2956 + Mcqs in Economics Page 35 McqOptions

1701.	Which one of the following functions of commercial banks include collection of cheques,drafts, bill of exchange etc. of their customers from other banks?
A.	Agency Function
B.	Creation of Credit
C.	Payment of Loans and Advances
D.	General Utility Function
Answer» B. Creation of Credit

Discussion

1702.	________ is one among the quantitative methods of credit control.
A.	Bank Rate Policy
B.	Moral Suasion
C.	Direct Action
D.	Rationing of Credit
Answer» B. Moral Suasion

Discussion

1703.	Factors of production may be of _______ types.
A.	4
B.	3
C.	2
D.	5
Answer» B. 3

Discussion

1704.	________ competition exists when the basic features of Perfect Competition are not present.
A.	Pure
B.	Perfect
C.	Imperfect
D.	All of the above
Answer» D. All of the above

Discussion

1705.	Cartel is one form of
A.	Monopoly
B.	Duopoly
C.	collusive oligopoly
D.	non-collusive oligopoly
Answer» D. non-collusive oligopoly

Discussion

1706.	OPEC is an example of
A.	Perfect competition
B.	Monopolistic competition
C.	Monopoly
D.	Cartel
Answer» E.

Discussion

1707.	Total input is maximum when _____________
A.	MP = 0
B.	MP is increasing
C.	MP is decreasing
D.	MP is constant
Answer» B. MP is increasing

Discussion

1708.	On the basis of time element, markets can be classified into __________ types.
A.	2
B.	3
C.	4
D.	5
Answer» C. 4

Discussion

1709.	__________ cost is also known as Alternative Cost.
A.	Opportunity
B.	Actual
C.	Real
D.	Money
Answer» B. Actual

Discussion

1710.	In India, Central Bank was established in _________
A.	1945
B.	1955
C.	1935
D.	1965
Answer» D. 1965

Discussion

1711.	_______ means absence of competition.
A.	Monopoly
B.	Perfect
C.	Imperfect
D.	Oligopoly
Answer» B. Perfect

Discussion

1712.	Pricing for selling the same commodity at different selling prices is known as ______
A.	Skimming Pricing
B.	Differential Pricing
C.	Penetration Pricing
D.	Cost – Plus Pricing
Answer» C. Penetration Pricing

Discussion

1713.	__________ account can be opened by business persons only.
A.	Current Deposit
B.	Savings Deposit
C.	Fixed Deposit
D.	Recurring Deposit
Answer» B. Savings Deposit

Discussion

1714.	Which of these would lead to fall in demand for money?
A.	Inflation
B.	Increase in Real Income
C.	Increase in Real Rate of Interest
D.	None of the above
Answer» D. None of the above

Discussion

1715.	The ‘Law of Variable Proportion’ was first developed by
A.	Prof. Mill
B.	Prof. Marshall
C.	Prof. Ricardo
D.	Prof. Smith
Answer» C. Prof. Ricardo

Discussion

1716.	The rate at which the commercial banks borrow from the Reserve Bank of India is called as
A.	REPO
B.	PLR
C.	BPLR
D.	Bank rate
Answer» E.

Discussion

1717.	Suppose that the incumbent and the entrant in the long-distance phone call market compete in prices (rates). Then, _.
A.	under the ECPR, only entrants with unit cost μE> μI will enter the long- distance phone-call industry.
B.	under the ECPR, only entrants with unit cost μE < μI will enter the long-distance phone-call industry.
C.	under the ECPR, only entrants with unit cost μE ≤ μI will enter the long-distance phone-call industry.
D.	under the ECPR,only entrants with unit cost μE = μI will enter the long- distance phone-call industry.
Answer» D. under the ECPR,only entrants with unit cost μE = μI will enter the long- distance phone-call industry.

Discussion

1718.	A common resource is
A.	nonrival and nonexclud
B.	nonrival and excludabl
C.	rival and nonexcludable.
D.	regulated and exclu
Answer» D. regulated and exclu

Discussion

1719.	Public goods are provided by government because
A.	governments are more efficient than private firms at producing public goods.
B.	people value national defence very highly.
C.	private firms will make an economic profit.
D.	free-rider problems result in underproduction by private markets.
Answer» E.

