 59.
e_s = 0 means that elasticity of supply is:
(a) Perfectly Elastic Supply
(b) Perfectly Inelastic Supply
(c) Less Elastic Supply
(d) Unit Elastic Supply

Answer

Answer: (b) Perfectly Inelastic Supply

Question 60.
If the price of goods rises by 60% but supply increases by only 5%, the supply of goods will be:
(a) Highly Elastic
(b) Elastic
(c) Inelastic
(d) Perfectly Inelastic

Answer

Answer: (c) Inelastic

Question 61.
The elasticity of a straight line supply curve originating from the centre of origin is:
(a) Less than unity,
(b) greater than unity
(c) equal to unity
(d) equal to zero

Answer

Answer: (c) equal to unity

Question 62.
When supply increases more with a result of small increase in price, the nature of supply will be :
(a) Elastic
(b) Inelastic
(c) Perfectly Elastic
(d) Perfectly Inelastic

Answer

Answer: (a) Elastic

Question 63.
When the proportionate change in the supply of goods is more than the proportionate change in its price, the elasticity of supply will be:
(a) Less than Unit
(b) Equal to Unit
(c) Greater than Unit
(d) Infinite

Answer

Answer: (c) Greater than Unit

Question 64.
If the price of the goods rises by 60% and supply increases by only 5%, the supply of goods will be :
(a) Highly Elastic
(b) Elastic
(c) Inelastic
(d) Perfectly Inelastic

Answer

Answer: (c) Inelastic

Question 65.
The measurement of the elasticity of supply is expressed as:
(a) \(\frac { ΔQ_s/Q_s }{ ΔP/P }\)
(b) \(\frac { Q_s }{ ΔP }\).\(\frac { 1 }{ P }\)
(c) \(\frac { Q_s }{ Q_s }\).ΔY
(d) \(\frac { ΔP }{ Q_s }\).\(\frac { P }{ ΔQ_s }\)

Answer

Answer: (a) \(\frac { ΔQ_s/Q_s }{ ΔP/P }\)

Question 66.
There are factors of productions:
(a) Two
(b) Three
(c) Four
(d) Five

Answer

Answer: (d) Five

Question 67.
Fixed cost is also known as:
(a) Variable cost
(b) Actual cost
(c) Supplementary cost
(d) Short-term cost

Answer

Answer: (c) Supplementary cost

Question 68.
Supply falls on the same price when:
(a) Where there is decrease in supply
(b) When there is contraction in supply
(c) When supply increases
(d) When there is expansion in supply.

Answer

Answer: (a) Where there is decrease in supply

Question 69.
Active factor of production:
(a) Capital
(b) Labour
(c) Land
(d) None of these.

Answer

Answer: (b) Labour

Question 70.
In the short-run following factors are included in the process of production:
(a) Fixed factors
(b) Variable factors
(c) Both (a) and (b)
(d) None of these.

Answer

Answer: (c) Both (a) and (b)

Fill in the blanks:

1. Short-term production function is known as ……………

Answer

Answer: Law of variable proportion

2. Returns to scale is related to ……………

Answer

Answer: Long term

3. Cost incurred in per unit production is ……………

Answer

Answer: Average cost

4. Increase in income from a unit of production is called ……………

Answer

Answer: Marginal cost

5. A producer is in the state of equilibrium when he earns ……………

Answer

Answer: Profit

6. Law of supply shows …………… relation between price and supply.

Answer

Answer: Direct

7. The elasticity of supply for milk and related good is ……………

Answer

Answer: Elastic.

State true or false:

1. Rent theory of Ricardo is based on the law of Diminishing returns.

Answer

Answer: True

2. Law of decreasing returns to scale arises due to Non-divisibility.

Answer

Answer: False

3. Fixed cost is also known as supplementary cost.

Answer

Answer: True

4. In case of perfect competition, a firm attains maximum satisfaction when MC curve cut MR curve.

Answer

Answer: False

5. There is inverse relation between price and supply.

Answer

Answer: False

6. The supply of perishable goods is inelastic.

Answer

Answer: True

7. There are four laws of production.

Answer

Answer: False.

Match the following:

‘A”	‘B’
1. Causes for the operation of the law of diminishing returns	(a) Firms’s equilibrium
2. Long term process	(b) Imperfect substitute of factors of production
3. Marginal Revenue = Average Revenue.	(c) Returns to scale
4. Elasticity of supply	(d) e_s = 1.
5. Elastic supply	(e) Proportionate change in supply proportionate change in price.

