CBSE Questions for Class 11 Commerce Economics The Theory Of The Firm Under Perfect Competition Quiz 3 - MCQExams.com

The perfectly elastic supply curve has _______ slope.
  • horizontal
  • vertical
  • flatter
  • steeper
Profit that a firm earns over and above the normal profit is called the ________.
  • profit
  • super-normal profit
  • explicit profit
  • none of these
In the long run, supply is _________.
  • elastic
  • inelastic
  • zero
  • infinity
The point on the supply curve at which a firm earns normal profit is called the ___________.
  • equilibrium point
  • break-even point
  • optimum point
  • Both A and B
In the short run the supply is ________.
  • relatively less elastic
  • more elastic
  • inelastic
  • perfectly elastic
Which of these does not affect elasticity of supply?
  • Size of population
  • Disposal income of consumer
  • Consumers taste and preference
  • All of the above
Elasticity of supply depends upon ________.
  • nature of the commodity
  • production technology
  • future outlook of prices
  • all of the above
Elasticity of supply is defined as ________.
  • % change in supply/% change in price
  • %change in price/% change in supply
  • change in supply/change in price
  • change in supply/% change in price
In real life neither perfect competition nor monopoly situations are found. 
  • True
  • False
____________ is sum total of fixed and variable cost.
  • Total cost
  • Average revenue
  • Marginal revenue
  • Average cost
A monopolist has no control over the price of the commodity. 
  • True
  • False
When price falls there is _____________ of supply.
  • contraction
  • expansion
  • increase
  • decrease
Supply refers to the quantity which a firm is __________.
  • willing to produce at a given price
  • willing to supply at a given price
  • willing to store at a given price
  • willing to order at a given price
Elasticity of supply measures ______.
  • variability of change in supply
  • reliability of supply
  • rate at which quantity offered for sale change with change in price
  • all of the above
A perfectly inelastic supply curve will be _________.
  • parallel to Y axis or a vertical line
  • parallel to X axis
  • U shaped
  • downward sloping
If the time horizon is longer, the elasticity of supply will be _______.
  • unity
  • less than unity
  • more elastic
  • less than 0
Very short period is the market condition where the supply remains perfectly ___________.
  • elastic
  • inelastic
  • unity elastic
  • elasticity less than 1
A supply curve passing through the origin will have elasticity _______.
  • less than 1
  • more than 1
  • just one
  • zero
A 6% increase in price has caused 8% decrease quantity supplied, the price elasticity of supply will be _________.
  • 1.33
  • -1.33
  • 0.66
  • -0.66
In the long run the supply curve is ________.
  • inelastic
  • unity
  • more elastic
  • perfectly elastic
If a dealer is prepared to supply 1000 sets of a 29" Colour TV if the price is Rs. 12,000 per set, however if at Rs. 15,000, the dealer is prepared to supply on 1250 sets of TV the elasticity of supply is ________.
  • 1
  • 2
  • 0.75
  • 1.4
Which of these will have highly inelastic supply curve ___________.
  • perishable goods
  • consumer durable goods
  • items of elite class consumption
  • all of the above
If a dealer is prepared to supply 1000 sets of a 29" Colour TV if the price is Rs. 12,000 per set, however if at price Rs. 15,000 the dealer is prepared to supply only 1100 TV sets, the elasticity of supply is _________.
  • 1
  • 2
  • 0.4
  • 1.5
A 8% increase in price has caused 6% increase in quantity supplied, the price elasticity of supply will be __________.
  • 1.33
  • -1.33
  • 0.75
  • -0.66
A firm that break even after all the economic costs are paid is earning _________.
  • economic profit
  • costing profit
  • normal profit
  • super normal profit
Short run supply curve of firm in perfect competitive market is _________.
  • portion of the marginal cost curve that lies above the average variable cost curve.
  • portion of the marginal cost curve that lies below the average variable cost curve
  • same as demand curve
  • marginal cost curve itself
If the firm is operating at a level above break even level, it will __________.
  • earn net profit on the quantity in excess of break even level quantity at the rate of contribution margin
  • earn net profit on the total quantity sold at the rate of contribution margin
  • incur loss on the quantity in short of break even level quantity at the contribution margin
  • incur loss on the quantity in excess of break even level quantity at the contribution margin
When the price is less than the average variable cost, the firm should _________.
  • continue to operate till the market recover
  • shut down its operation for the time being
  • retrench workers and pay them compensation
  • clear the existing stock at a price less than the prevailing price to beat the competitors
In a perfect competitive market, price determines _________.
  • what to buy
  • what to produce
  • both (A) and (B)
  • none of the above
Break even point refers to the situation when ________.
  • total revenue is equal to total cost
  • total revenue is more than total cost
  • total revenue is less than total cost
  • total revenue is equal to total variable cost
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