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JAMB questions for "Economics :: Market Structure"
Q1
One of the characteristics of monopolistic competition is that
A
there is mobility of factors of production
B
consumers have perfect knowledge of price
C
no single seller dominates the market
D
the firms are price-takers
E
Q2
A typical feature of a market economy is that
A
all producers make profit
B
full employment exists
C
consumer sovereignty exists
D
there is equality of economic agents
E
Q3
In the long run of the characteristics of monopolistic competitive firms is that they
A
make abnormal profits
B
suffer losses
C
make normal profits
D
collude with each other
E
Q4
Individual markets differ from each other according
A
the degree of competition
B
the volume of trade
C
the number of buyers
D
its composition
E
Q5

Which of the following producers is closest to being a monopolist?

A

A baker

B

A wheat farmer

C

A large chain store

D

An automobile plant

E
Q6
The diagram above shows a firm operating under conditions of monopolistic competition. The curve W represents its
A
marginal cost
B
average revenue
C
marginal revenue
D
average cost
E
Q7
Product differentiation in monopolistic competition implies that
A
different buyers pay different prices for the same product
B
the same product is available in different forms
C
sellers determine whom to sell their products to
D
different products are sold to the same buyer
E
Q8
A perfectly competitive firm is advised to close down when the
A
price is equal to the marginal revenue
B
marginal revenue is equal to the marginal cost
C
price is below the average variable cost
D
price is below the marginal cost
E
Q9
The market structure in which there is interdependence of price-output policies is
A
a monopolistic competition
B
pure monopoly
C
pure competition
D
an oligopoly
E
Q10
A constraint on the expansion of a firm is the
A
size of the market
B
rate of advertisement
C
level of producers' income
D
tastes of the consumers
E
Q11
Under perfect competition, the short-run supply curve of a firm is determined by its
A
total cost curve
B
marginal cost curve
C
average fixed cost curve
D
average cost curve
E
Q12
A major assumption in a perfectly competitive market is that
A
the number of buyers and sellers is small
B
individuals cannot influence prices
C
the quality of products remains the same
D
prices will always remain constant
E
Q13
In the long run, the equilibrium point a monopolistic firm is a point where the
A
marginal cost curve is tangential to the average fixed cost curve
B
demand curve is tangential to the average variable cost curve
C
suppl,y curve is tangential to the marginal cost curve
D
demand curve is tangential to the average cost curve
E
Q14
The distinction between perfect competition and monopolistic competition is that the latter is characterized by
A
homogeneity of product
B
product differentiation
C
a single market price
D
many buyers and sellers
E
Q15
The diagram beside represents the short-run position of a monopolist. The profit-maximizing output is
A
Q3
B
Q4
C
Q2
D
Q1
E
Q16
By advertising, a monopolistic competitive firm tries to shift its
A
supply curve to the right
B
supply curve to the left
C
demand curve to the right
D
demand curve to the left
E
Q17
A black market can occur when
A
consumption of the commodity is restricted
B
prices are set by government above the equilibrium