Answer

Answer:

‘A”	‘B’
1. Causes for the operation of the law of diminishing returns	(b) Imperfect substitute of factors of production
2. Long term process	(c) Returns to scale
3. Marginal Revenue = Average Revenue.	(a) Firms’s equilibrium
4. Elasticity of supply	(e) Proportionate change in supply proportionate change in price.
5. Elastic supply	(d) e_s = 1.

We hope the given NCERT MCQ Questions for Class 11 Economics Chapter 3 Production and Costs with Answers Pdf free download will help you. If you have any queries regarding CBSE Class 11 Economics Production and Costs MCQs Multiple Choice Questions with Answers, drop a comment below and we will get back to you soon.

Class 11 Microeconomics MCQ:

MCQ Questions for Class 11 Economics Chapter 6 Non-competitive Markets with Answers

Non-competitive Markets Class 11 MCQ Online Test With Answers Questions

January 14, 2022

Check the below NCERT MCQ Questions for Class 11 Economics Chapter 6 Non-competitive Markets with Answers Pdf free download. MCQ Questions for Class 11 Economics with Answers were prepared based on the latest exam pattern. We have provided Non-competitive Markets Class 11 Economics MCQs Questions with Answers to help students understand the concept very well.

Class 11 Economics Chapter 6 Non-competitive Markets MCQ With Answers

Economics Class 11 Chapter 6 MCQs On Non-competitive Markets

MCQ On Market In Economics Class 11 Chapter 6 Question 1.
Which of the following is not the feature of an imperfect competition?
(a) Large number of buyers
(b) Single seller
(c) Homogeneous products
(d) Price maker

Answer

Answer: (c) Homogeneous products
Explanation:
A homogeneous product is one that cannot be distinguished from competing products from different suppliers. In other words, the product has essentially the same physical characteristics and quality as similar products from other suppliers. One product can easily be substituted for the other.

MCQ On Forms Of Market Class 11 Chapter 6 Question 2.
A monopolist is a price
(a) Acceptor
(b) Taker
(c) Giver
(d) Maker

Answer

Answer: (d) Maker
Explanation:
A monopoly firm is a price maker or price setter because it is the sole producer of a product.This is in contrast to a competitive firm which is a price taker with zero market power. Because in the monopoly, there is only one seller for the product, any one who wants to buy the product must buy it from the monopolist.

MCQ On Market Class 11 Chapter 6 Question 3.
The firm and the industry are one and the same in:
(a) Monopolistic competition
(b) Monopoly
(c) Duopoly
(d) Oligopoly

Answer

Answer: (b) Monopoly
Explanation:
A type of market structure, where the firm has absolute power to produce and sell a product or service having no close substitutes. In simple terms, monopolised market is one where there is a single seller, selling a product with no near substitutes to a large number of buyers. As the firm and industry are one and the same thing in the monopoly market, so it is a single-firm industry. There is zero or negative cross elasticity of demand for a monopoly product. Monopoly can be found in public utility services such as telephone, electricity and so on.

MCQ Questions For Class 11 Statistics Economics Chapter 6 Question 4.
Which of the following is not a characteristic feature of imperfect competition?
(a) Prices vary from seller to seller
(b) All the products are homogeneous
(c) Profits of the seller is included in the price
(d) None of above

Answer

Answer: (b) All the products are homogeneous
Explanation:
Imperfect competition is a competitive market situation where there are many sellers, but they are selling heterogeneous (dissimilar) goods as opposed to the perfect competitive market scenario. As the name suggests, competitive markets that are imperfect in nature.

Question 5.
Market which has two firms is known as
(a) Duopoly
(b) Monopolistic Competition
(c) Oligopoly
(d) None of These

Answer

Answer: (a) Duopoly
Explanation:
Oligopoly is a market structure with a small number of firms, none of which can keep the others from having significant influence. The concentration ratio measures the market share of the largest firms. A monopoly is one firm, duopoly is two firms and oligopoly is two or more firms.

Question 6.
Under which of the following forms of market structure a firm has no control over the price of its product?
(a) Monopoly
(b) Perfect competition
(c) Oligopoly
(d) Monopolistic competition

Answer

Answer: (b) Perfect competition
Explanation:
Pure or perfect competition is a theoretical market structure in which the following criteria are met: All firms sell an identical product (the product is a “commodity” or “homogeneous”). All firms are price takers (they cannot influence the market price of their product). Market share has no influence on prices.

