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Economics Mcqs 4423 MCQs [All-Courses]

Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

Which of the following is not put forth as a criticism of advertising and brand names ?

A Advertising manipulates people’s tastes to create a desire that otherwise would not exist

B Advertising increase competition Which causes unnecessary bankruptcies and layoffs.

C Advertising increases brand loyalty causes demand to be more inelastic and thus, increase mark-up over marginal cost.

Review Detailed Answer

Correct Answer: Advertising increase competition Which causes unnecessary bankruptcies and layoffs.

Which of the following firms is most likely to spend a large percentage of their revenue on advertising ?

A the producer of a highly differentiated consumer product

B the manufacturer of an undifferentiated consumer commodity

C a perfect competitor

D The manufacturer of an industrial product

Review Detailed Answer

Correct Answer: the producer of a highly differentiated consumer product

The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ?

A there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market

B Monopolistically competitive firms face a downward-sloping demand curve just like competitive firms.

C Monopolistically competitive firms charge prices equal to the minimum of their average total cost just like competitive firms.

D The products are differentiated in a monopolistically competitive market just like in a competitive market.

Review Detailed Answer

Correct Answer: there are many sellers in a monopolistically competitive market and there is free entry and exit in the market just like a competitive market

One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?

A Since price is above marginal cost surplus is redistributed from buyers to sellers

B monopolistically competitive firms earn economic profits in the long run

C monopolistically competitive firms produce beyond their efficient scale

D excess of the cost of production and this causes a deadweight loss.

Review Detailed Answer

Correct Answer: excess of the cost of production and this causes a deadweight loss.

Which of the following firms has the least incentive to advertise ?

A a manual fracture of breakfast cereal

B a wholesaler of crude oil

C a restaurant

D a manufacturer of home heating and air conditioning

Review Detailed Answer

Correct Answer: a wholesaler of crude oil

In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ?

A losses and firms exit the market

B profits and firms exit the market

C losses and firms enter the market

D profits and firms enter the market

Review Detailed Answer

Correct Answer: profits and firms enter the market

Which of the following products is least likely to be sold in a monopolistically competitive market ?

A breakfast

B cotton

C video games

D beer

Review Detailed Answer

Correct Answer: cotton

Which of the following is not an argument put forth by economists in support of the use of advertising ?

A Advertising increases competition

B Advertising provides information to customers about prices, new products and location of retail outlets.

C Advertising provides a creative outlet for artists and writers

D Advertising provides new firms with the means to attract customers from existing firms.

Review Detailed Answer

Correct Answer: Advertising provides a creative outlet for artists and writers

Defenders of the use of brand names argue that brand names ?

A all of these answers

B are useful even in socialist economics such as the former Soviet Union

C provide information about the quality of the product

Review Detailed Answer

Correct Answer: all of these answers

The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ?

A monopolistically competitive firms charge prices equal to their marginal costs just like monopolists

B a monopolistically competitive firms faces a downward-sloping demand curve for its differentiated product and so does a monopolist

C monopolistically competitive markets have free entry and exit just like a monopolistic market

D monopolistically competitive firms produce beyond their efficient scale and so do monopolists

Review Detailed Answer

Correct Answer: a monopolistically competitive firms faces a downward-sloping demand curve for its differentiated product and so does a monopolist

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

Which of the following is not put forth as a criticism of advertising and brand names ?

Which of the following firms is most likely to spend a large percentage of their revenue on advertising ?

The use of word “competition” in the name of the market structure called “monopolistic competition” refers to the fact that ?

One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?

Which of the following firms has the least incentive to advertise ?

In the short run, if the price is above average total cost in a monopolistically competitive market, the firm makes ?

Which of the following products is least likely to be sold in a monopolistically competitive market ?

Which of the following is not an argument put forth by economists in support of the use of advertising ?

Defenders of the use of brand names argue that brand names ?

The use of the word “monopoly” in the name of the market structure called “monopolistic competition” refers to the fact that ?