A firm under perfect competition is a price taker because: MCQ with Answer and Explanation

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A firm under perfect competition is a price taker because:

A. there are high barriers to entry

B. it differentiates its product

C. it controls the entire market

D. there are many buyers and sellers and the product is homogeneous

Answer: Option D

Solution (By JKSSB Mock Tests)

In perfect competition, many sellers produce a homogeneous product, so no single firm can influence price.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a feature of the Classical Quantity Theory of Money?

A. Money is neutral and affects only prices in the long run

B. Interest rates determine money demand primarily

C. Velocity of money is unstable

D. Output is demand-determined

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Correct Answer: Option A

Explanation:
In the classical framework, money is neutral in the long run; changes in money supply affect only the price level, not real variables.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'circular flow of income' in a two-sector economy includes:

A. government and foreign sector

B. only households

C. only firms

D. households and firms

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Correct Answer: Option D

Explanation:
A two-sector economy includes households and firms.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'aggregate supply curve' in the short run is typically:

A. vertical

B. upward sloping

C. downward sloping

D. horizontal

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Correct Answer: Option B

Explanation:
The short-run aggregate supply curve is upward sloping due to sticky wages and prices.

This question belongs to: Economy GK Economy Set 1

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