Top 350+ Solved Micro economics 2 MCQ Questions Answer
Q. Which of the following statements is true
a. oligopolies sell more output than perfect competition
b. oligopolies charge a higher price than monopolies
c. oligopolies sell more output than monopolies
d. oligopolies charge a lower price than perfect competition
Q. The larger the number of firms in an oligopoly, the ________ the price and the ________the output of the industry.
a. lower, greater
b. higher, lesser
c. higher, greater
d. lower, lesser
Q. Factors of production are:
a. the coefficients in a production function
b. the characteristics of a market that determine how much is produced
c. the inputs used to produce goods and services
d. the outputs from a production function
Q. The property of diminishing marginal product applies:
a. only to workers in the short run
b. applies to workers and any other variable inputs in the short run
c. only to workers in the long run
d. applies to workers and any other variable inputs in the long run
Q. All of the following will cause the value of the marginal product of labor to increase,EXCEPT:
a. an increase in the price of the good sold by the firm
b. a new production technology is developed and implemented by the firm
c. an increase in the number of workers employed by the firm
d. an increase in the quantity of other factors of production used by the firm
Q. If the supply curve for labor is backward bending, and if the wage of a worker increases,she might choose to work:
a. fewer hours per week, since she can earn the same income working fewer hours
b. more hours per week, since she can earn the same income working fewer hours
c. fewer hours per week, since every hour of leisure is cheaper than before
d. more hours per week, since she needs to work more hours to earn the same income
Q. If many students choose to study to become accountants, when all of these studentseventually graduate, we can expect accountant's wages to ________, and the equilibrium number of accountants will ________
a. rise, increase
b. drop, increase
c. rise, decrease
d. drop, decrease
Q. If there is a permanent increase in the demand for cars, car manufacturers will want tohire ________ workers, which will cause wages in the industry to ________.
a. more, rise
b. more, drop
c. less, rise
d. less, drop
Q. As firms gradually acquire ever more technology, machinery and equipment, workers'productivity gradually ________, and workers wages gradually ________.
a. rises, decrease
b. diminishes, decrease
c. diminishes, increase
d. rises, increase
Q. The price paid for any factor of production tends to be equal to:
a. the wage rate
b. the value of the marginal product of that input
c. the price of the product sold by the firm that inputs
d. the price of the product sold by the firm that buys the inputs
Q. In a perfectly competitive market
a. each firm sets its own price
b. there are a few firms selling unique products
c. when one firm ceases production, the market equilibrium price tends to rise
d. none of the above. in a perfectly competitive market, firms sell homogenous products and
Q. The three primary characteristics of a perfectly competitive market are
a. the firms\ products are unique, they set their own price and can freely enter and exit the market
b. the firms\ products are homogenous, the firms are price takers and can freely enter and exit the market
c. the firms\ products are homogenous, the firms are price takers and there are barriers to entry into the market
d. the firms\ products are unique, they are price takers and there are no barriers to entry in the market
Q. Microeconomic theory assumes that all firms maximize profits because
a. it has been observed that managers always align their goals with investors and seek to maximize short and long run profits
b. profit is likely to dominate almost all decisions for smaller firms
c. if managers deviate from profit maximization decisions for too long shareholders or the board of directors will replace them
d. both (b) and (c)
Q. Profits are maximized when the firm
a. captures the largest market share in its market
b. produces at an output level where marginal revenue exceeds marginal cost
c. produces at the output level where marginal revenue equals marginal cost
d. produces at the output level where total revenue is maximized
Q. The demand curve for a perfectly competitive firm
a. slopes downward as the quantity demanded increases as the firm lowers price
b. is a horizontal, perfectly elastic demand curve at the market price
c. is a straight, downward sloping curve that is price elastic at higher prices and price inelastic as price falls and approaches zero
d. both (b) and (c)