MCQs - Producer Equilibrium Commerce Notes | EduRev

Crash Course of Micro Economics -Class 12

Commerce : MCQs - Producer Equilibrium Commerce Notes | EduRev

The document MCQs - Producer Equilibrium Commerce Notes | EduRev is a part of the Commerce Course Crash Course of Micro Economics -Class 12.
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Q.1 Normal profit is treated as a part of implicit cost because

(a) It is imputed cost of entrepreneurial services by the owner

(b) It is fixed cost

(c) It is variable cost
(d) It is social cost
Ans:  A

Q.2 
At a particular level of output, a producer finds that MC < MR.  What will a producer do to maximize his profits?
(a) Producer will increase the production
(b) Producer will reduce his production
(c)No change as already getting maximum profit
(d) None of the above
Ans: A

Q.3 
The structure of the cold drink industry in India is best described as 

(a) Perfectly competitive
(b) Monopolistic
(c) Monopolistically competitive
(d) Oligopolistic
Ans: D

Q.4 
______ refers to a situation when a firm has no intention to expand or contract the output.
(a) Producer’s Equilibrium
(b) Market Equilibrium
(c) Consumer’s Equilibrium
(d) None 
Ans: A

Q.5 
Producer is not at equilibrium when MC > MR because:
(a) Profits can be increased by producing more

(b) Benefit is less than cost

(c) Both (a) and (b)
(d) None of these
Ans: B

Q.6 
Producer’s equilibrium refers to stage of that output level when:

(a) Firm earns maximum profits (b) Firm bears minimum losses

(c) Firm has no inclination to expand or contract the output
(d) All of these
Ans: D

Q.7 
In case of perfect competition, a firm is in equilibrium when:

(a) MC = MR
(b) MC cuts MR from below
(c) MC is rising when it cuts MR
(d) All of these
Ans: D

Q.8 
Normal profits occur when :

(a) AR > AC
(b) AR = AC
(c) AR < AC
(d) TR > TC
Ans: B

Q.9 
Under perfect competition, for the producer to be in equilibrium :

(a) AR = MR = AC and AC must be rising
(b) AR = MR = MC and MC must be falling
(c) AR = MR = MC and MC must be rising
(d) AR = MR = TC and TC must be rising
Ans: C

Q.10 
Normal profit is a part of:
(a) total revenue
(b) total cost
(c) marginal revenue
(d) average revenue
Ans: B

Q.11 
What does break-even point indicate ?
(a) TR > TC
(b) TR < TC
(c) TR = TC
(d) TC = 0
Ans: C

Q.12 
In the context of producer’s equilibrium which one is wrong ?

(a) Minimum difference between TR and TC
(b) MR = MC
(c) Producer gets maximum profit
(d) No tendency to change his production
Ans: A

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