Discussion

1720.	The duration of each technology, Δ,
A.	decreases with the population size of each generation, η, and decreases with the technology-growth parameter, λ.
B.	increases with the population size of each generation, η, and the technology-growth parameter, λ.
C.	increases with the population size of each generation, η, and decreases with the technology-growth parameter, λ.
D.	decreases with the population size of each generation, η, and increases with the technology- growth parameter, λ.
Answer» D. decreases with the population size of each generation, η, and increases with the technology- growth parameter, λ.

Discussion

1721.	The price charged by a monopoly hardware firm .
A.	increases with consumers’ love for software variety parameter, α; consumers’ income, ω; and the number of consumers buying this machine, η
B.	decrease with consumers’ love for software variety parameter, α; consumers’ income, ω; and the number of consumers buying this machine, η
C.	increases with consumers’ love for software variety parameter, α; consumers’ income,ω; and decrease in the number of consumers buying this machine, η
D.	increases with consumers’ love for software variety parameter, α; decrease in consumers’ income, ω; and the number of consumers buying this machine, η
Answer» B. decrease with consumers’ love for software variety parameter, α; consumers’ income, ω; and the number of consumers buying this machine, η

Discussion

1722.	Section 170 of Copyright Act states: “the fair use of copyrighted work ... for purposes such as criticism, comment, newsreporting, teaching (including multiple copies for classroom use), scholarship, or research, is an infringement of copyright.”
A.	TRUE
B.	FALSE
Answer» C.

Discussion

1723.	The second theorem of _ states that any Pareto optimum can be supported as a competitive equilibrium for some initial set of endowments.
A.	Public Choice
B.	Social Interest
C.	Welfare Economics
D.	Keynesian Economi
Answer» D. Keynesian Economi

Discussion

1724.	An externality is defined as
A.	an additional cost imposed by the government on producers.
B.	a cost or benefit caused by a producer that is not financially incurred or received by that producer.
C.	an additional gain received by consumers from decisions made by the government.
D.	the additional amount consumers have to pay to consume an additional amount of a good or service.
Answer» C. an additional gain received by consumers from decisions made by the government.

Discussion

1725.	Equilibrium duopoly hardware prices and profits are higher when the machines are compatible than when they are incompatible.
A.	TRUE
B.	FALSE
Answer» B. FALSE

Discussion

1726.	An increase in consumers’ preference for variety of software .
A.	increases both hardware prices and profits.
B.	decreases both hardware prices and profits.
C.	increase hardware prices and decrease profits.
D.	decrease hardware prices and increase profits.
Answer» C. increase hardware prices and decrease profits.

Discussion

1727.	Selling to libraries yields a higher profit to the publisher than selling directly to readers when:
A.	books are not costly to produce.
B.	there are more libraries relative to the number of readers.
C.	readers do not place a high value on owning the book.
D.	None of the above
Answer» D. None of the above

Discussion

1728.	The duration of each technology, Δ, with the population size of each generation, η, and with the technology-growth parameter, λ.
A.	increases, decreases
B.	increases, increases
C.	decreases, increases
D.	decreases, decreas
Answer» B. increases, increases

Discussion

1729.	When users’ preferences exhibit network externalities,
A.	computer producers charge higher prices and earn higher profits when they make their machines compatible;
B.	consumers are worse off when firms sell compatible machines.
C.	consumers are well off when firms sell compatible machines
D.	Both A & B
Answer» E.

Discussion

1730.	_ occurs when a new technology replaces an old technology, but the old technology yields a higher utility (or profit) to both users than the new technology.
A.	Excess momentum
B.	Excess inertia
C.	Excess immobility
D.	Excess retreat
Answer» B. Excess inertia

Discussion

1731.	Entry into the telecommunication industry the utility of the already connected consumers whereas the utility of newly connected consumers _.
A.	increases, also increase
B.	decreases, increases
C.	increases, remains u
D.	decreases, remains
Answer» D. decreases, remains

