Perfect Competition MCQ for YOUR UPCOMING EXAM - UOL INTRODUCTION TO ECONOMICS

UOL INTRODUCTION TO ECONOMICS SAMPLE MCQ

1. Perfect competition is an industry with

A) a few firms selling differentiated goods

B) many firms selling goods that are different in product range.

C) a few firms selling goods that are different in quality.

D) many firms selling homogeneous  goods.

2. In a perfectly competitive industry, there are

A) many buyers and many sellers.

B) many sellers, but there might be only one or two buyers.

C) many buyers, but there might be only one or two sellers.

D) one firm that sets the price for the others to follow.

3) In perfectly competitive market, the product has

A) differentiated cost and same marginal price

B) many perfect complements produced by other firms.

C) many perfect substitutes produced by other firms.

D) different average price and marginal cost.

4) In perfect competition, restrictions on entry into an industry

A) do not exist.

B) apply to labor but not to capital.

C) apply to both capital and labor.

D) apply to capital but not to labor.

5) The price elasticity of demand for any particular perfectly competitive firm's output is

A) zero.

B) one.

C) infinite.

D) more than zero.

6) In perfect competition, the market demand

A) has a price elasticity of supply equal to one.

B) faces downward sloping curve.

C) has a price elasticity of supply equal to infinity.

D) faces horizontal curve.

7) In perfect competition, the price of the product is determined when the

A) elasticity of market demand equals to elasticity of market supply.

B) summation of marginal cost and industry demand curve intersect.

C) fixed cost is minimized.

D) average variable cost equals the industry average total cost

8) Perfectly competitive firms are

            A) Allocative inefficient

           

            B) Productive efficient

            C) Marginal cost inefficiency

            D) Economically efficient

9) In perfect competition, a firm that maximizes its economic profit will sell its good

A) below the market price.

B) above the market price.

C) below the market price if its supply curve is inelastic and above the market price if its supply curve is elastic.

D) at the market price.

10) For a perfectly competitive firm, it will make normal profit when

A) marginal revenue equals its minimum average fixed cost.

B) marginal revenue equals its minimum average cost.

C) total revenue equals its total opportunity cost.

D) marginal revenue exceeds its marginal cost.

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