C
prices are set by government below the equilibrium
D
supply is in excess of demand
E
Q18
Imperfect market is characterized by
A
perfect mobility of factors of production
B
many buyers and few sellers
C
a large number of buyers and sellers
D
non-preferential treatment
E
Q19
Under conditions of perfect competition, a firm's supply curve is determined by its
A
fixed cost curve
B
variable curve cost
C
total cost curve
D
marginal cost curve
E
Q20
The short-run equilibrium output for a monopolist is determined by the
A
intersection of the marginal cost and marginal revenue curves
B
highest point on the total revenue curve
C
intersection of the average revenue and average cost curves
D
minimum point on the average cost curve
E
Q21
The economic policy of deregulation is aimed at encouraging
A
a competitive market structure
B
an oligopolistic market structure
C
a duopolistic market structure
D
a monopolistic market structure
E
Q22
An important feature of perfect competition is that
A
the movement of goods and services is restricted
B
there is adequate knowledge of existing prices
C
prices are centrally administered
D
individual economic units can influence prices
E
Q23
An imperfect market exists where
A
the product is homogeneous
B
there is perfect information among the few buyers and sellers
C
both buyers and sellers have free entry into and free exist from the market
D
the location of some sellers give them an advantage over others
E
Q24
In a free market system trading can only take when the
A
equilibrium price is attained
B
market is not working efficiently
C
price of a commodity tends to attract consumers
D
consumer sovereignty is lacking
E
Q25
The condition for equilibrium price and quantity under perfect competition is
A
MC = AR = TR
B
MC = AR = P
C
TC = AR = P
D
MC = AR = TC
E
Q26
The firm whose sales and total revenue of the commodity as given above is
A
a monopolist
B
a monopolist competitor
C
an oligopolist
D
a perfect competitor
E
Q27
At the point where marginal revenue of a monopolist is equal to zero. its revenue will be
A
falling
B
maximum
C
equal to zero
D
rising
E
Q28
The short-run equilibrium in a perfectly competitive market require that
A
marginal cost and marginal revenue be equal
B
marginal cost be equal to total revenue
C
costs are mutually determined by buyers and sellers
D
the marginal cost curve cuts the total cost
E
Q29
In perfect competitive market, every firm is a price
A
marker
B
taker
C
giver
D
bidder
E
Q30
A characteristics of an imperfect market is the
A
large number of buyers and sellers in the market
B
awareness of market conditions by buyers
C
availability of substitutes
D
heterogeneity of products
E
Q31
The producer in a perfectly competitive market is faced with a demand curve whose elasticity is
A
unitary
B
greater than one
C
infinite
D
less than one
E
Q32
A market where there are many differentiated products is called
A
monopoly
B
perfect competition
C
monopolistic competition
D
oligopoly
E
Q33
One of the features of a free market economy is that
A
resources are directed by the price mechanism
B
workers do not earn wages
C
the profit motive is severely constrained
D
decisions on the economy are taken by bureaucratic structures
E
Q34
In a free market economy, available resources are more efficiently allocated by complete reliance on
A
development planning
B
strategic planning
C
capital budgeting
D
price system
E
Q35

