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Group A Economics Chapter Micro Economics MCQs:

The Central Superior Services (denoted as CSS; or Bureaucracy) is an elite permanent bureaucratic authority, and the civil service that is responsible for running the civilian bureaucratic operations and government secretariats and directorates of the Cabinet of Pakistan.

Central Superior Services (CSS) -> Group A -> Economics -> Micro Economics


Spending on motoring as a % of household expenditure in the UK shows that motoring is ?

A: a potential public good
B: Environmentally damaging
C: an inferior good
D: a superior good
Answer: D


Evidence suggests that the price elasticity of demand for motoring is ?

A: Elastic
B: absolutely inelastic
C: Unitarily elastic
D: inelastic
Answer: C


Which city has the following transport policy ?

A: Athens
B: Car licenses are very expensive vehicle entry to the city center is very restricted road pricing is being introduced and modern cheap rail transport is being expanded.
C: London
D: Singapore E. New York
Answer: A


Supporters of antimonopoly enforcement argue that the real gain from such enforcement ?

A: Is that this policy serves to deter firms from engaging in such practices as collusion, price-fixing and deceptive advertising
B: is that if encourages firms to engage in research which leads to new products
C: is the revenue generated from the fines paid by those individuals who are found guilty of antitrust violation?
D: is that it forces firms to produce efficiently.
Answer: A


A horizontal merger is a merger of?

A: firms at various stages in a production process.
B: firms producing unrelated products
C: firms producing complementary products
D: firms producing the same product
Answer: D


A merger between a paper producer and a book publisher is an example of?

A: a complementary products merger.
B: a conglomerate merger.
C: a horizontal merger
D: a vertical merger
Answer: D


A merger in which firms at various stages in a production process combine is a ?

A: conglomerate merger.
B: production merger
C: vertical merger
D: horizontal merger
Answer: C


A firm charging different buyers’ different prices for the same product is practicing ?

A: price discounting.
B: Competitive pricing.
C: Price discrimination
D: price fixing.
Answer: C


Privatization is the transfer of ?

A: government businesses to the private sector
B: corporately owned businesses to individuals
C: publicly held stock to private individuals.
D: privately owned businesses to the government sector
Answer: A


De-regulation is where the government ?

A: removes barriers to entry and minimum product quality standards
B: removes barriers to entry
C: imposes higher standards of conduct
D: breaks up private sector monopolies.
Answer: A
M Ramzan


In the country X it is now becoming possible to buy electricity from a gas company and gas from an electricity company. This is called ?

A: natural monopoly.
B: deregulation
C: making markets contestable
D: cross-subsidization.
Answer: C


Economists use the term regulatory capture to mean a situation where the private sector firms being regulated ?

A: Bribe the regulator.
B: Persuade the regulator to operate in the industry’s interests
C: Persuade the regulator to act in the firms interests.
D: Persuade the government to change the regulatory regime.
Answer: B


Between 1990 and 1999 car ownership per thousand of the population fell in ?

B: Spain
C: Belgium
Answer: A


The external benefits of using cars are ____ and the external costs are _____?

A: low; high
B: low; low
C: high; high
D: high; low
Answer: A


Antimonopoly laws are based on the proposition that ?

A: public ownership is the best way to achieve efficiency
B: increasing market power is the best way to achieve efficiency.
C: competition is the best way to achieve efficiency.
D: regulation is the best way to achieve efficiency.
Answer: C


A conglomerate merger is a merger of ?

A: firm producing complementary products
B: firms producing the same product
C: firms at various stages in production process.
D: firms producing unrelated products.
Answer: D


Sales staff are keen to sell extended warranties because ?

A: they are paid commission on each extended warranty they sell.
B: extended warranties offer value for money.
C: the cost of repair will usually exceed the cost of the warranty
D: They are concerned about customer satisfaction.
Answer: A


In the UK, electricity industry parts are a ____ and other parts are ___ ?

A: cartel; a sellers’ market
B: nationalized; privatized
C: natural monopoly; potentially competitive
D: monopolistic competition duopoly
Answer: C
M tayyab


Antimonopoly legislation is undertaken to ____ competition and market regulation is undertaken to ____ competition ?

A: promote; promote
B: restrict; promote
C: restrict; restrict
D: promote; restrict
Answer: D


The theory of the second best suggests that in the absence of perfect competition a privatized industry should charge a price of ?

A: p = MC
B: p = Z
C: P = MC + Z
D: P = MC – Z
Answer: C