Classical

Managerial Economics - Managerial Economics Objective Type Questions

11:  

In a free market economy, the optimal quality of goods and services is determined by

A.

customers

B.

workers

C.

firms

D.

government

 
 

Option: D

Explanation :


12:  

Monopoly exploitation is reduced by regulation that

A.

restricts output.

B.

enhances product-market competition.

C.

increases the bargaining power of workers.

D.

increases the bargaining power of employers.

 
 

Option: B

Explanation :


13:  

The imposition of a per unit tax causes the monopolist's

A.

Average cost and marginal cost curves to shift up, because the per unit tax is like a fixed cost

B.

Average cost curve to shift up

C.

Average cost and marginal curves to shift up because the per unit tax is like a variable cost.

D.

All of the above

 
 

Option: C

Explanation :


14:  

Adam Smith spoke about the famous diamond water paradox to show that

A.

Utility could be the cause of value

B.

Utility is related to demand

C.

Utility is related to supply

D.

Utility could not be the cause of value

 
 

Option: D

Explanation :


15:  

Price taker firms

A.

Do not advertise, because most advertising is wasteful

B.

Advertise to increase the demand for their product

C.

Do not advertise because they can sell as much as they want at the current price

D.

Who advertise will get more profits than those who do not

 
 

Option: C

Explanation :




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