If firms can neither enter nor leave an industry, which time period is relevant?
Correct answer A. Short run
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Economics MCQs
Page 4 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 4 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
What is it called when forming a regional trading group shifts trade away from non-member countries towards member countries?
Correct answer D. Trade diversion
What is it called when forming a regional trading group increases trade above the levels before the group existed?
Correct answer B. Trade creation
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What is a normal rate of profit?
Correct answer D. The rate that is just sufficient to keep owners or investors satisfied
Which of the following illustrates a positive, dynamic effect of economic integration?
Correct answer B. Economies-of-scale effect
How are economic profits defined in this context?
Correct answer D. Anything greater than the normal opportunity cost of investing
For a linear demand curve, what is the slope of the marginal revenue curve?
Correct answer B. Twice as steep as the demand curve
For Country X joining a customs union, trade creation is more likely to outweigh trade diversion when its pre-union tariffs are ____ and the number of member countries is ____?
Correct answer B. Relatively high; relatively large
If a monopolist is known to be maximising profit, what can correctly be inferred?
Correct answer C. It has equated marginal revenue and marginal cost
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Criticisms of the North American Free Trade Agreement include all of the following EXCEPT which one?
Correct answer C. Wages in the United States will rise relative to Mexican wages
From society’s point of view, what would make people better off if a monopolist changed its behaviour?
Correct answer C. Producing more and charging a lower price
How do firms under monopolistic competition gain some market power?
Correct answer A. By producing differentiated products
What must a firm in a monopolistically competitive industry do to sell more output?
Correct answer C. Lower its price
Which statement best describes the outcome under monopolistic competition?
Correct answer B. It is not efficient because too little output is produced and that output is produced at a cost above minimum average total cost
Which industry structure has a few firms, each big enough to influence the market price?
Correct answer A. Oligopoly
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What is an industry called when a relatively small number of firms dominate the market?
Correct answer B. A concentrated industry
What is an agreement to fix prices and quantities known as?
Correct answer D. Collusion
In which situation is a cartel most likely to succeed?
Correct answer A. The market for copper, where there are very few producers and the product is standardised
What does the kinked demand curve model of oligopoly assume about the elasticity of demand?
Correct answer A. Demand in response to a price increase is more elastic than in response to a price decrease
When is a market defined as perfectly contestable?
Correct answer C. Entry to it and exit from it are both costless