Discussion

1732.	Economies of scale result from
A.	large fixed costs and/or weakly increasing variable costs
B.	low fixed costs and/or strongly decreasing variable costs
C.	large fixed costs and decreasing variable costs
D.	low fixed costs and weakly increasing variable costs
Answer» B. low fixed costs and/or strongly decreasing variable costs

Discussion

1733.	Network scales faster as it _
A.	lowers its customer acquistion cost.
B.	higher its customer ac
C.	cost of acquisition remains constant.
Answer» B. higher its customer ac

Discussion

1734.	The profit level of a bank declines when it makes its ATMs available for the customers of a competing bank.
A.	TRUE
B.	FALSE
Answer» B. FALSE

Discussion

1735.	A natural monopoly is
A.	nonrival and excludable
B.	rival and nonexcludable.
C.	nonrival and nonexcl
D.	regulated and exclu
Answer» B. rival and nonexcludable.

Discussion

1736.	_ network effects arise when there are "at least two different customer groups that are interdependent, and the utility of at least one group grows as the other group(s) grow".
A.	Direct
B.	Indirect (or cross-grou
C.	Two-sided
D.	Local
Answer» C. Two-sided

Discussion

1737.	Network effects also known as _
A.	Network goods
B.	Network Management
C.	Network Externalities
D.	Network Diagnosis
Answer» D. Network Diagnosis

Discussion

1738.	Information is reproduced if each agent (the provider and each consumer) makes one copy for the benefit of another consumer.
A.	Horizontally
B.	Vertically
C.	Mixed
D.	None of the above
Answer» C. Mixed

Discussion

1739.	When there are two software industries, each producing brand-specific software, an increase in the degree of compatibility of the A- machine with the software written for the B- machine,
A.	will reduce the variety of software specifically written for the A machine
B.	will increase the variety of software specifically written for the A machine
C.	will reduce the variety of software specifically written for the B machine
D.	none of the above.
Answer» B. will increase the variety of software specifically written for the A machine

Discussion

1740.	Support-oriented consumers would prefer buying software over pirating software .
A.	if p > σq; i.e., if the price of the software package exceeds the value of service providedby the software firm to its legal users.
B.	if software is not copy protected.
C.	if service provided by software firm is not available.
D.	if p ≤ σq; i.e., if the price of the software package does not exceed the value of service provided by the software firm to its legal users.
Answer» E.

Discussion

1741.	When consumers are not identical, a market failure may occur when
A.	a monopoly producer provides compatibility.
B.	a monopoly producer does not provide compatibility and compatibility is not socially preferred.
C.	a monopoly provides compatibility and compatibility is socially preferred.
D.	a monopoly producer does not provide compatibility but compatibility is socially preferred to incompatibility.
Answer» E.

Discussion

1742.	Cable television and air-traffic control are similar to each other because both of them are
A.	nonexcludable.
B.	nonrival.
C.	excludable.
D.	rival.
Answer» C. excludable.

Discussion

1743.	In _ the government fails to extract all the rents associated with giving away the frequency band to the private sector.
A.	lottery system
B.	auction
C.	first-come-first-serve
D.	administrative proc
Answer» C. first-come-first-serve

Discussion

1744.	Production of software exhibits sharp _.
A.	economies of scope
B.	economic welfare
C.	economic sustainabil
D.	economies of scale
Answer» E.

Discussion

1745.	Suppose that all technologies have the same duration. Then the frequency of technology revolutions (or new-technology adoption), denoted by f is
A.	f ≝ 1/Δ(g+λ).
B.	f ≝ Δ/ λ
C.	f ≝ λ/Δ.
D.	f ≝ 1/Δ.
Answer» E.

Discussion

1746.	When users’ preferences exhibit network externalities, and if computer brands are differentiated and incompatible, then _
A.	prices and profit levels decline with an increase in consumers’ preference toward the network size.
B.	prices and profit levels increases with an increase in consumers' preference towards the network size.
C.	price increases and profit level decreases with an increase in consumers' preference toward the network size.
D.	price declines while profit level increase with an increase in consumers' preference towards the network size.
Answer» B. prices and profit levels increases with an increase in consumers' preference towards the network size.