Question 7.
Oligopoly having identical products is known as
(a) Pure oligopoly
(b) Collusive oligopoly
(c) Independent oligopoly
(d) None of above

Answer

Answer: (a) Pure oligopoly

Question 8.
Price discrimination can take place only in
(a) Perfect competition
(b) Oligopoly
(c) Monopolistic competition
(d) Monopoly

Answer

Answer: (d) Monopoly

Question 9.
Which market have characteristic of product differentiation
(a) Monopolistic competition
(b) Oligopoly
(c) Monopoly
(d) Perfect competition

Answer

Answer: (a) Monopolistic competition
Explanation:
Monopolistic competition occurs when an industry has many firms offering products that are similar but not identical. Firms in monopolistic competition typically try to differentiate their product in order to achieve in order to capture above market returns.

Question 10.
Under monopoly form of market, TR is maximum when
(a) MR is maximum
(b) MR < 0
(c) MR > 0
(d) MR is zero

Answer

Answer: (d) MR is zero
Explanation:
Marginal revenue means additional revenue generate/received from the sale of additional unit of output.In imperfect (monopoly) when TR increases MR decreases , when TR become maximum MR reaches to zero.

We hope the given NCERT MCQ Questions for Class 11 Economics Chapter 6 Non-competitive Markets with Answers Pdf free download will help you. If you have any queries regarding CBSE Class 11 Economics Non-competitive Markets MCQs Multiple Choice Questions with Answers, drop a comment below and we will get back to you soon.

Class 11 Microeconomics MCQ:

MCQ Questions for Class 11 Economics Chapter 2 Theory of Consumer Behaviour with Answers

Theory of Consumer Behaviour Class 11 MCQ Online Test With Answers Questions

January 14, 2022

Check the below NCERT MCQ Questions for Class 11 Economics Chapter 2 Theory of Consumer Behaviour with Answers Pdf free download. MCQ Questions for Class 11 Economics with Answers were prepared based on the latest exam pattern. We have provided Theory of Consumer Behaviour Class 11 Economics MCQs Questions with Answers to help students understand the concept very well.

Class 11 Economics Chapter 2 Theory of Consumer Behaviour MCQ With Answers

Economics Class 11 Chapter 2 MCQs On Theory of Consumer Behaviour

MCQ Questions For Class 11 Economics Chapter 2 Question 1.
Who gave the cardinal concept of utility?
(a) Marshall
(b) Pigou
(c) Hicks
(d) Samuelson

Answer

Answer: (a) Marshall

Theory Of Consumer Behaviour MCQ Question 2.
Consumer’s behaviour is studied in:
(a) Micro Economics
(b) Macro Economics
(c) Income Analysis
(d) None of these

Answer

Answer: (a) Micro Economics

Class 11 Economics Chapter 2 MCQ Question 3.
Which of the following statement is true ?
(a) Utility means want-satisfying power
(b) Utility is a function of intensity of desire
(c) Desire of consumption gives birth to utility
(d) All of these

Answer

Answer: (d) All of these

Economics Class 11 Chapter 2 MCQ Question 4.
Which is the First Law of Gossen?
(a) Law of Demand
(b) Law of Diminishing Marginal Utility
(c) Law of Equi-marginal Utility
(d) Consumer’s Surplus

Answer

Answer: (b) Law of Diminishing Marginal Utility

MCQ On Theory Of Consumer Behaviour Question 5.
Which of the following is a characteristic of utility ?
(a) Utility is a psychological phenomenon
(b) Utility is subjective
(c) Utility is a relative concept
(d) All of these

Answer

Answer: (d) All of these

Question 6.
How we calculate marginal utility ?
(a) ∆TU/∆Q
(b) ∆MU/∆Q
(c) ∆Q/∆TU
(d) ∆Q/∆MU

Answer

Answer: (a) ∆TU/∆Q

Question 7.
When TU becomes maximum, MU is:
(a) Positive
(b) Negative
(c) Zero
(d) None of these

Answer

Answer: (c) Zero

Question 8.
Which of the following is true ?
(a) TU increases till MU is positive
(b) TU is maximum when MU is equal to zero
(c) TU declines when MU is negative
(d) All of these

Answer

Answer: (d) All of these

Question 9.
Who basically propounded the concept of Law of Equimarginal Utility ?
(a) Marshall
(b) Gossen
(c) Ricardo
(d) J. S. Mill

Answer

Answer: (c) Ricardo

Question 10.
In difference curve is:
(a) Convex to the origin
(b) Concave to the origin
(c) Both (a) and (b) true
(d) All of these false

