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Q1:

3 June Shift 2

Micro > Forms of Market

Medium

Arrange the given statements in chronological order stating the implications of free entry and exit assumptions in a equilibrium market. (A) Supply curve shifts rightward, however demand remains unchanged. (B) At the prevailing market price, each firm is earning a supernormal profit and will attract some new firms. (C) Market prices fall, and supernormal profits are eventually wiped out. (D) All firms in the market are earning normal profit, no more firms will have incentive to enter. Choose the correct answer from the options given below:

(B), (A), (C), (D)

(A), (B), (C), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation →

Q2:

3 June Shift 2

Micro > Forms of Market

Medium

A perfectly competitive market in an economy is categorized by the following features. (A) Firms are price-takers. (B) Average revenue is equal to market price. (C) Market is perfectly inelastic. (D) Marginal revenue is equal to market price. Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation →

Q3:

3 June Shift 1

Micro > Forms of Market

Medium

Identify the incorrect statement regarding price flooring:

It causes excess demand, which often leads to the problem of black marketing.

Price floor is the minimum price of a commodity in the market as fixed by the government.

Often, the government fixes this price higher than the equilibrium market price of a commodity.

It ensures stability of income to the producers.

Correct Answer

Option 1

Correct Answer

Explanation →

Q4:

3 June Shift 1

Micro > Forms of Market

Medium

In the context of perfect competition, which one of the following is not correct?

Firm has full control over price.

Horizontal straight line demand curve of the firm.

Freedom of entry and exit.

Selling costs do not exist.

Correct Answer

Option 1

Correct Answer

Explanation →

Q5:

3 June Shift 1

Micro > Forms of Market

Medium

Which of the following is true about the relationship between Total Revenue (TR) and Marginal Revenue (MR) in a perfectly competitive market? (A) Total Revenue will increase at a constant rate. (B) Marginal Revenue is more than Average Revenue. (C) Marginal Revenue remains constant throughout. (D) Marginal Revenue is equal to Average Revenue. Choose the correct answer from the options given b-elow:

(A), (B), (C) and (D)

(A), (B) and (D) only

(A), (C) and (D) only

(B), (C) and (D) only

Correct Answer

Option 3

Correct Answer

Explanation →

Q6:

2 June Shift 1

Micro > Forms of Market

Medium

Match List-I with List-II | List-I | List-II | |---|---| | (A) Perfect Competition | (I) A typical characteristic of perfect competition. | | (B) Perfectly elastic demand curve | (II) An individual firm is a price taker. | | (C) Degree of price control under perfect competition | (III) The firm can sell any amount of its output at the prevailing price. | | (D) Freedom of entry and exit | (IV) No control over price. | Choose the correct answer from the options given below:

(A) - (IV), (B) - (I), (C) - (II), (D) - (III)

(A) - (IV), (B) - (II), (C) - (III), (D) - (I)

(A) - (II), (B) - (IV), (C) - (I), (D) - (III)

(A) - (II), (B) - (III), (C) - (IV), (D) - (I)

Correct Answer

Option 4

Correct Answer

Explanation →

Q7:

2 June Shift 1

Micro > Forms of Market

Medium

What is the shape of Average Revenue (AR) curve under perfect competition?

Horizontal straight line.

Vertical straight line.

Rectangular hyperbola.

Downward to the right.

Correct Answer

Option 1

Correct Answer

Explanation →

Q8:

31 May Shift 1

Micro > Forms of Market

Medium

Select the INCORRECT feature of the market with respect to perfect competition. 1. The market consists of a large number of buyers and sellers. 2. Entry into the market as well as exit from the market are free for firms. 3. Buyers are price makers. 4. There is perfect knowledge.

The market consists of a large number of buyers and sellers.

Entry into the market as well as exit from the market are free for firms.

Buyers are price makers.

There is perfect knowledge.

Correct Answer

Option 3

Correct Answer

Explanation →

Q9:

30 May Shift 1

Micro > Forms of Market

Medium

Arrange the stages of price determination in a perfect competition market: (A) Estimate the market demand and supply. (B) Firms adjust production to maximize profit. (C) Equilibrium price is established. (D) Short-run profit attracts new firms. Choose the correct answer from the options given below:

(A), (C), (B), (D)

(A), (B), (C), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation →

Q10:

30 May Shift 1

Micro > Forms of Market

Medium

Which of the following are features of a perfect competitive market? (A) Free entry and exit of firms. (B) Huge selling cost. (C) perfectly elastic demand curve. (D) perfect market knowledge among buyers. Choose the correct answer from the options given below:

(A), (B) and (D) only

(B), (C) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

Correct Answer

Option 3

Correct Answer

Explanation →

Q11:

30 May Shift 1

Micro > Forms of Market

Medium

Match List-I with List-II | List-I | List-II | |---|---| | (A) Control Price | (I) Set below the equilibrium price | | (B) Floor Price | (II) Fixed by the government for the labourers | | (C) Minimum Wage Legislation | (III) Set above the equilibrium price | | (D) Market Equilibrium | (IV) when demand and supply curve intersect. | Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation →

Q12:

29 May Shift 2

Micro > Forms of Market

Medium

Identify the incorrect option from the following related to a perfectly competitive market.

The firm's average revenue is equal to the market Price.

The price line shows the relationship between the market price and a firm's output level.

Marginal revenue equals the market price.

Firm's total revenue curve is a straight line horizontally.

Correct Answer

Option 4

Correct Answer

Explanation →

Q13:

29 May Shift 2

Micro > Forms of Market

Medium

In a perfectly competitive market choose the correct statement from the following. (A) Equilibrium occurs where market demand equals market supply. (B) Each firm employs labour upto the point where the marginal revenue of labour equals the wage rate. (C) Equilibrium price and quantity are determined when there is large number of firms. (D) Equilibrium price is always equal to minimum average cost of the firms. Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation →

Q14:

29 May Shift 2

Micro > Forms of Market

Easy

The demand curve that a firm faces in a perfectly competitive market is...........

More elastic.

Less elastic.

Perfectly inelastic.

Perfectly elastic.

Correct Answer

Option 4

Correct Answer

Explanation →

Q15:

29 May Shift 1

Micro > Forms of Market

Medium

Which of the following are features of the perfect competition market? (A) Price taking behavior of firms. (B) Restriction on entry and exit of firms. (C) Large number of sellers and buyers. (D) Asymmetric Information. Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A) and (C) only

(B) and (C) only

Correct Answer

Option 3

Correct Answer

Explanation →

Q16:

29 May Shift 1

Micro > Forms of Market

Medium

Match List-I with List-II | List-I | List-II | |---|---| | (A) Perfect Competition | (I) No change in equilibrium price | | (B) Increase in Demand= Decrease in Supply | (II) Price taking Behavior | | (C) Increase in Demand > Decrease in Supply | (III) Decrease in equilibrium price | | (D) Increase in Supply > Decrease in Demand | (IV) Increase in equilibrium price | Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (IV), (D) - (III)

(A) - (I), (B) - (III), (C) - (II), (D) - (IV)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Correct Answer

Option 1

Correct Answer

Explanation →

Q17:

29 May Shift 1

Micro > Forms of Market

Medium

Arrange the following steps of Market Equilibrium under perfect competition in the correct order. (A) Excess of market demand over market supply will cause excess demand situation. (B) Quantity demanded will fall and quantity supplied will rise. (C) The market will move towards the point where the quantity that the firm wants to sell is equal to the quantity that the consumer wants to buy. (D) The market price would tend to increase, due to competition among buyers. Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(A), (D), (B), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation →

Q18:

28 May Shift 2

Micro > Forms of Market

Easy

The existence of a large number of buyers and sellers in the perfectly competitive market means?

Only sellers can influence the market by their size.

Individual buyer or seller can influence the market by their size.

Each individual buyer and seller is very large compared to the size of the market.

Each individual buyer and seller is very small compared to the size of the market.

Correct Answer

Option 4

Correct Answer

Explanation →

Q19:

28 May Shift 2

Micro > Forms of Market

Easy

When Government fix the minimum price of any commodity this move of government is known by:

Price Ceiling.

Price Discrimination.

Floor Price.

Price Rigidity.

Correct Answer

Option 3

Correct Answer

Explanation →

Q20:

28 May Shift 1

Micro > Forms of Market

Medium

Arrange the following money supply measures in chronological order. (A) Excess supply will prevail in the economy. (B) The tendency of prices to change to restore equilibrium. (C) Suppose market supply is greater than market demand at a given price. (D) Hence, the market is not in equilibrium. Choose the correct answer from the options given below:

(C), (A), (D), (B)

(B), (A), (C), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 1

Correct Answer

Explanation →

Q21:

28 May Shift 1

Micro > Forms of Market

Medium

Match List-I with List-II | List-I | List-II | |---|---| | (A) Upper limit on price of goods & services | (I) Leads to excess supply. | | (B) Free entry and exit | (II) Equilibrium price = min AC of the firms. | | (C) Marginal revenue product of labor (MRP_L) | (III) Leads to excess demand. | | (D) Lower limit on price of goods & services | (IV) MR x MP_L. | Choose the correct answer from the options given below: 1. (A) - (I), (B) - (II), (C) - (III), (D) - (IV) 2. (A) - (III), (B) - (II), (C) - (IV), (D) - (I) 3. (A) - (IV), (B) - (III), (C) - (II), (D) - (I) 4. (A) - (IV), (B) - (III), (C) - (I), (D) - (II)

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (II), (C) - (IV), (D) - (I)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation →

Q22:

28 May Shift 1

Micro > Forms of Market

Medium

What would be the equilibrium number of firms in a market of identical firms, when market demand function $(Q_d)$, supply function of a single firm $(Q_s1)$ and equilibrium price (P) are given as $Q_d = 180 - 2P$ $Q_{s1} = 15 + P$ $P = 15$ 1. 5 2. 6 3. 8 4. 9

5

6

8

9

Correct Answer

Option 1

Correct Answer

Explanation →

Q23:

27 May Shift 2

Micro > Forms of Market

Easy

For a price-taking firm, the market price is equal to marginal revenue and ......