In the diagram below, the revenue of the monopolist is given by the area

A

OQ1MP4

B

P4MTP1

C

OQ1TP1

D

OQ2SP2

E
Q36
The basic idea behind brand differentiation under an imperfect market arrangement is to
A
stimulate demand for rival products
B
create demand for the particular product
C
enable the product to penetrate the market
D
enable the product to compete with others
E
Q37
In the long run, a firm in a perfect competitive market will make
A
normal profit
B
abnormal profit
C
marginal profit
D
no profit
E
Q38
Output restriction, fixing of price, creating obstacles to free entry into the market are features of
A
pure monopoly
B
perfect competition
C
monopolistic competition
D
monopsonist competition
E
Q39
At equilibrium, one of the distinctive features of monopoly compared with perfect competition is that in the former
A
price is always equal to marginal cost
B
supply is always equal to demand
C
price is always higher than marginal cost
D
there are always many buyers and many sellers
E
Q40
A market is in disequilibrium if
A
the quantity purchased is greater than the quantity sold
B
the quantity sold differs from the quantity purchased
C
at a lower price, a large quantity is sold
D
the quantity demanded differs from the from the quantity supplied
E
Q41
Comparison of the price and output decisions of a perfect firm with those of a monopolist shows that the
A
monopolist charges a lower price and perfect competitor
B
perfect competitor charges lower price and produces a larger output than the monopolist
C
perfect competitor produces a smaller output than the monopolist
D
monopolist charges a lower price and produces a larger output than the perfect competitor
E
Q42
In a perfectly competitive market, the firm is in long-run equilibrium at the output where
A
marginal cost is minimum
B
average cost is minimum
C
total revenue is maximum
D
marginal revenue is maximum
E
Q43
The firm portrayed is selling in
A
a purely competitive market
B
a market in which demand is elastic at all prices
C
an imperfectly competitive market
D
a market in which companies produce homogeneous commodities
E
Q44
An imperfect market in which there is only one buyer of a commodity is
A
monopsony
B
oligopoly
C
monopoly
D
duopoly
E
Q45
Given perfect competition in the capital market the opportunity cost of capital is adequately reflected by the
A
interest rate
B
returns on capital
C
alternative capital foregone
D
shadow price of foreign exchange
E
Q46
In order to increase its profit margin, the monopolist can manipulate
A
both price and output
B
either price or output
C
only its price
D
only its output
E
Q47
One of the characteristics of an imperfect marker is
A
a large number of buyers and sellers
B
a lack of homogeneity of products
C
an adequate awareness of market conditions by buyers and sellers
D
the availability of substitutes
E
Q48
If prices fall in a perfectly competitive industry the firms in that industry in the short run will
A
not decrease in number
B
keep output at the same level but make losses
C
reduce production
D
intensify the advertisement of their products
E
Q49
In the short run the monopolistic competitor
A
alway makes collusion
B
always incurs a loss
C
always break-even
D
may close down
E
Q50
Market is defined as
A
one geographical location where people meet to buy and sell
B
the demand and supply of good and services
C
a group of people whose sole interest is to make profit
D
any organizational framework which links the buyers and sellers of a good or service
E
Q51
What form of market is found in an imperfect competition where there are few buyers and many sellers?
A
Oligopoly
B
Monopoly
C
Duopoly
D
Oligopsony
E
Q52
Which of the following is an important function of prices in a market economy?
A
Ensuring that resources are used in most efficient manner
B
Ensuring an equitable distribution of goods and services
C
Ensuring that all industries are perfectly competitive in the long run
D
Equating level of purchases with level of needs
E
Q53
One major difference between monopoly and perfect competition is that
A
the perfect competitor is a price taker while the monopolist determines his own output
B
homogeneity of purpose exists for the perfect competitor while non-homogeneity of purpose exist for the monopolist
C
sellers are located all over the world in the case of perfect competition but sellers are located only in one country in the case of the monopolist
D
there is free entry and exit in perfect competition but no free exit in monopoly
E
Q54
A monopolist will practice price discrimination in two markets if
A
the cost of separating the markets is large
B
the markets have different elasticities of demand
C
there is free flow of information in the two markets
D
there is a patent of the commodity
E
Q55
If a monopoly is attempting to maximize profit which of the following should it attempt to do?
A
Select that output at which ATC is at minimum
B
Set price equal to TC
C
Maximum profit per unit
D
Maximize revenues
E
Equate marginal cost to marginal revenue
Q56
An imperfectly competitive market is one where
A
a large number of firms sell homogeneous products
B
input and output prices are unaffected
C
each firm faces a horizontal demand curve
D
each firm maximizes profit by selecting an output level at which marginal cost equals market price
E
commodities are differentiated
Q57
A perfectly competitive firm does not influence the demand for its commodities by lowering its price below the market price because
A
it is illegal price cutting
B
other competitors will be angry
C
total revenue will decline due to its inelastic demand curve
D
it is able to sell all it wants at the market price
E
it does not maximizes profit
Q58
Pricing and output decisions of sellers are highly interdependent in markets known as
A
oligopoly
B
perfect competition
C
monopoly
D
monopolistic competition
E
imperfect competion
Q59
Which of the following does NOT represent the behaviour of a monopolist?
A
Manipulating the market price of his goods
B
Manipulating both the price and quantity of goods at the same time
C
Raising the price at one market, lowering it at another market
D
Manipulating only quantity, price being a given factor
E
Manipulating the quantity of his goods
Q60
Differentiated product is the characteristic feature of
A
perfect competition
B
pure competition
C
monopolistic competition
D
monopoly
E
oligopoly