GROUP B

1.The market type which is known as perfect competition is

__________.

A. Highly
Highly competitive
competitive and companies
and companies find it challenging
find it challenging to
to earn economic
earn economic profits profits
in the in
long
therun
long run

B. Almost free from competition and companies earn large

profits

C. Marked by firms continuously trying to upgrade their

products so that buyers prefer their products to that of their
competitors’

D. Dominated by fierce advertising campaigns

2. Which of the following factors is not a characteristic of perfect
competition?

Highly competitive
A. large number and companies
of buyers and find it challenging to earn economic
sellers
profits in the long run

B.Well-informed buyers and sellers about product prices

C.Individual firms spend a considerable amount on advertising

D.No restrictions on entry into or exit from the industry

3. Under perfect competition, a business has to make different types
of decisions, both for the short run and the long run. Which of the
following is a short run decision?

A.Whether to enter
Highly competitive andorcompanies
exit an industry
find it challenging to earn economic
profits in the long run

B.The price to charge buyers for a product

C. Spending on advertising and sales promotion

D. The levels of output that can maximise profits

4. Which of the following is true about a price-taking firm?

A. It iscompetitive
Highly in contact and
withcompanies
rival firmsfind
to fix the best price
it challenging thateconomic
to earn all
of them can charge profits in the long run

B. It is unable to influence the price of the product that it sells

C.It is asking the government to set a fixed price for its product

D. It can set the price of a product at any level that it wants

5. If many sellers are selling an identical product, what is the
implication of this scenario?

A. Significant
Highly losses
competitive and for all the sellers
companies find it challenging to earn economic
profits in the long run

B. The market supply curve is horizontal

C. Chaos in the market

D. The sellers do not have the power to change the price of a

product
6. The market type known as perfect competition is

Highly competitive
A.almost free fromand companies and
competition find itfirms
challenging to earn
earn large economic
profits
profits in the long run

B. highly competitive and firms find it impossible to earn an

economic profit in the long run.

C. dominated by fierce advertising campaigns

D. marked by firms continuously trying to change their products

so that consumers prefer their product to their competitors'
products.
7. Which of the following is the best example of a perfectly
competitive market?

A. diamonds
Highly competitive and companies find it challenging to earn economic
profits in the long run

B. athletic shoes

C. soft drinks

D. farming
8. In monopolistic competition, the products of different sellers are
assumed to be

A. similar
Highly but slightly
competitive different find it challenging to earn economic
and companies
profits in the long run

B. identical perfect substitutes

C. either identical or differentiated

D. unique without any close or perfect substitutes

9. All of the following are examples of product differentiation in
monopolistic competition EXCEPT

A. newcompetitive
Highly and improved packagingfind it challenging to earn economic
and companies
profits in the long run

B. lower price

C. acceptance of more credit cards than the competition

D. location of the retail store

10. What is the difference between perfect competition and
monopolistic competition?

A. Perfect
Highly competition
competitive has a large
and companies findnumber of small
it challenging firms
to earn economic
while monopolistic competition does
profits in the longnot.
run

B. In perfect competition, firms produce identical goods,while

in monopolistic competition, firms produce slightly different
goods
C. Perfect competition has no barriers to entry, while
monopolistic competition does.

D. Perfect competition has barriers to entry while

monopolistic competition does not.
11. If a monopolistically competitive seller can convince buyers
that its product is of better quality and value than
products sold by rival firms

Highly
A. competitive
demand and companies find it challenging to earn economic
increases.
profits in the long run

B. the firm gains more control over its price

C. demand becomes more inelastic

D. all of the above occur

12. As the degree of product differentiation increases among the
products sold in a monopolistically competitive
industry, which of the following occurs?

Highly
A. Thecompetitive and companies
cost of production falls find it challenging to earn economic
profits in the long run

B. The amount of marketing expenditures decreases for each

firm

C. The demand curve for each seller's product becomes more

horizontal.

