MCQ Bank
What is the impact of a decrease in market supply while demand remains constant?
- A) Increase in equilibrium quantity and price
- B) Decrease in equilibrium price and increase in equilibrium quantity
- C) Decrease in equilibrium price and quantity
- D) Increase in equilibrium price and decrease in equilibrium quantity
What do food processors, fiber manufacturers, and farm input manufacturers provide to farmers in the market?
- A) Subsidies
- B) Market demand forecasts
- C) Signals to decide on production, quantity, methods, and trade
- D) Price controls
Regarding market classification, which market structure is characterized by many sellers with homogenous products?
- A) Oligopoly
- B) Monopsony
- C) Perfectly competitive market
- D) Monopoly
The marginal rate of product transformation (MRPT) signifies:
- A) The rate at which the price ofoutput changes
- B) The rate of reducing one product's production for another
- C) The speed of technological advancement
- D) The rate of change in average cost of production
In a perfectly competitive market, the condition ensuring that no single seller or buyer can influence the price is:
- A) Limited mobility of resources
- B) Differentiated products
- C) Sufficiently large number of buyers and sellers
- D) High entry and exit barriers
The difference between marginal cost and market price represents:
- A) Total cost
- B) Total profit
- C) Producer surplus
- D) Consumer surplus
What happens to price and quantity when the demand curve is flatter than the supply curve?
- A) Only price changes, quantity remains constant
- B) Price and quantity converges to market equilibrium
- C) Price remains constant while quantity changes
- D) Price and quantity diverges from market equilibrium
Which of the following is true about own price elasticity of supply?
- A) If elasticity is equal to one, supply is inelastic
- B) If elasticity is zero, supply is unit elastic
- C) If elasticity is greater than one, supply is elastic
- D) If elasticity is less than one, supply is elastic
Which of the following is the characteristic of a perfectly competitive market?
- A) Few sellers
- B) Single seller
- C) Many buyers and sellers, no one can affect the price
- D) Many sellers with differentiated products
What happens to the equilibrium price and quantity when both market supply and demand decrease by the same amount?
- A) Equilibrium price remains constant, equilibrium quantity increases
- B) Equilibrium price remains constant, equilibrium quantity decreases
- C) Equilibrium price decreases, equilibrium quantity remains constant
- D) Equilibrium price increases, equilibrium quantity remains constant
How does favorable weather affect the supply and price of a commodity in the very short run?
- A) Decreases supply, increases price
- B) Decreases supply, decreases price
- C) Increases supply, decreases price
- D) Increases supply, increases price
How does equilibrium price and quantity affected when there is a decrease in market demand while supply remains constant?
- A) Equilibrium price decreases and quantity increases
- B) Equilibrium price increases and quantity decreases
- C) Equilibrium price and quantity both decrease
- D) Equilibrium price and quantity both increase
Which market structure has many sellers but sells differentiated products?
- A) Monopoly
- B) Perfect competition
- C) Oligopoly
- D) Monopolistic competition
What happens to price and quantity when the supply curve is more elastic than the demand curve?
- A) Price remains constant while quantity change
- B) Price and quantity converges to market equilibrium
- C) Only price changes while quantity remains constant
- D) Price and quantity diverges from market equilibrium
In the profit-maximizing combination of products, the slope of the iso-revenue line is equal to:
- A) The marginal cost of production
- B) The marginal rate of product transformation
- C) The average cost of production
- D) The market price of the product
Which of the following is the primary characteristic of a market under monopolistic competition?
- A) One seller with differentiated products
- B) Homogenous products
- C) Many sellers with undifferentiated products
- D) Few sellers with differentiated products
Which of the following indicates that the supply is inelastic?
- A) A 1% change in price causes a smaller than 1% change in the quantity supplied
- B) A 1% change in price causes no change in the quantity supplied
- C) A 1% change in price causes an equal 1% change in the quantity supplied
- D) A 1% change in price causes a larger than 1% change in the quantity supplied
Which of the following is the basic characteristic of a monopoly?
- A) One seller and many buyers
- B) Few sellers and few buyers
- C) One buyer and many sellers
- D) Many sellers and many buyers
A rational farmer ceases production when price is:
- A) Less than average variable cost (AVC)
- B) Greater than average total cost (ATC)
- C) Equal to average total cost (ATC)
- D) Between average total cost (ATC) and average variable cost (AVC)
The points on the Production Possibilities Frontier (PPF) illustrates:
- A) Efficient combinations of two products
- B) Technically feasible but inefficient points
- C) None of the above options
- D) Technically infeasible production points