IBPS RRB - Basics of Economics 1000+ MCQ [Solved] PDF Download

1. When a competitive firm is in equilibrium in the long-run, its output is such that:
A. Costs per unit of output are lowest
B. Total profits are highest
C. Marginal cost is lowest
D. Profit per unit of output is zero
Answer : A

2. For the equilibrium of the firm and the industry in the short period in a competitive market, the condition is:
A. P = AC
B. P = MC
C. AC = MC
D. MC = TR
Answer : B

3. The optimum level of output in long run takes place where:
A. LAC = LMC
B. SAC = LMC
C. SAC =MC
D. SAC =LAC
Answer : D

4. The firm in cournot model:
A. face costs
B. face taxes
C. donot face taxes
D. donot face costs
Answer : D

5. An effective price ceiling usually results in:
A. Excess demand
B. Qd > Qs
C. Shortage of supply
D. All of the above
Answer : D

6. Equilibrium of a firm represents maximization of profits as well as:
A. Maximization of losses
B. Minimization of losses
C. Minimization of profits
D. None of the above
Answer : B

7. Human wants are:
A. Thousands
B. Few
C. Innumerable
D. Hundreds
Answer : C

8. The concept of period refers to:
A. A specific duration of time
B. A varying duration of time
C. A duration of time which permits necessary adjustments
D. A period with calculated intervals
Answer : B

9. The cobweb model will convergent when the slope of:
A. Demand curve is more than supply curve
B. Supply curve is more than demand curve
C. Supply curve is equal to demand curve
D. None of the above
Answer : A

10. Other things remaining the same, when a consumers income increases his equilibrium point moves to:
A. A lower indifference curve
B. A lower PPC curve
C. Remains on same indifference curve
D. A higher indifference curve
Answer : D

11. The greater the percentage of income spent on a commodity:
A. The greater its elasticity is likely to be
B. The weaker its elasticity is likely to be
C. The unchanged its elasticity is likely to be
D. None of the above
Answer : A

12. In monopolistic competition, because of difference in choices, the firm charges:
A. Different prices
B. Similar prices
C. High prices
D. Low prices
Answer : A

13. The slope of isocost line (budget line) shows:
A. Capital labor ratio
B. Labor wage ratio
C. Factor price ratio
D. Factor labor ratio
Answer : C

14. In the immediate run:
A. Supply curves are inelastic
B. Supply curves are perfectly elastic
C. Demand curves are elastic
D. Supply curves are elastic
Answer : A

15. In short run, a firm can change its:
A. Total production
B. Fixed production
C. Variable production
D. None of the above
Answer : C

16. Production indifference curve (isoquant) is a curve which shows:
A. Equal level of output
B. Unequal level of outputs
C. Equal level of inputs
D. Unequal level of inputs
Answer : A

17. With the decrease in marginal valuation of a specific commodity, the price offered by the people:
A. Decreases
B. Increases
C. Become very high
D. Remain unchanged
Answer : A

18. The indifference curve technique:
A. Helps in separating the income effect and the substitution effect
B. Does not help in separating the two effects
C. Mixed up the two effects
D. None of the above
Answer : A

19. In a perfectly competitive market, suppliers must know:
A. The incomes of consumers
B. The price of the good
C. What other commodities households could substitute for the good
D. Consumers expectations of the future
Answer : B

20. In Edgeworth model, if price falls below competitive price, the demand is:
A. More than maximum output
B. More than minimum output
C. Less than maximum output
D. Less than minimum output
Answer : A

21. Theory of revealed preference is based on:
A. Weak orderings
B. Neutral orderings
C. Partial orderings
D. Strong orderings
Answer : D

22. A decrease in demand lowers the price the most:
A. In the immediate run
B. In the short run
C. When the supply is perfectly elastic
D. When producers have sufficient time to fully adjust to the demand change
Answer : A

23. In Bertrand model, the entry of new firms is:
A. banned
B. allowed
C. partially allowed
D. none of the above
Answer : A