D. Each seller's demand becomes more inelastic

13. In monopolistic competition, each firm supplies a small part of
the market. This occurs because

Highly competitive
A. there and companies
are barriers to entry find it challenging to earn economic
profits in the long run

B. firms produce differentiated products

C. there are no barriers to entry

D. there are a large number of firms

14. What is a stagflation?

A. A situation
Highly in which
competitive the economy
and companies find itexperiences
challenging torecession.
earn economic
profits in the long run

B. A situation in which the economy have inflation and

recession altogether

C. An economy where unemployment is high

D. Both b and c
15. Which of the following is NOT directly associated with
stagflation?

A. High
Highly inflation and companies find it challenging to earn economic
competitive
profits in the long run

B.High unemployment

C. Demand shocks

D. Supply shocks
16. What is thought to be the cause of stagflation?

Highly
A. competitive
Demand shocks andcause
companies finddecrease
a rapid it challenging to earn economic
in prices.
profits in the long run

B. Supply shocks cause a rapid increase in prices.

C. Having expansionary fiscal and monetary policy at the same

time

D. Having contractionary fiscal and monetary policy at the

same time
17. Why is combating stagflation especially difficult?

Highly
A. competitive
. It requires andfiscal
both companies find it challenging
and monetary to earniseconomic
policy, which
difficult to coordinate. profits in the long run

B. Consumers tend to save during stagflation, making fiscal

policy ineffective.

C. Monetary and fiscal policy can’t address supply shocks.

D. Policies that lower inflation tend to raise unemployment

and vice versa.
18. Which of the following statements is MOST accurate?
Stagflation is:

A. a phenomenon
Highly peculiar
competitive and to the
companies U.S.,
find first observed
it challenging to earnduring
economic
the 1960s. profits in the long run

B. a worldwide phenomenon, first noted by the classical

economists.

C.an accepted part of American and European economics

since the turn of the century.

D. a condition common to numerous industrialized nations

since the early 1970s.
19. What is the one reason why stagflation appeared in the united
states economy during the 1970s

A. the competitive
Highly supply of oil increased
and in find
companies US it challenging to earn economic
profits in the long run

B. 1973 OPEC embargo on oil

C. a decrease in oil prices

D. all of the above

20. Which of the following statements is/are correct regarding the
impact of hike in crude oil price on India? 1. The increase in oil
prices could disturb its current account deficit. 2. The value of
Indian oil and gas companies will be positively impacted. 3.
Remittances from the Persian Gulf could decrease.

A. 1 and 3 only B. 2 and 3 only

C. 1 and 2 only D. 1, 2 and 3

21. Which of the following is/are the impact of increased
US Federal Reserve interest rates on the Indian economy?

A. Bond
Highly yields will
competitive rise.
and companies find it challenging to earn economic
profits in the long run

B. Expensive imports of crude oil.

C. Loss in export of IT and IT-enabled services

D. Both A and B
22. Which of the following is/are the consequences of
depreciation of Rupee?
1. Increase in imported inflation.
2. Difficulty in maintaining low interest rates.
3. Products and services of India will become costlier
to buy.

A. 1 and 2 only B. 2 and 3 only

C. 1 and 3 only D. 1, 2 and 3

23. Which city is host to the annual World Economic Forum?

A. Geneva.
Highly competitive and companies find it challenging to earn economic
profits in the long run

B. Davos

C. New York

D. Paris
24. With reference to Cryptocurrencies, consider the
following statements:
1. Fast and Cheap Transactions
2. Investment Destination
3. Anti-Inflationary Currency

A. 1 and 3 only B. 2 only

C. 2 and 3 only D. 1, 2 and 3

25. Consider the following statements regarding the USA’s
Currency Manipulators Watch List: 1. A country included in the list
is in suspicion of artificially increasing the value of its currency to
gain an unfair advantage over others. 2. For the consecutive two
years, India has stayed out of the watch list. Which of the
statements given above is/are not correct?

A. 1 only B. only C

C. Both 1 and 2 D. Neither 1 nor 2