Discussion

1747.	Under either vertical or horizontal information reproduction, total surplus enjoyed by the η consumers is _.
A.	higher when information is printed compared with digital information.
B.	higher when information is digital compared with printed information.
C.	the same when information is digital or printed.
D.	None of the above
Answer» C. the same when information is digital or printed.

Discussion

1748.	Which one of the following goods is nonexcludable?
A.	the Sunshine
B.	a Cab
C.	an art gallary
D.	a toll bridge
Answer» B. a Cab

Discussion

1749.	In order to ensure that foreclosures will not take place, regulators should allow all service providers to sell the entire variety of telecommunication, broadcasting, and Internet services.
A.	TRUE
B.	FALSE
Answer» B. FALSE

Discussion

1750.	Supply-side economies of scale arise:
A.	when a buyer's willingness to pay for a product increases.
B.	when the demand for a firm's product keeps fluctuating.
C.	when the number of buyers for a firm's product decreases.
D.	when a firm manufactures products in high volumes.
Answer» E.

Discussion

Explore topic-wise MCQs in UPSC IAS Exam.

Which one of the following functions of commercial banks include collection of cheques,drafts, bill of exchange etc. of their customers from other banks?

________ is one among the quantitative methods of credit control.

Factors of production may be of _______ types.

________ competition exists when the basic features of Perfect Competition are not present.

Cartel is one form of

OPEC is an example of

Total input is maximum when _____________

On the basis of time element, markets can be classified into __________ types.

__________ cost is also known as Alternative Cost.

In India, Central Bank was established in _________

_______ means absence of competition.

Pricing for selling the same commodity at different selling prices is known as ______

__________ account can be opened by business persons only.

Which of these would lead to fall in demand for money?

The ‘Law of Variable Proportion’ was first developed by

The rate at which the commercial banks borrow from the Reserve Bank of India is called as

Suppose that the incumbent and the entrant in the long-distance phone call market compete in prices (rates). Then, _.

A common resource is

Public goods are provided by government because

The duration of each technology, Δ,

The price charged by a monopoly hardware firm .

Section 170 of Copyright Act states: “the fair use of copyrighted work ... for purposes such as criticism, comment, newsreporting, teaching (including multiple copies for classroom use), scholarship, or research, is an infringement of copyright.”

The second theorem of _ states that any Pareto optimum can be supported as a competitive equilibrium for some initial set of endowments.

An externality is defined as

Equilibrium duopoly hardware prices and profits are higher when the machines are compatible than when they are incompatible.

An increase in consumers’ preference for variety of software .

Selling to libraries yields a higher profit to the publisher than selling directly to readers when:

The duration of each technology, Δ, with the population size of each generation, η, and with the technology-growth parameter, λ.

When users’ preferences exhibit network externalities,

_ occurs when a new technology replaces an old technology, but the old technology yields a higher utility (or profit) to both users than the new technology.

Entry into the telecommunication industry the utility of the already connected consumers whereas the utility of newly connected consumers _.

Economies of scale result from

Network scales faster as it _

The profit level of a bank declines when it makes its ATMs available for the customers of a competing bank.

A natural monopoly is

_ network effects arise when there are "at least two different customer groups that are interdependent, and the utility of at least one group grows as the other group(s) grow".

Network effects also known as _

Information is reproduced if each agent (the provider and each consumer) makes one copy for the benefit of another consumer.

When there are two software industries, each producing brand-specific software, an increase in the degree of compatibility of the A- machine with the software written for the B- machine,

Support-oriented consumers would prefer buying software over pirating software .

When consumers are not identical, a market failure may occur when

Cable television and air-traffic control are similar to each other because both of them are

In _ the government fails to extract all the rents associated with giving away the frequency band to the private sector.

Production of software exhibits sharp _.

Suppose that all technologies have the same duration. Then the frequency of technology revolutions (or new-technology adoption), denoted by f is

When users’ preferences exhibit network externalities, and if computer brands are differentiated and incompatible, then _

Under either vertical or horizontal information reproduction, total surplus enjoyed by the η consumers is _.

Which one of the following goods is nonexcludable?

In order to ensure that foreclosures will not take place, regulators should allow all service providers to sell the entire variety of telecommunication, broadcasting, and Internet services.

Supply-side economies of scale arise: