MCQs on Supply

Supply

7-The supply of a good refers to:

a.      Stock available for sale

b.     Total stock in the warehouse

c.      Actual Production of the good

d.     Quantity of the good offered for sale at a particular price per unit of time

(Ans: d)

 COST

8-In the short run, when the output of a firm increases, its average fixed cost:

a.      Remains constant

b.     Decreases

c.      Increases

d.     First decreases and then rises

(Ans: b)

9-The cost of one thing in terms of the alternative given up is called:

a.      Real cost

b.     Production cost

c.      Physical cost

d.     opportunity cost

(Ans: d)

10-Assume that consumer’s income and the number of sellers in the market for good X both falls. Based on this information, we can conclude with certainty that the equilibrium:

a.      Price will decrease

b.     Price will increase

c.      Quantity will increase

d.     Quantity will decrease

(Ans: d)

11-The economist’s objections to monopoly rest on which of the following grounds?

a.      There is a transfer of income from consumers to the monopolist

b.     There is welfare loss as resources tend to be misallocated under monopoly

c.      Only A is correct

d.     Both A and B are correct

(Ans: d)

12-In which of the following market structure is the degree of control over the price of its product by a firm very large?

a.      Imperfect competition

b.     Perfect competition

c.      Monopoly

d.     In A and B both

(Ans: c)

13-The offer curves introduced by Alfred Marshall, helps us to understand how the ______ is established in international trade.

a.      Terms of trade

b.     Equilibrium price ratio

c.      Exchange rate

d.     Satisfaction level

(Ans: a)

14-Demand for factors of production is:

a.      Derived demand

b.     Joint demand

c.      Composite demand

d.     None of the above

(Ans: a)

15-The producer’s demand for a factor of production is governed by the ___ of that factor.

a.      Price

b.     Marginal Productivity

c.      Availability

d.     Profitability

(Ans: b)

16-Under conditions of perfect competition in the product market:

a.      MRP=VMP

b.     MRP > VMP

c.      VMP > MRP

d.     None of the above

(Ans: a)

  23-Which statistical measure helps in measuring the purchasing power of money?

a.      Arithmetic average

b.     Index numbers

c.      Harmonic mean

d.     Time series

(Ans: b)