Answer

Answer: (a) Convex to the origin

Question 11.
The ability of satisfying human want in a goods is called its:
(a) Productivity
(b) Satisfaction
(c) Utility
(d) Profitability

Answer

Answer: (c) Utility

Question 12.
Slope of budget line or price line is:
(a) –\(\frac{P_x}{P_y}\)
(b) –\(\frac{P_y}{P_x}\)
(c) +\(\frac{P_x}{P_y}\)
(d) +\(\frac{P_y}{P_x}\)

Answer

Answer: (a) –\(\frac{P_x}{P_y}\)

Question 13.
Utility is related to:
(a) Usefulness
(b) Morality
(c) Satisfaction of human wants
(d) All the above

Answer

Answer: (d) All the above

Question 14.
Utility can be measured by:
(a) Money
(b) Exchange of goods
(c) Weight of the good
(d) None of these

Answer

Answer: (a) Money

Question 15.
Law of Equi-marginal utility is called:
(a) Law of increasing utility
(b) Law of diminishing utility
(c) Law of substitution
(d) None of these

Answer

Answer: (c) Law of substitution

Question 16.
Indifference curve slopes:
(a) From right to left
(b) From left to right
(c) Both (a) and (b)
(d) None of these

Answer

Answer: (b) From left to right

Question 17.
The addition of utilities obtained from all units of a goods is called :
(a) Marginal Utility
(b) Total Utility
(c) Maximum Satisfaction
(d) Additional Utility

Answer

Answer: (b) Total Utility

Question 18.
Who propounded the ordinal utility theory’ ?
(a) Marshall
(b) Pigou
(c) Hicks and Allen
(d) Ricardo

Answer

Answer: (c) Hicks and Allen

Question 19.
The propounder of law of diminishing marginal utility is:
(a) Gossen
(b) Adam smith
(c) Chapman
(d) Hicks

Answer

Answer: (a) Gossen

Question 20.
Consumer’s equilibrium takes at a point where:
(a) MU = Price
(b) MU < Price
(c) MU > Price
(d) None of these

Answer

Answer: (a) MU = Price

Question 21.
The capability of a commodity to satisfy human wants is:
(a) Consumption
(b) Utility
(c) Quality
(d) Taste

Answer

Answer: (b) Utility

Question 22.
For the maximum satisfaction of consumer:
(a) Marginal utility of a good should be equal to its price.
(b) Marginal utility of a good should be greater than its price.
(c) There is no relation between marginal utility and price.
(d) None of these

Answer

Answer: (a) Marginal utility of a good should be equal to its price.

Question 23.
When marginal utility is negative, then total utility:
(a) is maximum
(b) Starts decreasing
(c) increases at decreasing rate
(d) None of these

Answer

Answer: (b) Starts decreasing

Question 24.
According to the law of equi-marginal utility, the condition for consumer’s equilibrium is:
(a) \(\frac{MU_A}{P_A}\)
(b) \(\frac{MU_B}{P_B}\)
(c) Both (a) and (b)
(d) Undefined

Answer

Answer: (c) Both (a) and (b)

Question 25.
According to Marshall, utility of a commodity:
(a) Can be measured by money
(b) Cannot be measured by money
(c) Can be measured in cardinal numbers
(c) Both (a) and (b)

Answer

Answer: (c) Both (a) and (b)

Question 26.
Which element is essential for demand ?
(a) Desire to consume
(b) Availability of adequate resources
(c) Willingness to consume
(d) All of these

Answer

Answer: (d) All of these

Question 27.
Demand Curve generally slopes:
(a) Upward from left to right
(b) Downward from left to right
(c) Parallel to X-axis
(d) Parallel to Y-axis

Answer

Answer: (b) Downward from left to right

Question 28.
In which goods, price fall does not make any increase in demand ?
(a) Necessities Goods
(b) Comfort Goods
(c) Luxuries Goods
(d) None of these

Answer

Answer: (a) Necessities Goods

Question 29.
Which of the following factor affects demand ?
(a) Price
(b) Change in income
(c) Taste of the Consumer
(d) All of these

Answer

Answer: (d) All of these

Question 30.
Goods, which can alternatively be used, are called:
(a) Complementary Goods
(b) Substitutes
(c) Comforts
(d) None of these

Answer

Answer: (b) Substitutes

Question 31.
Law of Demand is a:
(a) Qualitative Statement
(b) Quantitative Statement
(c) Both (a) and (b)
(d) None of these

