Tag: simple monopoly and commodity market

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Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

_________ affects the demand for money.

  1. Real income

  2. Price level

  3. Rate of interest

  4. All the three
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The following variables affects the demand for money: 

1. Real income: It refers to the income which is used for consumption of commodities in the market. If it is high, then the demand for money will also be high and if it is low then the demand for money will also be low. 
2. Price level: If the general price level in the economy for all the commodities are high as in the case of inflation, then demand for money will be more as now more money will be required to purchase the same set of commodities and if the general price level in the economy for all the commodities are low as in the case of deflation, then demand for money will be less  as now less money will be required to purchase the same set of commodities.
3. Rate of interest: Rate of interest is the rate charged on the loans offered by the commercial banks to the people with or without any collateral. If rate of interest is high then it will decrease the real income with the people as a result of which purchasing power would be decreased which will decrease the demand for money in the economy and if rate of interest is low then it will increase the real income with the people as a result of which purchasing power would be increased which will increase the demand for money in the economy.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

NABARD is the Apex Bank for _________ credit in India.

  1. Real Estate

  2. Small Scale Industries

  3. Agriculture

  4. None of the above.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

NABARD (National Bank for Agriculture and Rural Development) is the apex regulatory body for the overall regulation of regional rural banks and apex cooperative banks in India, primarily focusing on agriculture credit.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Which of the following is NOT the feature of monopoly form of market?

  1. Not elastic in nature

  2. Legal barriers

  3. Size of the market is too small

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A monopoly is characterized by a single seller and high barriers to entry. 'Not elastic in nature' is not a standard feature, as the demand curve for a monopolist can be elastic or inelastic depending on the price point.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

In a free market economy, the optimal quality of goods and service is determined by ____________.

  1. customers

  2. workers

  3. firms

  4. government
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Customer is one who purchase goods and services from the seller. Customer satisfaction is the main aim of the seller to earn goodwill in the market. Free market economy is one where there are no government or less government interventions. Hence, in a free market economy, the optimal quality of goods and service is determined by customers.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

When elasticity of demand is equal to one, MR will be equal to _______.

  1. one

  2. zero

  3. infinity

  4. negative
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When the price elasticity of demand is 1 (unitary elastic), the total revenue is maximized, which means the marginal revenue (the change in revenue from selling one more unit) is zero.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Marginal Revenue will be negative if the demand is _________.

  1. relatively elastic

  2. unitary elastic

  3. relatively inelastic

  4. perfectly elastic
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Marginal revenue is negative when the demand is relatively inelastic (elasticity < 1), because to sell more units, the price must be lowered so significantly that total revenue decreases.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Marginal revenue will be positive if elasticity of demand is _________.

  1. less than one

  2. more than one

  3. equal to one

  4. equal to zero
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Marginal revenue is positive when demand is relatively elastic (elasticity > 1), as lowering the price leads to a proportionately larger increase in quantity sold, increasing total revenue.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

If a demand curve exhibits unit elasticity for all prices the MR curve ___________.

  1. is identical with it

  2. lies below the demand curve

  3. is parallel to the x-axis

  4. is identical with the y-axis
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If the demand curve has unit elasticity at all points (a rectangular hyperbola), the total revenue is constant. Therefore, the marginal revenue is zero, meaning the MR curve lies on the x-axis (parallel to the x-axis).

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Imperfect monopoly is a single firm industry where ___________________.

  1. The cross elasticity in the market is zero

  2. The cross elasticity of demand between the product of the firm and that of other commodities in the market is small, though it is above zero

  3. The price elasticity to the market is zero

  4. The income elasticity to the market is zero
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In economic theory, imperfect competition is a type of market structure showing some but not all features of competitive markets. Forms of imperfect competition include: Monopolistic competition: A situation in which many firms with slightly different products compete. The cross elasticity of demand between the product of the firm and that of other commodities in the market is small, though it is above zero