Total Cost.

Marginal Cost.

Total Revenue.

Average Revenue.

Correct Answer

Option 4

Correct Answer

Explanation →

Q24:

27 May Shift 2

Micro > Forms of Market

Easy

In a perfectly competitive market, a firm produces and sells a certain amount of goods. Among the following what reflect the firm's profit?

Total Cost - Variable Cost.

Total Revenue - Total Cost.

Variable Cost - Marginal Cost.

Total Revenue - Average Revenue.

Correct Answer

Option 2

Correct Answer

Explanation →

Q25:

27 May Shift 2

Micro > Forms of Market

Easy

Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are:

Rivalrous and excludable.

Rivalrous and non-excludable.

Non-rivalrous and non-excludable.

Non-rivalrous and excludable.

Correct Answer

Option 3

Correct Answer

Explanation →

Q26:

27 May Shift 2

Micro > Forms of Market

Easy

In a perfectly competitive market, the marginal revenue curve is?

Downward sloping.

Horizontal.

Vertical.

Upward Sloping.

Correct Answer

Option 2

Correct Answer

Explanation →

Q27:

26 May Shift 2

Micro > Forms of Market

Medium

In a particular country, there was a severe heatwave. Arrange the following in the sequence of order in context of the market of ice-creams. (A) Rise in the price of ice cream. (B) Supply will remain the same. (C) Competition among the buyers of ice cream inceaseees. (D) The demand for ice cream increases. Choose the correct answer from the options given below:

(A), (B), (C), (D)

(D), (B), (C), (A)

(B), (A), (D), (C)

(C), (B), (A), (D)

Correct Answer

Option 2

Correct Answer

Explanation →

Q28:

26 May Shift 2

Micro > Forms of Market

Medium

The total revenue of a firm is increasing at a constant rate. Which of the following is true about this firm?

It is operating in an imperfect market and can sell any quantity of the good at given price.

It is operating in a perfect market and can sell any quantity of the good at given price.

It is operating in an imperfect market and can sell more only by lowering the price.

It is operating in a perfect market and can sell more only by lowering the price.

Correct Answer

Option 2

Correct Answer

Explanation →

Q29:

22 May Shift 2

Micro > Forms of Market

Easy

The government-imposed lower limit on the price that may be charged for a particular good or service. What this lower limit is called ?

Price ceiling.

Price floor.

Price line.

Minimum price.

Correct Answer

Option 2

Correct Answer

Explanation →

Q30:

22 May Shift 1

Micro > Forms of Market

Medium

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

Perfect information.

Free entry and exit.

Price taking behaviour.

Large number of buyers and sellers.

Correct Answer

Option 3

Correct Answer

Explanation →

Q31:

22 May Shift 1

Micro > Forms of Market

Medium

Arrange a statement of market equilibrium when the demand curve shifts leftward: (A). The shift indicates that at any price the quantity demanded is less than before. (B). Some firms will reduce the price of their commodity so that they can sell their desired quantity. (C). Excess supply will arise. (D). At the new equilibrium, quantity and price will be less than before. Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation →

Q32:

22 May Shift 1

Micro > Forms of Market

Medium

Let us consider the example of a market consisting of identical farms producing the same quality of wheat. Suppose the market demand curve and the market supply curve for wheat are given by: qᵈ = 200 - p and qˢ = 120 + p. What is the equilibrium price?

Rs. 40 per kg

Rs. 30 per kg

Rs. 50 per kg

Rs. 20 per kg

Correct Answer

Option 1

Correct Answer

Explanation →

Q33:

21 May Shift 1

Micro > Forms of Market

Easy

In perfectly competitive market, the demand curve of a firm is?

Perfectly inelastic.

Unit elastic.

More than unit elastric.

Perfectly elastic.

Correct Answer

Option 4

Correct Answer

Explanation →

Q34:

16 May Shift 1

Micro > Forms of Market

Medium

Which of the following is NOT a condition for profit maximization of a perfectly competitive firm in the short run?

The price 'p' must equal MC

Average revenue must be rising.

Price must be greater than the average variable cost (p > AVC)

Marginal cost must be non-decreasing at the profit maximizing level of output.

Correct Answer

Option 2

Correct Answer

Explanation →

Q35:

16 May Shift 1

Micro > Forms of Market

Medium

Identify the correct sequence due to which firms under perfect competition earn normal profits in the long run. (A) The firms are earning less than normal profit at the prevailing price. (B) The profits of each firm will increase to the level of normal profit. (C) No more firm will want to leave, since they will be earning normal profit here. (D) Some firms will exit, which will lead to an increase in price. Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (D), (C), (B)

(A), (D), (B), (C)

(C), (B), (D), (A)

Correct Answer

Option 3

Correct Answer

Explanation →

Q36:

16 May Shift 1

Micro > Forms of Market

Medium

Suppose the Income of consumers in a market increase. How will this effect the equilibrium price of the commodity, assuming that it is a normal good? (A) There is excess demand at the existing price. (B) Rising price leads to contraction in demand and expansion in supply and a new equilibrium price is attained, which is higher than the initial price. (C) The demand curve shifts rightward. (D) There is upward pressure on the price and price starts rising. Choose the correct answer from the options given below:

(A), (B), (C), (D)

(C), (A), (B), (D)

(C), (A), (D), (B)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation →

Q37:

16 May Shift 1

Micro > Forms of Market

Medium

Match List-I with List-II | List-I | List-II | |---|---| | (A) Excess demand | (I) Supernormal profits | | (B) Excess supply | (II) Perfect competition | | (C) Entry of new firms in the market | (III) Price tends to fall | | (D) Price taker | (IV) Price tends to rise | Choose the correct answer from the options given below:

(A) - (IV), (B) - (III), (C) - (I), (D) - (II)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

(A) - (IV), (B) - (III), (C) - (II), (D) - (I)

(A) - (III), (B) - (IV), (C) - (II), (D) - (I)

Correct Answer

Option 1

Correct Answer

Explanation →

Q38:

16 May Shift 1

Micro > Forms of Market

Easy

Which of the following is not a feature of perfect competition?

The market consists of a large number of buyers and sellers

The product of one firm can be differentiated from the product of other firms.

Entry into the market as well as exit from the market are free for firms.

perfect information

Correct Answer

Option 2

Correct Answer

Explanation →

Q39:

14 May Shift 1

Micro > Forms of Market

Easy

In the perfectly competitive market, if 10 packets of bread are sold at the price of Rs. 25 per packet, what will be the total revenue of a bread manufacturer? 1. Rs. 25 2. Rs. 250 3. Rs. 0.4 4. Rs. 2.5

Rs. 25

Rs. 250

Rs. 0.4

Rs. 2.5

Correct Answer

Option 2

Correct Answer

Explanation →

Q40:

14 May Shift 1

Micro > Forms of Market

Medium

Under perfect competition if firms earn supernormal profits. Arrange following statements to arrive at the implication of free entry and exit of firms (A) Market price fall in such a manner that firms will be earning normal profits only and thus no more firms will have incentive to enter the market. (B) Some new firms will enter the market (C) At the prevailing market price, each firm is earning supernormal profit. (D) Demand remains unchanged but the market supply curve shifts rightward

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 4

Correct Answer

Explanation →

Q41:

14 May Shift 1

Micro > Forms of Market

Medium

Arrange the following statements related to negative externalities in correct sequence (A) There is an oil refinery which refines crude petroleum and sells it in the market (B) Pollution harms well-being and also kills fish or other organisms (C) Production the refinery may also be polluting the nearby river (D) Such harmful effects that the refinery is inflicting on others, for which it will not bear any cost, are called externalities

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(C), (B), (D), (A)

Correct Answer

Option 2

Correct Answer

Explanation →

Q42:

13 May Shift 2

Micro > Forms of Market

Medium

What are the key components of a perfectly competitive market? (A) Large number of buyers and sellers. (B) Homogeneous product. (C) Free Entry and exit. (D) Asymmetric Information. Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation →

Q43:

13 May Shift 2

Micro > Forms of Market

Easy

Price ceiling is one concept which provides safeguard to______

Producer.

Intermediateries.

Consumer.

Government.

Correct Answer

Option 3

Correct Answer

Explanation →

Q44:

13 May Shift 1

Micro > Forms of Market

Easy

Which of the following is an example of floor price?

Minimum Support Price for Foodgrain

Price printed on any article.

Price taken by Seller

Price asked by buyer to buy.

Correct Answer

Option 1

Correct Answer

Explanation →

Q45:

13 May Shift 1

Micro > Forms of Market

Medium

With the shifting demand curve leftward, arrange the following statement in sequential order. (A) At any given price, demand is less. (B) Excess supply will be there. (C) Some producers will decrease the prices of commodity. (D) At new equilibrium, quantity and price will be less. Choose the correct answer from the options given below:

(B), (A), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(D), (B), (C), (A)

Correct Answer

Option 1

Correct Answer

Explanation →