Answer

Answer: (a) Qualitative Statement

Question 32.
Which of the following is a demand function ?
(a) PX
(b) DX = PX
(c) Dx = (Px)
(d) None of these

Answer

Answer: (c) Dx = (Px)

Question 33.
When change in the price of goods-X affects the demand of goods-Y, this demand is called:
(a) Price Demand
(b) Income Demand
(c) Cross Demand
(d) All of these

Answer

Answer: (d) All of these

Question 34.
For normal goods, Law of Demand states the relationship between price and quantity of goods:
(a) Direct
(b) Positive
(c) Indirect
(d) None of the above

Answer

Answer: (c) Indirect

Question 35.
Which of the following is a reason for fall in demand ?
(a) Fall in Income
(b) Fall in Number of Buyers
(c) Fall in Taste of Consumer
(d) All the above

Answer

Answer: (d) All the above

Question 36.
With rise in coffee price, the demand of tea:
(a) Rises
(b) Falls
(c) Remains stable
(d) None of these

Answer

Answer: (a) Rises

Question 37.
Contraction in demand appears when:
(a) Price rises and demand falls
(b) Price rises and demand also rises
(c) Price remains stable and demand falls
(d) Price falls but demand remains stable

Answer

Answer: (a) Price rises and demand falls

Question 38.
Which is a reason of change in demand ?
(a) Change in consumer’s income
(b) Change in price of related goods
(c) Population increase
(d) All pf these

Answer

Answer: (d) All pf these

Question 39.
For a change in which of the following, there is no change in demand ?
(a) Change in price
(b) Change in income
(c) Change in taste and fashion
(d) None of these

Answer

Answer: (d) None of these

Question 40.
With a rise in price the demand for ‘Giffin’ goods:
(a) increases
(b) decreases
(c) remains constant
(d) becomes unstable

Answer

Answer: (a) increases

Question 41.
Hie slope of the demand Curve of a normal goods is:
(a) Negative
(b) Positive
(c) Zero
(d) Undefined

Answer

Answer: (a) Negative

Question 42.
With an increase in income consumer decreases the consumption of which goods ?
(a) Inferior goods
(b) Normal goods
(c) Giffin goods
(d) Both (a) and (b)

Answer

Answer: (c) Giffin goods

Question 43.
The demand curve of a good shifts from DD’ to dd

(a) fail in the price of the goods
(b) rise in the price of the goods
(c) rise in the price of substitute goods
(d) rise in the price of complementary goods

Answer

Answer: (c) rise in the price of substitute goods

Question 44.
Elasticity of demand is a:
(a) Qualitative Statement
(b) Quantitative Statement
(c) Both (a) and (b)
(d) None of the above

Answer

Answer: (b) Quantitative Statement

Question 45.
Which of the following is a formula for measuring the elasticity of demand ?

Answer

Answer: (a)

Question 46.
For Giffin goods, price elasticity of demand is :
(a) Negative
(b) Positive
(c) Zero
(d) None of these

Answer

Answer: (b) Positive

Question 47.
Following figure shows:

(a) High Elastic Demand
(b) Perfectly Elastic Demand
(c) Perfectly Inelastic Demand
(d) Inelastic Demand

Answer

Answer: (b) Perfectly Elastic Demand

Question 48.
Which of the following shows elasticity less than one ?
(a) Necessity Goods
(b) Comforts
(c) Luxuries
(d) All of these

Answer

Answer: (a) Necessity Goods

Question 49.
With which method, elasticity of demand is measured ?
(a) Total Expenditure Method .
(b) Percentage or Proportionate Method
(c) Point Method
(d) All of these

Answer

Answer: (d) All of these

Question 50.
Elastic demand is shown by:

Answer

Answer: (a) \(\frac{ΔQ}{Q} > \frac{ΔP}{P}\)

Question 51.
What is the price elasticity in following example ?

(a) -2.5
(b) + 3.5
(c) + 4.0
(d) None of these

Answer

Answer: (a) -2.5

Question 52.
Who propounded the percentage or proportionate method of measuring elasticity of demand ?
(a) Marshall
(b) Flux
(c) Hicks
(d) None of these

Answer

Answer: (b) Flux

Question 53.
Which of the following factor affects elasticity of demand ?
(a) Nature of Goods
(b) Price Level
(c) Income Level
(d) All of these

Answer

Answer: (d) All of these

Question 54.
How many types elasticity of uemand has ?
(a) Three
(b) Five
(c)Six
(d) Seven

Answer

Answer: (b) Five

Question 55.
Elasticity of demand for necessities is :
(a) Zero
(b) Unlimited
(c) Greater than unity
(d) Less than unity

Answer

Answer: (a) Zero

Question 56.
Price elasticity of demand means :
(a) Change in demand due to change in price
(b) Change in demand
(c) Change in real income
(d) Change in Price

Answer

Answer: (a) Change in demand due to change in price

Question 57.
The elasticity of demand at the mid-point of a straight line demand curve:
(a) will be zero
(b) will be unity
(c) will be infinity
(d) None of these

Answer

Answer: (b) will be unity

Question 58.
If the demand for a good changes by 60% due to 40% change in price, the elasticity of demand is :
(a) 0.5
(b) -1.5
(c) 1
(d) zero

Answer

Answer: (b) -1.5

Question 59.
For luxury goods the demand is:
(a) Inelastic
(b) Elastic
(c) Highly elastic
(d) Perfectly Inelastic

Answer

Answer: (c) Highly elastic

Question 60.
Any statement about demand for a good is considered complete only when the following is/are mentioned in:
(a) Price of the good
(b) Quantity of the good
(c) Period of time
(d) All of these

Answer

Answer: (a) Price of the good

Question 61.
Consumer is in equilibrium when:
(a) MUx = PUx
(b) MUx > PUx
(c) MUx < Px
(d) MUx ÷ Px

Answer

Answer: (a) MUx = PUx

Question 62.
Marshall has given the law of Equimarginal utility related:
(a) Related to goods
(b) Related to money
(c) In relation to both
(d) None of these.

Answer

Answer: (a) Related to goods

Question 63.
How many tremendous curves can touch the budget line:
(a) One
(b) Two
(c) Several
(d) Depends on the basis of indifference maps.

Answer

Answer: (a) One

Question 64.
Indifference curves were first introduced by the English economist in 1881 by:
(a) Edge worth
(b) Pareto
(c) Myers
(d) Hicks.

Answer

Answer: (a) Edge worth

Question 65.
Any statement about the demand of an object is considered complete when it is mentioned in the following:
(a) Price of good
(b) Demand of good
(c) Time period
(d) All of the above.

Answer

Answer: (d) All of the above.

Question 66.
If price of goods ‘X’ falls leading to increase in demand of goods ‘ Y’ then both the goods are:
(a) Substitute goods
(b) Complementary goods
(c) Not related
(d) Competitor.

Answer

Answer: (b) Complementary goods

Question 67.
According to total outlay method, the demand of a good is sinelastic when:
(a) Price will fall with the increase in amount spent
(b) When price of good decreases and money spent decreases
(c) Expenditure remains the same, even if price falls
(d) Expenditure decreases with the increase in price.

Answer

Answer: (b) When price of good decreases and money spent decreases

Fill in the blanks:

1. Consumer is a …………. human being.

Answer

Answer: Rational

2. If the price of substitute goods increases then the demand curve shifts to the ………….

Answer

Answer: Right

3. …………. propounded the law of Diminishing Returns.

Answer

Answer: Gossen

4. According to Marshall utility can be measured in terms of ………….

Answer

Answer: Money

5. An indifference curve gives …………. level of satisfaction to the consumers.

Answer

Answer: Equal

6. Car and Petrol are goods ………….

Answer

Answer: Substitute

7. There is …………. relation between price and demand.

Answer

Answer: inverse

State true or false:

1. Utility is an intensive assumption.

Answer

Answer: True

2. The proportion of the cost of two goods measures the slope of budget line.

Answer

Answer: True

3. Demand curve is generally negative sloped.

Answer

Answer: False

4. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

Answer

Answer: True

5. The elasticity of the demand of the object and the expenditure on the object is closely related.

Answer

Answer: True

Match the following:

‘A”	‘B’
1. Inelastic	(a) Utility analysis
2. Substitute goods	(b) Demand of Necessary or Essential goods
3. Marshall	(c) Gossen’s second law
4. Indifference curve	(d) Cross demand
5. Law of equi marginal utility	(e) Does not cut each ether

Answer

Answer:

‘A”	‘B’
1. Inelastic	(b) Demand of Necessary or Essential goods
2. Substitute goods	(d) Cross demand
3. Marshall	(a) Utility analysis
4. Indifference curve	(e) Does not cut each ether
5. Law of equi marginal utility	(c) Gossen’s second law

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