Core course: EC02 B02 Micro
economics II B A Economics II
semester
Multiple Choice Questions and
Answers
1. Cost functions are derived from
a) demand functions, b) production functions, c) supply
functions
2. The U shape of the average total cost curve reflects
a) LDMU, b) The Law Of Variable Proportions, c)
Consumer’s Surplus
3. The total fixed cost is a : a) horizontal
straight line b) vertical c) hyperbola
4. The shape of average fixed cost is
a) horizontal straight line b) vertical c) rectangular hyperbola
5. The shape of TVC and TC are:
a) rectangular hyperbola b) inverse ‘S’ shape c)
horizontal straight line
6. The inverse ‘S’ shape of the TVC and TC are due to
a) LDMU b) Law of Variable Proportionsc) MRS
7. The MC curve cuts the AC curve at
a) The maximum point b) The initial Point, c) The minimum Point
8. The minimum point of ATC is at ……………. position of the
minimum point of AVC: a) right b) left c) same
9. If the long run cost curve shifts down wards it is an indication of
a) technological progress b) lower factor prices c) both
of these
10. The U shape of the LAC reflects
, a) Law of Variable proportions b) Laws of returns to scale
c) none of these
11. The long run cost curve in the traditional theory is
a) Envelops curve b) Planning curve c) Both of these
12. In the modern theory of cost, the short run average variable cost
is
a) saucer shaped b) U shaped c) none of these
13. The short run average variable cost is saucer shaped
because of the presence of
a) excess capacity b) reserve capacity c) none of these)
14. Price discrimination is an essential feature of
a) Perfect competition b) Oligopoly c) Duopoly
d) monopoly
15. Under monopoly the slope of AR curve is:
a) Upward sloping b) downward sloping c) horizontal
d) None of these
16. Monopoly market is :
a) Single seller market b) single buyer market c) single buyer
and seller d) None
17. In a monopsony market there is:
a) Single seller b) single buyer c) Two sellers d) two buyers
18. Third degree price discrimination occurs when the monopolist
charges different prices for the same commodity in different
a) Markets b) places c) continents d) countries
19. Price discrimination is possible:
a) Under any market form b) only
under monopoly c) Only under
monopolistic completion d) Only in perfect
competition
20. Monopolist maximizes profit at the point where
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