Economic Systems and Market Structures CDS Questions

CDS Economy

Economic Systems and Market Structures MCQ Questions


13.

Match the following:

List I List II
a) Oligopoly 1.) Interdependence among firms
b) Monopoly 2.) Price takers
c) Perfect competition 3.) Single seller
A.

a-1, b-2, c-3

B.

a-3, b-1, c-2

C.

a-2, b-3, c-1

D.

a-1, b-3, c-2

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ANSWER :

D. a-1, b-3, c-2

14.
Which of the following is true for a traditional economy?
A.
High level of innovation
B.
Decisions based on customs
C.
Rapid economic growth
D.
Minimal government involvement
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ANSWER :
B. Decisions based on customs
15.
In monopolistic competition, what allows firms to set prices above marginal cost?
A.
Homogeneous products
B.
Barriers to entry
C.
Product differentiation
D.
Government intervention
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ANSWER :
C. Product differentiation
16.
What is the main feature of a centrally planned economy?
A.
Free market competition
B.
Centralized decision-making by the government
C.
Decentralized pricing mechanism
D.
Private ownership of resources
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ANSWER :
B. Centralized decision-making by the government
17.
Which market structure best describes the automobile industry?
A.
Monopoly
B.
Oligopoly
C.
Perfect competition
D.
Traditional economy
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ANSWER :
B. Oligopoly
18.
What is the result of firms in an oligopoly colluding?
A.
Increased competition
B.
Price stability and higher profits
C.
Greater consumer choice
D.
Entry of new firms
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ANSWER :
B. Price stability and higher profits