MCQ Question:(Please mark the right answer)

1.If the price of good X rises and the demand for good X is elastic, then the percentage

__________ in quantity demanded is __________ the percentage rise in price, and total revenue

__________.

a.fall; greater than; rises

b.fall; less than; falls

c.fall; equal to; remains constant

d.rise; greater than; falls

e.fall; greater than; falls

2.Cross elasticity of demand is the percentage change in the quantity __________ of a good divided by the percentage change in __________.

a.demanded; the price of the good

b.supplied; the price of the good

c.demanded; the price of another good

d.supplied; the price of another good

e.demanded; income

3.Price falls from $1.20 to $1.00, and the quantity demanded rises from 90 units to 120 units. What is the coefficient of price elasticity of demand between the two prices?

a.1.57

b.0.75

c.0.64

d.1.00

e.1.93

4.If the total utilities corresponding to the first five units of a good consumed are 10, 15, 19, 22, and 24, respectively, what is the marginal utility of the fourth unit?

a.22

b.5

c.4.5

d.4

e.3

5.Refer to the table below, the total variable cost of producing 3 units is

a.$31.00.

b.$51.00.

c.$17.00.

d.$10.00.

e.There is not enough information to answer this question.

Output Total Cost

0 $20

1 $30

2 $41

3 $51

4 $65

5 $75

6 $84

7 $105

6.The marginal cost curve cuts the __________ curve at its lowest point.

a.average variable cost

b.average total cost

c.average fixed cost

d.a and b

e.a, b, and c

7.Perfectly competitive industries are

a.difficult to enter because there are already so many producers in the industry.

b.not particularly appealing or attractive to enter because there tend to be so many buyers that it is difficult to deal with them.

c.relatively easy to enter but not so easy to exit from.

d.a and b

e.none of the above

8.In the short-run, if P < AC, a perfectly competitive firm should

a.increase production to the output level at which P = AC.

b.continue producing at a loss.

c.shut down.

d.continue producing at a profit.

e.There is not enough information to answer the question.

9.For a perfectly competitive firm,

a.the marginal revenue curve and the demand curve are the same.

b.the marginal revenue curve and the marginal cost curve are the same.

c.the supply curve and the marginal revenue curve are the same.

d.the demand curve and the marginal cost curve are the same.

e.none of the above

10.Which of the following is not an assumption of the theory of monopolistic competition?

a.There are high barriers to entry.

b.There are many sellers and few buyers.

c.Each firm in the industry produces and sells a homogeneous product.

d.a and b

e.all of the above

11.A monopoly firm maximizes profits by producing at the point where

a.total revenue is at a maximum.

b.marginal revenue equals average cost.

c.marginal revenue equals marginal cost.

d.price equals marginal revenue.

e.b and d

12.Which of the following is an assumption of the theory of oligopoly?

a.There are barriers to entry.

b.There are many sellers and many buyers.

c.Firms produce and sell either homogeneous or differentiated products.

d.a and c

e.none of the above

13.One of the ways in which monopolistic competitors differ from perfect competitors is that

a.perfect competitors produce the quantity of output at which marginal revenue equals marginal cost and monopolistic competitors do not.

b.perfect competitors produce a homogeneous product and monopolistic competitors do not.

c.there is easy entry and exit for a perfect competitor, but not for a monopolistic competitor.

d.a and c

e.b and c

14.The relationship between a monopolistic competitor's marginal revenue curve and its demand curve is that the

a.two curves coincide and are horizontal at the market price.

b.marginal revenue curve lies above the demand curve and the demand curve is horizontal at the market price.

c.marginal revenue curve lies below the demand curve and both are downward sloping.

d.two curves coincide and are downward sloping to the right.

e.marginal revenue curve lies above the demand curve and both are downward sloping.

I have confusion in those answers,Please clear the answer as a MCQ answer.