24. Under Bandwagon effects, people use those goods which are used by their:
A. Friends
B. Relatives
C. Family
D. All of them
Answer : D

25. The Cambridge School of Thought refers to the group of English economists who came under the influence of:
A. Alfred Marshal
B. J.M.Keynes
C. Paul A.Samuelson
D. A.C.Pigou
Answer : A

26. The law of demand is most directly a result of:
A. The law of comparative advantage
B. The law of diminishing returns
C. The principle of substitution
D. Economics of large scale production
Answer : C

27. For monopolistic competitive firm:
A. P=AR and P>MR
B. PC. P=MC and MC=AC
D. None of the above
Answer : A

28. The demand curve of a firm in monopolistic competition is:
A. Negatively sloped
B. Vertical
C. Horizontal
D. Positively sloped
Answer : A

29. If, at the prevailing price, more of a good is desired than is available for sale:
A. The price is below equilibrium
B. The price is at equilibrium
C. The price must fall
D. We cannot tell anything about the price
Answer : A

30. The arc elasticity is the measure of average elasticity at the mid-point of the chord and connects:
A. Two points on demand curve
B. Two points on supply curve
C. Many points on demand curve
D. Many points on demand curve
Answer : A

31. In modern theory of costs, a firm normally utilizes:
A. 2/3 of capacity of its plants
B. 3/4 of capacity of its plants
C. 1/3 of capacity of its plants
D. 1/2 of capacity of its plants
Answer : A

32. Which cost increases continuously with the increase in production?
A. Average cost
B. Marginal cost
C. Fixed cost
D. Variable cost
Answer : D

33. Dumping is international discriminating:
A. Monopoly
B. Oligopoly
C. Duopoly
D. None of the above
Answer : A

34. Robbins definition of economics was criticised by:
A. Alfred Marshal
B. Adam Smith
C. J.B.Clark
D. Hicks, Longe and Durbin
Answer : D

35. If X and Y are close substitutes, a rise in the price of X will lead to:
A. Increase in demand for Y
B. Decrease in demand for Y
C. Decrease in demand for both X and Y
D. No change in demand for Y
Answer : A

36. The general markets results from the imposition of price ceilings has been:
A. Higher prices
B. Increased prices
C. Increased consumption
D. Shortage of products
Answer : D

37. Discriminating monopoly implies that the monopolist charges different prices for his commodity:
A. From different groups of consumers
B. For different uses
C. At different places
D. Any of the above
Answer : D

38. Who wrote Economics of Imperfect Competition?
A. E.H.Chamberlin
B. Joan Robinson
C. E.A.G.Robinson
D. J.M.Keynes
Answer : B

39. Total costs are:
A. TFC TVC
B. TFC/TVC
C. TVC/TFC
D. TFC +TVC
Answer : D

40. If two goods are perfect substitutes then IC will be:
A. Concave to the origin
B. Convex to the origin
C. Positively sloped
D. Negatively sloped
Answer : D

41. In sweezy model (kinked demand curve model), the overall increase in costs of production:
A. Do not effect equilibrium
B. Affect equilibrium
C. Both a and b
D. None of the above
Answer : B

42. Identify the economist who first developed the theory of income determination in its modern form:
A. Paul A.Samuelson
B. J.M.Keynes
C. Joan Robinson
D. Dr.mehboob ul Haq
Answer : B

43. Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
A. In ordinal approach we can separate the income effect from the substitution effect of a price change
B. In ordinal approach we can study the consumer behavior more closely
C. In ordinal approach the consumer is assumed more rational
D. In ordinal approach the consumer has more income
Answer : A

44. If the price of product A decreases and in the result the demand for product B increases then we can say that:
A. A and B are substitute goods
B. A and B are complementary goods
C. A is an inferior good
D. B is an inferior good
Answer : B

45. A demand curve which is horizontal and parallel to x-axis represents:
A. Infinitely elastic demand
B. Infinitely inelastic demand
C. Relatively elastic demand
D. Relatively inelastic demand
Answer : A