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Economics Mcqs 4423 MCQs [All-Courses]

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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.

All Topics  4423

In pure monopoly, what is the relation between the price and the marginal revenue ?
A the price is greater than the marginal revenue
B the price is less than the marginal revenue
C there is no relation
D they are equal
Correct Answer: the price is greater than the marginal revenue
If a marginal revenue exceeds marginal cost, a monopolists should?
A increase should
B decrease output
C keep output the same because profits are maximized when marginal revenue exceeds marginal cost
D raise the price
Correct Answer: increase should
If regulators break up a natural monopoly into many smaller firms, the cost of production ?
A will rise
B will fall
C will remain the same
D could either rise or fall depending on the elasticity of the monopolist’s supply curve
Correct Answer: will rise
Public ownership of natural monopolies ?
A tends to be inefficient.
B usually lowers the cost of production dramatically.
C creates synergies between the newly acquired firm and other government-owned companies.
D does none of the things described in these answers
Correct Answer: tends to be inefficient.
Using government regulations to force a natural monopoly to charge a price equal to his marginal cost will ?
A Cause the monopolist to exit the market
B improve efficieny
C raise the price of good
D attract additional firms to enter the market
Correct Answer: Cause the monopolist to exit the market
Compared to a perfectly competitive market a monopoly market will usually generate ?
A higher prices and lower output
B higher prices and higher output
C lower prices and lower output
D lower prices and higher output
Correct Answer: higher prices and lower output
A monopolist maximizes profit by producing the quantity at which ?
A marginal revenue equals marginal cost
B marginal revenue equals price
C marginal cost equals price
D marginal cost equals demand
Correct Answer: marginal revenue equals marginal cost
A firm whose average total cost continually declines at least to the quantity that could supply the entire market is known as a ?
A natural monopoly
B perfect competitor
C government monopoly
D regulated monopoly
Correct Answer: natural monopoly
In the UK the government ?
A Bans monopolies
B Fines all monopolies
C Prevents firms acquiring more than 25% of the market
D Has the right to investigate monopolies and will assess each one on its own merits
Correct Answer: Has the right to investigate monopolies and will assess each one on its own merits
According to Schumpeter ?
A Monopolies are inefficient
B Monopoly profits ac as an incentive for innovation
C Monopolies are alocatively efficient
D Monopolies are productively efficient
Correct Answer: Monopoly profits ac as an incentive for innovation
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