Q. In oligopoly:
✅ Correct Answer: (D)
firms may collude or compete depending on their assumptions about their competitors
MicroEconomics, Theory and Applications 1 MCQs and Notes
Q. In the Kinked Demand Curve theory:
✅ Correct Answer: (D)
non price competition is likely
Q. In Game Theory:
✅ Correct Answer: (D)
firms consider the actions of others before deciding what to do
Q. The Kinked Demand Curve theory assumes:
✅ Correct Answer: (C)
firms are competitive with each other
Q. In a cartel, member firms may be given a fixed amount to produce. This amount is called
✅ Correct Answer: (C)
quota
Q. As If a few large firms dominate an industry the market is known as:
✅ Correct Answer: (D)
oligopoly
Q. Which is an explanation for why the demand curve is down sloping?
✅ Correct Answer: (C)
the law of diminishing marginal utility
Q. A consumer is in equilibrium and is spending income in such a way that the marginal utility of product X is 40 units and Y is 16 units. The unit price of X is Rs.5. The price of Y is:
✅ Correct Answer: (B)
rs.2 per unit.
Q. If you know that the marginal utility per rupees spent on product Alpha is less than the marginal utility per rupees spent on product Beta, consumers who spend all their income on these two products can:
✅ Correct Answer: (C)
increase total utility by buying more of beta and less of alpha.
Q. If a rational consumer is in equilibrium, then:
✅ Correct Answer: (C)
the marginal utility per last dollar spent is the same for all goods consumed.